Lexington moves forward with plan to crack down on Airbnb and other short-term rentals
The Lexington council will vote next month on new regulations that supporters say will help the city clamp down on rogue operators of short-term rental housing who aren’t paying hotel and business taxes.
The Lexington-Fayette Urban County Council’s Planning and Public Safety Committee voted 5-2 on Tuesday to move the new regulations to the full council. That vote will likely be March 10 during a council work session.
Under the proposed regulations, short-term rental hosts will be required to register with the city, pay a $300 annual registration fee, get an occupational license and report monthly on the number of stays. Hosts that rent exclusively through Airbnb would be exempted from the monthly reporting requirement. The city has an agreement with Airbnb to collect state taxes and Fayette County hotel taxes.
Short-term rental hosts would get a local registration number that must be advertised on all short-term rental websites. Those who advertise without a local registration number would be fined $125. Repeat violations of the ordinance could result in fines as high as $1,000. The fines can be appealed to a city code enforcement board.
The $300 registration fee will help the city monitor the program by hiring additional staff or outside contractors to enforce the ordinance, said Chad Edwards, a lawyer with the city.
Some short-term rental operators told the council during Tuesday’s meeting that they were being held to a higher standard than hotels and motels, which are not required to report monthly occupancy rates to the city.
Edwards said hotels and motels have other requirements that short-term rentals do not, including annual health inspections. Plus, the city needs to know how many rentals are being booked to determine if hotel and motel taxes are being paid. That’s not an issue with hotels and motels, he said.
Others who have pushed for more regulation of short-term rentals said the proposed ordinance does not go far enough.
Mark Streety, who represents the Lexington Urban Neighborhood Alliance, a consortium of downtown neighborhoods, said the group supports banning short-term rentals that are not occupied by an owner. Having too many short-term rentals owned by people who do not live in the county means less housing for Fayette County residents and drives up housing costs, Streety said.
Jo Ellen Hayden said that happened in her neighborhood. A man who already had a short-term rental purchased a second townhouse in the neighborhood. Hayden said another home may come up for sale soon.
“We are very afraid this gentleman is going to buy a third short-term rental,” Hayden said.
Others pushed the council to enact a restriction that would not allow short-term rentals within 600 feet of each other so there is not a concentration of short-term rentals in one area.
Under existing city ordinances, the owner of a short-term rental cannot enter into more than 52 rental agreements each year. Some hosts said that’s too restrictive and asked the council to change it.
“That would seriously hurt our income,” said James Mathews, who rents part of his home in Lafayette Parkway. Most of the rentals for his unit are one or two nights.
“Be careful that you don’t create something that is too hard to enforce,” Mathews said.
Many council members said any regulation of owner-occupancy and the location of short-term rentals would have to be addressed in the zoning ordinance, which is a different process.
“I think this at least gives us a place to start,” Brown said of the proposed changes that would require registration of short-term rentals.
Lexington is not the only city struggling with oversight of short-term rentals. Some cities, such as Boston, now require rental units to be owner-occupied after seeing a jump in the number of apartments being converted to short-term rentals, creating a housing crunch in a city that has long struggled with affordable housing.
Nashville recently hired additional code enforcement officers to suss out unregistered short-term hosts that weren’t paying city taxes. The staff were hired after a private investigation firm found more than 1,000 unregistered short-term rentals.
Policing short-term rentals and collecting taxes from them has been discussed for more than two years in Lexington. The city inked an agreement with Airbnb, the largest rental platform, in 2018, requiring the company to collect taxes and remit them to the city.
It has not been able to make similar deals with other websites and platforms, city officials have said.
Some council members said it’s possible the proposed ordinance will be tweaked further before is comes before the full council in March. It was first unveiled in September after some neighborhoods complained about rowdy porch parties and other problems with short-term rentals.
Council members who voted in favor of the ordinance during Tuesday’s meeting: Brown, Jake Gibbs, Preston Worley, Josh McCurn and Amanda Bledsoe. Those who voted against: Susan Lamb, Jennifer Reynolds.
This story was originally published February 19, 2020 at 11:33 AM.
