Haslam signs compromise short-term rental bill

Legislation setting statewide rules for short-term rental of residential property has been signed into law by Gov. Bill Haslam without public comment. Similar bills have been the subject over lobbying wars for years over how much regulatory authority should remain with local government and the final version passed by the legislature was something of a compromise, worked out in a House-Senate conference committee.

From a Times Free Press report when the Short-Term Rental Unit Act (HB1020) was approved (18-4 in the Senate; 67-23 in the House):

It was heavily lobbied for several years by Airbnb, Homeaway and other online companies. Lined up against them were cities and hotels.

Sen. Bo Watson, R-Hixson, had previously forced changes to the Senate bill, including one that eliminated a vested property right for owners of property that originally would have allowed owners to sell homes to other people or companies who could keep operating the homes for short-term rental.

The bill maintains that prohibition. But it now includes a “grandfather” provision affecting towns and cities where there are no regulations at all. It says when a municipality does enact rules, owners of short-term rental property, including those who don’t actually live in the homes, can continue to rent if they can provide documentation of having paid at least six months of sales taxes on rentals during a 12-month period prior to enactment of rules.

… Nashville and Knoxville have had troubled dealings with non-owner-occupied short-term rentals, and homeowners in particular have been up in arms. Nashville officials and homeowners have complained about hordes of bachelor and bachelorette parties accompanied by noisy, drunken and sometimes-lewd bacchanals erupting in otherwise quiet residential neighborhoods.

Here’s a statement from public relations firm that has promoted the bill:

“Tennessee celebrates the implementation of vacation rental legislation that supports innovation, economic growth, and opportunity for Tennesseans,” said HomeAway’s Director of Policy Communications Philip Minardi. “The compromise legislation paves a path for responsible renting. It ensures promises that were made to legally operating owners are being kept and traveling families will continue to have access to safe and affordable vacation rental accommodations.

“We thank (sponsors) Sen. John Stevens and Rep. Cameron Sexton for their leadership and commitment to protecting property rights and ensuring vacation rentals can continue to bring jobs and new revenue to the Tennessee economy.”