New Knoxville city ordinance regulates short-term rental properties

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A new city ordinance will take effect in Knoxville to regulate short term rental properties, like Airbnb.

“We think it was a way of striking a balance,”  Knoxville Chief Policy Officer Bill Lyons said.

The ordinance comes after months of vocal support and opposition to these in-home rental options.

“It’s safe to say we didn’t make everybody happy,” Lyons said. “Some people in residential areas are not happy that there will be any Airbnbs allowed. Some of the Airbnb operators are not happy that they only have a year, if they’re not living in the property. So like many things, it’s a compromise situation that doesn’t make everybody happy but we think strikes the best balance in policy and is the fairest.”

Some neighborhood groups and home associations opposed to short-term rentals have expressed concerns about increased traffic flow, on-site parking and noise. To address these fears, the ordinance requires Airbnb owners to only rent out properties they legally live in.

“The property that I have on Airbnb will have to become my primary residence, so I will have to shift my residence from this house to this other property that I own that has been an Airbnb and as long as it’s my legal residence and qualifies as owner-occupied, I can continue to rent it out,” Mike Cohen, Knoxville Airbnb owner, said.

Those already in the short-term rental business in Knoxville will have one year, beginning Jan. 2, 2018, to decide how to transition their properties.

The ordinance also mandates Airbnb operators to obtain a permit and pay taxes and fees similar to a hotel.

“I think that for most of the air bnb owners that I know in Knoxville, this is not going to be a huge deal, and we’re glad a) to be legal. We are happy to be paying the occupancy tax, because we sell occupancy,” Cohen said. “We have been sort of under the radar without regulations, so we haven’t been collecting room tax and remitting that to the city and county, and it’s a good thing that we do that. It’s good for the economy, it’s good for government, and it’s good that we pay our fair share.”

And though the ordinance means more regulation for the in-home rental business, it also means more economic opportunity for the Knoxville community.

“We want to be part of the sharing economy in Knoxville,” Lyons said. “Airbnbs offer a great opportunity for people to have a different experience when they come. We just want to make sure it doesn’t cause any negative impacts for neighborhoods and we think this ordinance does that.”

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