Lexington makes big changes to short-term rental regulations. Why some aren’t happy.
New rules restricting how many short-term rentals can be in Lexington neighborhoods will take effect Dec. 12.
The Lexington-Fayette Urban County Council voted unanimously Thursday to approve the changes to the city’s ordinances regulating short-term rentals, after months of debate.
The new rules largely affect unhosted short-term rentals, where the owner does not live on the property.
The current regulations, which passed in July 2023 and took effect in January, have no restrictions on the number of unhosted short-term rentals allowed in neighborhoods.
The changes allow the Board of Adjustment, which oversees conditional use permits for unhosted short-term rentals in neighborhoods, to deny a permit if there is an existing rental within 600 feet or if 2% of the homes within 1,000 feet are short-term rentals.
The changes also decrease the number of people allowed in a short-term rental from 12 to 10.
The restrictions on short-term rentals, made popular by websites such as Airbnb and VRBO, were requested by Lexington neighborhoods after many saw clusters of short-term rentals pop up after the initial rules took effect in January.
Other cities, including Louisville, have installed similar density restriction after seeing some neighborhoods overrun with short-term rentals.
The Board of Adjustment has been inundated with conditional use applications for unhosted short-term rentals since January, often resulting in marathon, eight-hour hearings, said Councilwoman Liz Sheehan.
Sheehan had originally proposed during a Tuesday work session to limit the number of conditional use applications to five per Board of Adjustment meeting. That was later changed by the council during Tuesday’s work session to limit the number of applications per meeting to 10.
The council passed changes to the short-term rental ordinances in August. The Urban County Planning Commission, which must approve any changes to the city’s zoning ordinances, made some changes to the council’s proposal at a meeting in November.
Still, neighborhood representatives, who pushed for restrictions on rentals, said the ordinance allowed vacation rental operators to use exceptions to get around the new density restrictions and asked the council during a Tuesday meeting to nix those exceptions.
Short-term rental operators could still be granted a permit even if there were multiple short-term rentals within 600 feet or if rentals exceeded 2% in 1,000 feet if they could show:
- The property is next to nonresidential zones that allow short-term rentals as a principal or accessory use such as business zone
- There is a significant environmental feature or minor arterial or higher classification road that separates the proposed short-term rental from other unhosted, short-term rentals within the buffer area
The council ultimately kept those exceptions in the ordinance.
Operators, neighborhoods ask for changes
More than a dozen people spoke for and against the proposed session at a Tuesday council work session. The council gave its first reading of the changes to the ordinance at a meeting later Tuesday night.
Lynne Flynn, of the Picadome Neighborhood Association, said she has counted 23 short-term rentals in the neighborhood that borders Clays Mill Road and includes Picadome Elementary and Lafayette High School.
“That’s a density of 2.5%,” Flynn said during the Tuesday work session.
A short-term rental operator could argue Clays Mill Road is a minor arterial and be granted a conditional use despite the neighborhood having more than 2% of its homes and apartments used as short-term rentals.
Walt Gaffield, president of the Fayette County Neighborhood Council, also urged the council to tighten up or strike the exceptions because they were too broad.
“We are not opposed to STRs, but we don’t want them clustering in neighborhoods,” Gaffield said. “These exceptions can create more short-term rentals in neighborhoods.”
Some operators also urged the council to delete a provision that does not allow an owner of a vacation rental to transfer the conditional use permit to a buyer at the time of sale. If the new owner wants to continue to operate the short-term rental, it would have to go before the Board of Adjustment for a new conditional use permit.
“Allowing the transfer of a conditional use permit allows for consistency,” said Danny Albertson, who owns multiple short-term rentals.
Density restrictions passed in other cities and counties have been challenged in the courts, Albertson said.
Other vacation rental operators also stressed visitors who use short-term rentals spend millions of dollars in Lexington. Many who rent short-term rentals work in construction, health care and other fields, bringing in tax dollars to Fayette County, operators argued.
“Do we want visitors or do we not?” said Steve Dennis, a short-term rental operator.
This story was originally published December 6, 2024 at 8:05 AM.
