Nashville Short Term Rental/AIRBNB and the codes department

7 Replies

Hey Nashville,

With all of the fuss around the legislation and moratorium on type 2 STR permits has anyone "heard" of anyone getting busted for not have a STR permit? If so, what were the consequences of this bust?

Our focus is to build an STR portfolio In Nashville like we have in Colorado Springs but the laws are harder to overcome In Nashville.

Looks like there are over 5000+ STR is Nashville and many of these do not have a permit to operate. The city says each permit should be listed with the photos of the property and I am seeing a TON of properties without a permit.

I am curious how the city might go about regulating this since you cannot nail down the exact address of the properties by simply surfing the website. You'd also need an entire team of people to track down compliance with every property, Something the city doesn't have. (or maybe the STR committee they created is doing this?)

After speaking the with codes and STR departments it is clear neither has any idea how they are regulating it or the degree of seriousness they are pursuing STR bandits.

I am not one to take risks with the city but is this something they are seriously cracking down on? If so, how are they doing this?

Cheers,

Brandon

I don't recommend it, but I know some people who have been doing it for a while with no problems. I think the concern would be if you get noise complaints called in against you and they dig into it. The penalty as stated right now is $50 per day that you violated the law, but it has to be imposed by a court, not an administrator or LEO. I haven't heard of anyone getting caught, but since airbnb has digital records of your whole history, that could in theory be used in any case the city brings against you. That would only really be painful if you had a lot of properties, though.

I'm going to go out on a limb and say that Nashville is probably is not as vigilant about enforcement than Asheville currently is. Our fine is $500/day (up from $100) and they've issued 4X more permits per month this year than last year.

But, more importantly, why not just look for areas where plenty of permits are available? For nearly every address I plugged in, at least one permit was available when I searched. http://maps.nashville.gov/strp

In Asheville, about 20/80% of citations issued came from neighbors and the city task force respectively. Apparently they've issued ~700 citations out of the ~1000 STRs that exist. So, in Asheville, your chance of receiving a citation due to a neighbor's complaint is about 14%. I'd imagine that's going to be pretty similar anywhere else. Nashville recently set up a complaint hotline a few months ago so they're obviously getting more serious. Then again, apparently one out of every two STRs in Nashville are operating permit-free. It looks like they're aware of the "issue" but not doing nearly as much as other cities to actually enforce it. Personally, I'd be much more willing to operating without a permit in Nashville than Asheville (but again - you should be able to get a permit). Take what you will from all of this.

I have heard of one. Had a cleint that wanted to buy a house and we found out they had been operating as an “illegal” air bnb and have a pretty hefty fine and their home was blocked from being able to obtain a STRP for 3 years. Hurt their resale and was sitting on the market. Quite a few people are unloading their secondary homes that have been used as air bnbs for the past few years. If willing to take the risk, then go for it. Could always do a long term lease for a few years if got caught. Hope this helps!

I know at least 3 people that have been shutdown in Nashville for no permit. Each received a 3 year ban on the property. Nashville has hired someone specifically to troll the site and then send them to court for a codes violation which results in a ban. I would highly not recommend. Your mileage may vary.

To second @Mark Hower , I have a business contact who runs a short term rental management company in Nashville and he told me that Airbnb sent out over 2,000 notifications to unlicensed airbnb owners and all were banned from airbnb for 3 years.  I would not recommend Nashville as a specifically short term rental oriented market for several years until they sort out the codes.

However, I own 5 short term rentals in the Smoky Mountain area of Tennessee, and they are killing it, and since the economy out there has relied on short term rental cabin/tourist traffic for decades, it would be one of the last municipalities to crack down on that, if you're still looking for ideas.

I know a person who was shut down by codes for not having a permit.  They were banned from obtaining a permit for 3 years by codes. 

@ Avery I question that Airbnb banned owners. Codes has been active about mailing notices to short term rental owners with permits, but Airbnb has been very lacking about any enforcement.  They have no system to verify if one did have a permit (other then manually looking at every listings photo). Secondly, the banned for 3 years is a Nashville codes thing. Lastly, It would not be in Airbnb's best interest  to ban owners. It seems logical they would give them notice first. I have been active in STRP scene and have even been to a couple meetings with Airbnb representatives to Nashville and they seem to have no interest in policing themselves. I might be wrong, but that is my impression. 

I do have a permit but do not have it on all my listings and have not received anything. I think most enforcement is done by individual complaints. 

@Carrie Carlton ok so "the powers that be" is banning people for 3 years. No matter where that comes from, be it codes or airbnb, it's not something I would want to happen to my property that I specifically invested in for STR purposes. Apologies for misspeaking.

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