New Nashville zoning option may be used to ban short-term rentals in future developments
- Feb 25, 2020 | Jennifer Sokolowsky
Nashville’s Metro Council has created a new type of zoning that prohibits short-term rentals in new developments. While short-term rental advocates opposed the ordinance, city officials said the zoning could help more multifamily developments get approved in the wake of neighborhood opposition to projects that might include vacation rentals.
“What we get is a lot of pushback from neighbors who might be okay with a coffee shop and they might be okay with a deli with some apartments over it, but they simply don’t want a short-term rental hotel in their backyard,” said District 5 Council Member Sean Parker, who sponsored the bill.
The zoning would only apply to future developments, not existing ones or those already being planned.
Another new short-term rental ordinance will get a second reading March 5. The proposal, sponsored by District 17 Council Member Colby Sledge, would require short-term rental hosts that want to operate within 100 feet of churches, daycare centers, parks, and schools to go through a public hearing and a get a waiver from the Metro Council.
Sledge says the bill is a response to complaints he’s received from neighbors about disturbances at vacation rentals, including noise and public intoxication.
In 2018, Nashville Metro Council passed a short-term rental law that requires hosts to have a permit for both owner-occupied short-term rentals and rental properties whose owners do not live on-site. That law was amended in 2019 after the Tennessee General Assembly passed a bill restricting how far cities can go in placing bans on short-term vacation rentals.
The law eliminates new permits for non-owner-occupied vacation rentals in residential neighborhoods after January 1, 2022. Short-term rental properties occupied by their owners can do business in any neighborhood.
The ordinance also limits the number of guests, prohibits hosts from preparing food for guests, bans rentals of less than 24 hours, and requires owners to designate someone who lives within a 25-mile radius of the property and can be on-site in case of an emergency or complaint.
Nashville’s short-term rental rules also require hosts to collect state and city sales and lodging taxes. This means hosts must register with both state and city tax officials, file regular tax returns, and remit taxes to authorities.
Airbnb collects state taxes for Nashville short-term rental hosts, but does not collect city taxes on their behalf. HomeAway/Vrbo does not collect any taxes for Nashville operators.
Hosts are responsible for all taxes that are not collected for them. MyLodgeTax can help automate tax compliance for Tennessee hosts, including state and local registration and filing. For more on occupancy taxes in Tennessee, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.