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Metro Council Approves New Regulations For Short Term Rentals

Ordinance Will Take Effect June 1, 2016 After Signed By Mayor

By a vote of 20 to 6, The Louisville Metro Council has approved a new set of regulations to permit the growing online industry of short-term rentals within Metro Louisville.  Hosting platforms such as Airbnb, HomeAway, VRBO and FlipKey are used by a growing number of homeowners seeking to rent out anything from an extra room to an entire house.

The short-term rental ordinance passed after the work of the Council’s Public Safety Committee.  Members began to review the need for regulation after Metro Codes and Regulations cited residents for renting their homes.  At the time, there were no regulations to enforce.

The new ordinance will regulate this growing internet industry and offer a level playing field and fairness to other businesses that are established rental facilities and hotels in the city.

 “As Chair of the Public Safety Committee I am proud we took our time and due diligence to ensure transparency and consideration of both the public’s and businesses’ views on this issue.  We have a good piece of legislation that seeks to balance both interests while promoting safety and ensuring accountability,” says Councilman David Yates (D-25).

Council Members Bill Hollander (D-9), Tom Owen (D-8), and David James (D-6) sponsored the Ordinance

“The ordinance allows this growing industry to operate in Louisville, levels the playing field with hotels and motels on transient occupancy taxes and protects neighborhoods by limiting the number of occupants and other provisions,” said Hollander,

The new ordinance will not take effect until June 1, 2016 to allow those who participate in short-term rentals to register with the city and educate themselves on the responsibilities of both hosts and transient users.  Another ordinance currently being drafted by the Planning Commission will address which zoning districts Short Term Rentals will be permitted to operate.

Both ordinances are required to permit Short Term Rental operation. The Planning Commission will forward their drafted ordinance to the Metro Council’s Ad Hoc Land Development Code Committee to be further discussed. The Metro Council is seeking action on the companion ordinance before theJune 1, 2016 enactment date.

“This ordinance represents a good first step in the right direction. Short term rentals are an industry that will only continue to grow and we need to embrace it as a mechanism to show off some of our fantastic neighborhoods,” says Councilman James Peden (R-23), Vice Chair of the Public Safety Committee..

“We’ve passed a reasonable regulation of a brand new industry which until now was not recognized as a full participant in the hospitality industry,” said Owen.

“It is important that we understand the trends in this new internet economy and at the same time we have to maintain protection of those industries that have been a productive part of our local economy.  I believe this ordinance is a step in the right direction,” said James

Here are highlights of the ordinance:

  • $25 Annual Registration Fee.
  • Online Registration will be made available by June 1, 2016.
  • Enforcement of Ordinance will occur 90 days following June 1, 2016.
  • Registered host or host’s “manager” must be located within 25 miles of the Short Term Rental.
  • Clearly marked evacuation plan on all premises.
  • No more than one contract on a short-term rental at the same time.
  • No more transient users than 2x the amount of bedrooms plus 4 can reside in the short-term rental at one time.
  • Penalties:
    • 1st Offense = Warning
    • 2nd Offense = $100-$500
    • 3rd Offense = $500-$1,000
    • Further action can be taken for subsequent offenses including a civil complaint or injunctive relief in Jefferson County, Kentucky Circuit Court.

Councilman Yates thanked fellow Public Safety Committee members and stated, “I am very proud of the many important topics we discussed this year on the Public Safety Committee, including: the Public Nuisance Ordinance, LMPD body cameras, Pop-Up Party Ordinance, the Short Term Rental Ordinance and the creation of the Syringe Exchange.  I am looking forward to another successful year in 2016.”

The ordinance is on its way to Mayor Greg Fischer for his signature.

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