Rachel and P. J. Anderson live with their two children in Germantown, a neighborhood just outside of Nashville. P. J., a musician, often brings his family along while traveling. Like many Nashville residents, the Andersons rent out their home through Airbnb, an online marketplace and homestay network, to supplement their income while traveling. Unfortunately, the Metropolitan Council (the legislative body in Nashville and in Davidson County) implemented strict regulations that were a burden to families such as the Andersons. The rules, for instance, set an arbitrary cap on the number of households that can obtain short-term rental permits. Friday’s court decision, however, was a win for the Andersons and other Airbnb users: It rightfully recognized the rights of property owners.
Circuit judge Kelvin Jones ruled in favor of the Andersons in a lawsuit that the Beacon Center, a free-market think tank, filed last year on the Anderson’s behalf. Jones concluded that Metro Council’s ordinance is unconstitutional. Specifically, Jones held that the definition of a “short-term rental property” was ambiguous: “An ordinary person of average intelligence would not be able to understand the distinctions between [short-term rental], hotels, bed and breakfasts, boarding houses, hostels, et cetera,” he wrote. In doing so, he “delivered a big victory for property rights,” Braden Boucek, director of litigation for the Beacon Center, tells National Review Online.
The ordinance in question had provided strict guidelines for renters (such as by limiting the number of guests who could be hosted), and required Airbnbers to pay hotel taxes as if they were in the hostelry business full time. The regulations had disastrously blurred the line between hotels and short-term rental properties. “Are P. J. and Rachel running a hotel or aren’t they?” the Beacon Center analysts ask at the think tank’s website. “The way the ordinance is written, no one could know.”
Furthermore, Metro Council’s ordinance had categorized short-term rentals by doling out owner-occupied rental permits and non-owner-occupied rental permits, which sought to identify whether the property owner lived in his or her home full time while renting. The classification allowed Metro Council to cap the number of non-owner-occupied rentals in a census tract at 3 percent. This categorization is ineffective, though, since even homes with owner-occupied permits only have to be “generally present during the rental,” a phrase that is as ambiguous as the ordinance itself.
Worst of all, Metro Council had implemented the ordinance long before city officials had worked out how to enforce it. Although it has been a year and a half since Metro Council passed the ordinance, key local officials had not been brought on board by the time Kelvin Jones issued his ruling Friday. Nashville’s police department have strongly opposed giving police officers the tedious task of Airbnb rules enforcement, and Nashville’s mayor Megan Barry had yet to decide which department was best suited for the duty.
