Note: This story has been updated to elaborate on the Andersons’ case.
A Nashville ordinance regulating short-term rentals, including Airbnb, is facing its first legal challenge. The lawsuit, filed by the Beacon Center of Tennessee, is focusing on one provision that makes it harder for property owners to rent out their homes full-time.
P.J. and Rachel Anderson have occasionally rented out their Germantown home on Airbnb to help pay off their mortgage. They recently started considering a move to Chicago for a few years, but Nashville has a cap on the number of rentals when the owner doesn’t live there full-time — 3 percent of properties per census tract are allowed to be “non-owner-occupied short-term rentals.”
The Andersons applied for a short-term rental permit, anticipating the move to Chicago. They were denied. Rachel says that hurts their financial future.
“It seems kind of silly in the short term,” she says. “But if you look at it in the long term and crunch the numbers, it’s like, ‘Wow, that is really unfair.’ “
When asked why they didn’t rent out their house conventionally instead, they said they wanted to be able to return to Nashville and use their house occasionally.
The Beacon Center, which is best known for publishing the annual “Pork Report,” a list of alleged fraud and abuse in government, is representing the couple. This is its first-ever lawsuit. President Justin Owen says it decided to take up the case because it deals with issues at the core of the group’s free market principles.
“Economic liberty, property rights — those are the types of cases we wanted to help Tennesseans with,” Owen says.
In the case, the group argues the rental cap is unconstitutional because it gives some people the ability to rent out their homes, but not others.
Nashville passed a whole set of regulations on Airbnbs earlier this year. At the time, the cap was seen as a compromise between Airbnb advocates and neighborhood groups that wanted to limit the number of short-term renters.
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