SHORT-TERM STUMBLING BLOCKS
Proposed Chattanooga vacation rental district up for review
Olivia Karavatakis just wants fair rules when it comes to regulating what she describes as her passion: renting her home to guests for short-term stays.
Karavatakis, an energy efficiency consultant, has regularly rented her two-story Highland Park “Sunshine House” through internet-based booking site Airbnb for three years. How she handles the business side of things will change if the Chattanooga City Council passes legislation establishing a special short-term vacation rental district in the city’s core and Lookout Valley.
When Karavatakis joined the host community, all she had to do was list her home online. If the new short-stay rules go into effect, she will need to get a short-term vacation rental permit and a business license and pay hotel-motel taxes.
“I think this ordinance they are creating is a lot better than when they started,” Karavatakis said
during a tour of her home.
When the city council first considered new short-stay legislation last fall, she and other host operators feared they might wind up in the same league as hotels and motels when it came to fire and safety requirements. They said their homes should not be treated the same as multistory hotels.
Karavatakis called the new legislation, which includes safety requirements, a good compromise.
In October, the council abruptly shot down a proposal to replace zoning regulations with a citywide certification mechanism to manage short-term vacation rental property uses. Chattanooga requires properties used for short-term vacation rentals to be designated R-3 or R-4, which also allows office and apartment uses.
Councilman Chip Henderson, who has long championed getting the city away from using zoning to regulate short-term rentals, brought the issue back in April. While the core idea of replacing zoning with certification remains in place, it will be limited to the special district. Outside the district, zoning would remain in place to control short-term rental property usage.
“I think the district, limited to where it can be in Chattanooga, has made the difference,” Henderson said of the council’s reception of the new plan.
Zoning creates unnecessary stumbling blocks, he said, recalling neighbors who said they are fine with someone using their home as a shortterm rental but oppose rezoning
because it would allow offices or apartments.
Passing the legislation also will mean Chattanooga will get to tap the city’s mostly underground short-term rental economy through hotel-motel taxes, Henderson said. Of the estimated 500 Chattanooga properties listed on internet hosting sites, only a handful are properly zoned R-3 or R-4, he said.
Chattanooga’s short-term vacation rental business raked in an estimated $2.5 million last year, but the city saw little tax revenue from it, he said.
If the council adopts the rules, the city will engage a vendor to monitor short-term vacation internet listings and compare them to the city’s permitted operators, City Attorney Wade Hinton has said. Anyone operating out of compliance will be fined.
Karavatakis said she considers herself an “ambassador for the city.” She offers local insights on the best places for guests to shop and do things, asserting she is a “super-staunch supporter” of local businesses. That’s something visitors won’t get at a chain hotel, she said.
“I love Chattanooga and I love showing what Chattanooga has to offer,” Karavatakis said.
Her guests have included tourists, medical students on rotation, veterinary interns, outof-town business professionals and even rock climbers, she said.
“Airbnb seems to be a really good fit for that type of community because these are people that need a kitchen,” she said. “They need a place to store all their equipment or a nice place to study, and having human interaction versus staying in a hotel.”
The hosting life helps her pay the bills and have new experiences, Karavatakis said.
However, not everyone feels short-term rentals are beneficial.
A number of neighborhood association representatives from across the city have expressed opposition to proposed short-term rental regulations over the last year.
The most vocal opponents — primarily residents of North Brainerd and Bal Harbor — have criticized the city for not enforcing existing rules on short-term rental operators who have not gone through the zoning process. Several have made it clear: they just don’t want rentals in their community.
North Brainerd Neighborhood Association President Cynthia Stanley-Cash has said residents are afraid short-term rentals — which she described as “mini-hotels” — will compromise their safety.
That’s really not the case, especially with owner-occupied short-term vacation rentals, Karavatakis said.
With an actual hotel, anybody can show up and get a room, she said. With Airbnb, the booking process allows the host and prospective guest to vet each other.
“I’m a single female living by myself,” Karavatakis said. “I don’t want just any Joe Blow coming and staying with me if I don’t feel comfortable that they’re not being forthcoming with information. For me, that’s my safety check.”
Although she has been operating under the radar as far as city zoning regulations go, her community has been “very receptive” to the “Sunshine House” short-term rental business, Karavatakis said.
She said she’s in a pretty good position to know, since she serves as the special chairwoman of the Highland Park Neighborhood Association.
Other opponents have singled out rental properties not occupied by their owners.
“We want them to fit within the culture of our neighborhoods,” Cora Lanier, secretary of the Boyce Station Neighborhood Association, said in a recent community meeting.
Glenwood resident Korlon Kilpatrick said he worries potential “predatory” buyers would buy up homes in his neighborhood and leave it up to the community to deal with bad guest behavior.
The latest regulation proposal goes toward addressing those concerns, Henderson has said.
Unlike owner-occupied rental operators, other applicants seeking short-term vacation rental permits must submit to a hearing if nearby residents voice opposition. They also have to pay a $125 application fee as opposed to the $75 fee paid by owner-occupied businesses.
Glenwood is not included in the latest draft map of the shortterm rental district boundary, which extends a little further east of Crest Road, toward Missionary Ridge.
The council’s Planning and Zoning Committee will review the short-term vacation rental district map and ordinance on June 6, Henderson said.
“Hopefully, it will be ready for a vote on June 13,” he said.