Reject the Proposed Moratorium on Short-Term Rental Permits in Chattanooga, TN

Please join us in signing this petition to help protect our right to free enterprise and entrepreneurship in Chattanooga!

On Tuesday, April 5, 2022, the Chattanooga City Council will be voting on potentially placing a moratorium on issuing new non-owner occupied short-term rental permits until January 2023. 

This moratorium would be an infringement on our right to free enterprise and would be setting a concerning precedent for government control in singling out and banning a specific type of small business from operating in our city.

This petition was written in an effort to compile the facts and concerns that many Chattanooga residents share about this particular action by our city council. 

We are requesting that the Section 11-519 amendment to the Chattanooga City Code, Part II, Chapter 11, Article XX, be REJECTED.

 

RATIONALE FOR OUR REQUEST

COMMUNITY VOICE: Very little advanced notice has been given to the public to respond to this proposed moratorium. The council took forward steps towards approving this amendment before publicly hearing a single word from the community. They are planning a final vote only one short week after the initial proposal was presented on 3-29-22. This shows a lack of concern and compassion for how this decision impacts our community.

TIME: The stated purpose of the moratorium is to take the next 8+ months to re-evaluate and revise the current restrictive ordinance. This time frame is excessive for revising an ordinance that is already in place. Research and implementation of a revised ordinance can proceed without passing this moratorium. 

PRECEDENT: If our council believes it is an appropriate action to temporarily ban new permits, this sets a dangerous precedent for a potentially permanent ban on short-term rentals in our city. This has been proposed in the past and would be an economically irresponsible devastating hit to the $1.1 billion-a-year tourism industry in Chattanooga. The thousands of guests we host are people supporting our attractions, venues, restaurants, and small businesses. Americans are traveling differently than ever before and short-term rentals play a very important role in promoting and supporting tourism in Chattanooga. We need our city council to see the bigger picture, understand current travel trends, and recognize the value that short term rentals have in our local economy. There is much more at stake here than they seem to be acknowledging.

GOVERNMENT OVERREACH: Attempting to control the growth of a specific type of small business is a concerning government overreach.  If Chattanooga was receiving an influx of business license applications for a particular type of small business, such as nail salons, coffee shops, dental practices, law firms, etc., would it be right for them to ban any further licenses for that one particular type of business? Absolutely not. Short-term rental hosts are small business owners, who offer welcoming accommodations and hospitality to the thousands of tourists and guests our city hosts every year. They deserve the same rights as any other small business owner and should not be blocked from pursuing this type of entrepreneurship. The Chattanooga City Council should not be exerting their power to implement market control over this one sector of the hospitality industry. 

ECONOMICS 101: Their reason for this abrupt and restrictive proposition is that they are receiving an influx of applications for these permits. If there is an over-supply of a particular type of business and the demand doesn’t keep up, the market naturally corrects itself. In this case, short-term rental hosts will change course if their profit margins aren’t high enough. It’s simple economics and the beauty of a free market economy, which is directly linked to the American prosperity we take for granted every day. Chattanooga is thriving economically because of the many brave and creative people who are taking entrepreneurial risks to plan events and open new attractions, restaurants, and businesses. Our city council should be proponents of innovation and growth. This proposed moratorium is antithetical to the values they were elected to protect and promote.

RESIDENTIAL HOUSING MARKET IMPACT: There is no substantial evidence that short-term rentals are causing our increased housing prices or creating our housing shortage. Cities all across the country are experiencing those same issues. Out of 40,000+ residential properties (zoned R1) within the restricted short-term rental overlay map, there are currently only 137 non-owner occupied STVR permits. That is less than 0.5%. The claim that investors buying homes to create short-term rentals is causing a major market disruption is absurd. A more realistic explanation is that people all across the country are realizing what a gem Chattanooga is and are relocating here. Chattanooga’s strong economy and entrepreneurial spirit are certainly contributing factors to our continual growth of new residents. Many are coming from areas where real estate had a higher value and are therefore willing to pay more for the house they want here. 

CURRENT ORDINANCE EFECTIVENESS: The current ordinance is already providing any neighborhood ample opportunity to prohibit new permits from being issued if they feel strongly against them. Neighbors are notified directly when an application is filed and have 30 days to submit their objection. Permit requests are denied on a regular basis when neighbors speak out against them. Also, homeowners’ associations have the authority to ban them from their neighborhoods. The current ordinance is effectively working to represent the wishes of community members who are opposed to living next door to a STVR. From that standpoint, additional restrictions are certainly not needed.

CURRENT ORDINACE ENFORCEMENT: The primary problem the city council should be addressing is the lack of enforcement of the current ordinance. According to data from Airdna.com, there are 936 active vacation rentals in the Chattanooga area. Only 405 of those are properly licensed and permitted, which means approximately 531 are operating illegally. Permitting ensures safety measures with the requirement of inspections and establishes the process of remitting taxes. In 2021, Airbnb alone remitted $3.5 million to Hamilton County/Chattanooga in taxes. If all the currently operating rentals were operating within the current ordinance and tax laws, that total could have potentially been double. The current fine for illegally operating an STVR in Chattanooga is $50/day. Some quick math indicates that the city could potentially be collecting around $25,000 a day in fees if they made a stronger effort to enforce the rules they have put in place. In contrast, this moratorium is removing the avenue for those who are trying to be properly permitted to complete the process. The number of illegal STVRs will inevitably grow over the next 8 months if this moratorium is implemented. Taking legal action to restrict those who are trying to follow the law while not addressing those who are breaking the law is nonsensical. Additionally, the amendment they are voting on does not allow a grace period for those who are currently investing thousands of dollars into starting a properly permitted rental. 

This moratorium may seem like an insignificant thing to some people, but we can’t ignore how small decisions made by those in power can lead to much bigger implications for our city. This overreach sets a precedent for:

• Increasing government control in our local economy
• Threatening our right to free enterprise
• Controlling and limiting the use of privately owned property
• Diminishing the entrepreneurial spirit that helps Chattanooga thrive
• Crippling an important support system to our revenue generating tourism industry

The conversation on regulation and taxes for short-term rentals will continue and hopefully involve community voices from all differing opinions. However, shutting it down for over 8 months while they deliberate is unacceptable. 

Please join us in requesting that the Section 11-519 amendment to the Chattanooga City Code, Part II, Chapter 11, Article XX, be REJECTED by signing this petition. Your voice matters!

 

Additional Resources:

• Current STVR Chattanooga Ordinance
• Video recording of the 3-29-22 City Council Meeting. (Skip to 30:45 for the council dialogue and voting. Listen to community speakers at 49:20.)
• Proposed STVR Ordinance Amendment for Moratorium: Final reading on agenda for 4-5-22. 

 

Consider sending a quick e-mail to your council member letting them know you oppose the STVR moratorium!

CHIP HENDERSON (District 1): cchenderson@chattanooga.gov

JENNY HILL (District 2): jhill@chattanooga.gov

KEN SMITH (District 3): kensmith@chattanooga.gov

DARRIN LEDFORD (District 4): dledford@chattanooga.gov

 ISIAH HESTER (District 5): ihester@chattanooga.gov

CAROL B. BERZ (District 6): cberz@chattanooga.gov

RAQUETTA DOTLEY (District 7): rdotley@chattanooga.gov

MARVENE NOEL (District 8): mnoel@chattanooga.gov

DEMETRUS COONROD (District 9): dcoonrod@chattanooga.gov

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