Jan 2019 Nashville Short Term Rental panel

[Tim Bergstrom]

Hey BP,

Tim here again and I just wanted to make a quick post to recap a special panel that was put on this morning by my brokerage Village to shine some light on the most current Short Term Rental details and developments in Nashville. The information I’m including in writing this is my understand of the codes and regulations as of Jan 10 2019.

The four panelists were:

Jon Michael - Zoning Administrator, Metro Codes

Emily Lamb - Zoning Chief, Metro Codes. Former Assistant Metro Attorney

David Taylor - Vice Char, Metropolitan Board of Zoning Appeals

and Megan McCrea - President of NASTRA (Nashville Short-Term Rental Association)

A TON of information was covered and lots of questions asked, of which I can't remember every detail. But I thought I'd just write this quick post to address and recap some common things that were talked about and asked by a majority of people as well as issues I've been inquired about from other people that these panelists spoke to. (Disclaimer, I am NOT an attorney or am I giving legal advice and this post is under the premise that policies can and DO change. These are just some notes I took and gleaned from this panel to the best of my understanding)

For anyone not super familiar with Nashville STR permit types or are researching information, there are simply two types now (there used to be 3). Owner-Occupied and Non-Owner Occupied. They both have their own set of regulations and rules required in obtain the respective types of permits. Zoning is king when determining whether a property can qualify for Non-Owner Occupied permits. For further details check out this link: https://www.nashville.gov/Codes-Administration/Short-Term-Rentals/Permit-Types.aspx

One of the main topics of conversation was a codes and permitting issue that has arisen in the past few months regarding a section of code law that was being missed while issuing permits over the past several months regarding HPR properties (two tall skinnies next to each other that are separately owned). The code/law issued back in Feb of 2018 states that in order for someone to operate an Owner Occupied STR in Nashville in one of these dwellings, the operator/owner must own BOTH units. Not just one side. Due to this error that codes was not catching for a while some owners/operators are getting hit with this issue and are unfortunately having their permits revoked, by law. I'm not taking a side on this, but I simply bring this up to make anyone reading this aware of this codes regulation within the law that got passed last year. If you are in the market to buy a Short Term Rental here in Nashville, make sure you are aware of this regulation. For the details google "BL2017-608" and you should be able to find the breakdown you need.

Two other terms the panelists listed to google in finding out regulation information are:

“SB-1086” and

“NASHVILLE ZONING LAND USE TABLES”

They specifically referenced these for our benefit as agents and developers, but even as a seller or buyer it is good to educate yourself.

A few other quick things that will be helpful for you to know if you are looking to make a STR investment here in Nashville:

1. Permits don't transfer. Some people know this, some don't. If you sell you properly permitted STR property, the permit does NOT transfer with the sale. The new owner will need to apply for a new permit
2. If ownership changes on the deed, the permit is canceled. For instance, if you own the property in your name, then for some reason want to transfer it to an LLC or vice versa for some reason, changing the ownership will kill your permit and you will need to reapply. Even if you own the LLC you transfer the deed in to. So essentially, don't apply for a permit until you know for certain the name on the deed is going to be the name that stays on the deed while operating
3. There are two full time codes inspectors actively looking for violations every day. They also use a special website with a special algorithm that scans sights like Airbnb and VRBO looking for listings that do not have the proper permits. They take this very seriously.
4. There is a zoning type called “SP” which stands for “Specific Plan”. If the SP doesn’t specify that STRs are eligible then they are not, even if the previous zoning type that it is being developed on would allow it (refer to zoning types in link provided above)

I could go on, but these were some of the main takeaways I thought were interesting beyond the basic information many people may already know.

All this being said, there is still a lot of opportunity to get in on a Short Term Rental investment here in Nashville. I know of many opportunities currently available and coming up that are well within the permit approval guidelines.

I just wanted to offer some value to anyone else was interested in this who may not have been at this meeting today or is currently researching options for their investment.

I’m also happy to discuss further to the best of my knowledge if anyone else is interested!