Council delays decision on short-term rentals district

Chattanooga City Council probably won’t finish working out the specifics of a proposed short-term vacation rental zone until new council members have a chance to take a good reading from their constituents.

If enacted, property owners within the district will be able to apply for permits to operate short-stay rental businesses, but those outside the district will not. Existing regulations allow property owners to do this citywide but only in R-3 or R-4 zones, which also allow offices and apartments.

Councilman Chip Henderson said he has pushed for replacing the zoning method because it creates “spot zoning” within neighborhoods.

The district would be in Chattanooga’s urban overlay zone, essentially between Missionary Ridge and Lookout Mountain, and from the North Shore to the Georgia line.

Last week, District 9 Councilwoman Demetrus Coonrod said she needed more feedback from Missionary Ridge residents and her constituents in Highland Park and Eastdale before she makes any decisions.

“Missionary Ridge is split,” Coonrod said. “Part of Missionary Ridge wants to have it, but the other part does not want to have it. It’s making sure we have the right areas that want to be included.”

District 9 residents in Highland Park have said they favor the rental zone and Eastdale residents want to know more about it, Coonrod said.

Coonrod invited Henderson to a May 8 community meeting to talk about the plan.

District 8 Councilman Anthony Byrd, who represents Lincoln Park, Avondale and part of Highland Park, also said he needed time to gauge residents’ feelings.

“Once you make the decision, it’s there,” Byrd said.

“Some people are going to like it and some people aren’t going to like it,” Henderson said. “I think what you are going to have to do is satisfy the greatest number of people that you can.”

Councilman Erskine Oglesby, who represents District 7, said many of his residents are happy with it, but he’s going to meet at least once more to make sure he is on the same page as his constituents.

Byrd, Coonrod and Oglesby joined the council since April 17. Five other council members wrestled with a citywide short-term vacation rule for at least two months last fall.

Supporters said they had a right to make money from their homes and opponents said they didn’t want “mini-hotels” in the neighborhoods. In October, matters hit a roadblock when six council members voted to squash the citywide certification idea.

Councilman Russell Gilbert, who represents District 5, has called for cutting out the northern tip of the urban overlay zone from the proposed zone, drawing a line along Wilder Street.

Henderson wants Lookout Valley to be in the district.

Once the zone boundaries are worked out, council members must deal with compliance, enforcement and revenues generated by permitting, fines and sales tax.

Hundreds of shortstay properties already operate in the city without paying sales and hotel-motel taxes, Henderson said. Getting operators on board through certification will change that.

“Short-term vacation rentals was a $2.5 million business last year in Chattanooga,” he said. “We’re not collecting a tenth of the taxes off of that.”

Coonrod favors putting new sales tax revenues generated by shortterm vacation rentals into early childhood learning.

Councilman Darrin Ledford, newly elected in District 4, has repeatedly questioned whether permit fees and fines for operating without a permit would cover the cost of enforcing the new rules.

City Attorney Wade Hinton said Chattanooga will use a host compliance service to monitor advertised properties and compare them to the city’s list of permitted short-term vacation operators. Violators will receive notices to apply for permits or face fines.