Regulations governing Louisville’s short-term rental industry won’t take effect until later this summer.
The Louisville Metro Council passed a set of regulations last year for the growing industry, which includes online home rental sites like Airbnb and VRBO, among others.
Initially, the council ruled the regulations would begin June 1 of this year. They’d require people renting property via online sites to pay a registration fee, adhere to capacity limits and ensure evacuation plans are clearly displayed on the premises.
Failing to comply would eventually result in fines up to $1,000, per the ordinance.
Last week the council voted to amend the ordinance, pushing back the effective date to August 1.
The delay comes as the council’s ad hoc committee on the land development code continues to work with Louisville Metro planning staff and the city’s planning commission to develop zoning regulations for short-term rentals. The committee is also looking to determine where owners will need a special permit to operate a short-term rental.
Councilman James Peden, a Republican who represents District 23, chairs the ad hoc committee. During Thursday’s council meeting, he said his committee wasn’t ready for the June 1 start date.
Councilman Bill Hollander, a Democrat representing District 9 and chair of the council’s majority caucus, said delaying the start date for short-term rental regulations doesn’t necessarily come as a surprise.
The idea, he said, is to ensure land use policy is solidified and the property registration process — which will be accessible online — is fully functional before regulations take hold.
“So there’s no confusion,” Hollander said.
With its approval of the amendment to push back the initial deadline, the council also effectively killed a previously submitted amendment to provide certain exemptions for potential home renters during the Kentucky Derby.
The exemptions would allow renters to forgo the registration process if they’re looking to rent only during days surrounding the city’s famous horse race.
Council President David Yates, a Democrat representing District 25, filed the amendment seeking the exemptions.
“It was important to me to make sure the debate was before the council,” he said.
Yates acknowledged that since he filed the amendment, support for such exemptions has waned and it’s unlikely any exemptions will be offered to short-term rental hosts.
“And if that’s what the majority of my members want, then that’s what will happen,” he said.
Hollander said he’s opposed to any such exemptions because without the registrations, it becomes difficult to ensure each person renting their property pays the required transient occupancy tax.
“And we know the revenue is greatest during the periods which some people would like to exempt,” he said.
The tax, he said, is an instrument to keep short-term rentals “on a level playing field with hotels and motels.”
It’s unclear how much money will be generated by taxing short-term rentals in Louisville. A similar tax in Nashville is expected to bring in about $1.2 million annually, according to a report from The Tennessean.
Hollander said ongoing budget negotiations make it unclear when the the ad hoc committee will hold its next meeting. Their next scheduled meeting is set for Monday evening.
“The budget committee hearings sort of take precedent at this point,” he said.