Chattanooga passes new short-term vacation rental laws

May 16, 2023

Courtney Goins,

CHATTANOOGA, Tenn. (WDEF) — Chattanooga’s City Council passed new laws for owning short-term vacation rentals (STVR) on Tuesday.

It “simplifies compliance, increases fines for violations, and protects Chattanooga’s residential zones from overtly commercial activity,” according to the City of Chattanooga.

The new laws will prohibit STVRs with absentee landlords from being in residential areas. But they will still be allowed in commercial districts that allow hotels.

STVRs, where the homeowner lives full time, will be allowed in these commercial zones and residential zones.

Officials say they will grandfather in existing, permitted STVRs. Owners can renew their permits annually. They may also transfer property permits between owners.

The rules also require a local contact for each STVR to be available 24 hours a day by phone. And they must be able to arrive in-person within two hours.

Additionally, when a residential property is rezoned to become commercial, it will go into an 18-month cooling-off period before anyone can apply for an STVR permit for that property. Chattanooga officials say this is to discourage property owners from “circumventing” the new laws.

Those who violate these new rules must go before an administrative hearing officer and may be charged up to $500 per each day of violation.

Business owners and neighborhood groups met dozens of times over a year to develop these new rules.

“Chattanooga is truly an amazing place to visit, and we welcome guests from near and far to come see why we call it the Scenic City, but we must also work to crack down on illegal short term vacation rentals that disrupt the character of our neighborhoods and harm our own residents’ quality of life by inflating housing prices,” said Chattanooga Mayor Tim Kelly. “We’ve heard for years that the existing system didn’t work for business owners or for our neighborhoods, and I’m grateful to the City Council for the long hours they’ve put into enacting these common-sense ground rules that promote both healthy neighborhoods and the wise use of our commercial corridors.”