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Louisville Metro Council committee advances ordinance to temporarily ban new Airbnbs, other short-term rentals

A couple of houses in Louisville's Highlands area, a common location for short-term rentals in the city.
Jacob Munoz
Houses in Louisville's Highlands area, a common location for short-term rentals in the city.

Members of the planning and zoning committee voted 5-3 Tuesday on an ordinance that would stop new short-term rental applications. It comes as city planners work on suggestions to change laws surrounding the rentals.

In November, Metro Council passed a resolution directing the city’s planning and design agency to review the effectiveness of current short-term rental policies.

City planners released their initial recommendations last week. The suggestions include:

  • Requiring residents to live at their units for six months before applying for an owner-occupied rental application
  • Raising the annual $100 rental registration fee
  • Requiring rental owners to apply for conditional-use permits if they assign hosts to oversee their units

The current local law requires owners to get conditional-use permits if a rental unit is neither an owner’s nor host’s primary residence, or if the rental unit is located in the Old Louisville or Limerick neighborhoods.
But as the process for changing the rules proceeds — city planners are currently seeking public comment — several Metro Council members are pushing for a temporary moratorium on new short-term rental applications.

The ordinance under consideration was originally limited to three neighborhoods. But after council members considered including more and more neighborhoods, committee members passed an amendment to expand its reach throughout the city.

Democrat Jecorey Arthur, who represents District 4, is the original sponsor. He said there has been a high concentration of short-term rentals in his district’s neighborhoods, which are in and near the Central Business District, and that they’re taking away from Louisville’s available housing stock.

He said he knows of residents in Phoenix Hill and Butchertown who moved away because of Airbnbs and other short-term rentals.

“You can't have a neighborhood without neighbors, and short-term rentals take away the possibility of having those neighbors,” he said.

The ordinance could be passed by the full Metro Council as early as next week. If approved, the moratorium would last up to six months or until council members accept new rental regulations sent by the city’s planning commission, whichever comes first.

It would not affect short-term rental applications already being processed or existing rentals that need to be renewed.

According to city data, there are about 1,100 short-term rentals registered in Louisville. Using neighborhood data analysis provided by Metro United Way and the Kentucky State Data Center, LPM News determined that areas with the highest numbers of short-term rentals also had more renter-occupied units than owner-occupied units.

The planning and zoning committee’s vote on Tuesday was split along party lines. Republicans who voted against the ordinance criticized its potential impact on business opportunities and property rights.

Metro Council Republicans represent areas outside the city’s urban core where there are fewer short-term rentals. They hold nine of the body’s 26 seats.

Democrat Ben Reno-Weber represents District 8, which includes the Highlands neighborhoods. He voted in favor of the proposed temporary ban and highlighted existing problems, like unregistered rental units and large companies buying up properties.

“The moratorium is intended to just make sure that we don't have people taking advantage of that system while we get the things that we, I think, collectively mostly agree on,” he said.

After the ordinance’s passage, an Airbnb spokesperson said in a written statement that representatives for the company recently met with council members and shared their concerns about the ordinance.

“The moratorium ultimately takes time away from city staff members who are working to develop new rules. We look forward to continuing to work with the City Council and the Planning and Zoning department to update existing rules to allow residents to benefit from the local tourism economy,” she wrote.

The city’s public comment period is open until mid-June.

Jacob is LPM's Business and Development Reporter. Email Jacob at jmunoz@lpm.org.

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