As the Nashville short term market continues to grow, the Metro Council continues to grapple with how to properly regulate short term rental permits. With BL2019-1633 filed by Council Member Burkley Allen, the Council sought to do a couple of things: bring Nashville’s short term rental rules into compliance with current State laws and to eliminate non-owner occupied short term rental permits. It’s the second part of this Bill that a core group of individuals set out to influence in a meaningful way. Below is the recap of the last 90 days of our activities:
Key take-aways from the newly passed BL2019-1633
- It’s business as usual for all RM zoned properties until Jan 1, 2022. You can obtain new permits, transfer permits, etc.
- The original start date of October 31, 2019 no longer exists
- You no longer have to file an intent to lease with Metro by Jan 1, 2020
- You no longer have to obtain a building permit by July 2020
- You no longer have to worry about the “death penalty”
- There is a very important item engineered into this legislation that we can talk about privately
Timeline of Events for BL2019-1633 and Our Actions
On May 20th Council Member Burkley Allen filed BL2019-1633 just hours before the filing deadline and with no public vetting or input. In the original version of the Bill, she eliminated all new RM permits effective October 31st, 2019. The original version had no provision for transfers and included a “death penalty” after 3 substantiated complaints that was not aligned with current rules. This filing came as a shock to all of us in the industry and caused a mild panic. Immediately, a core group of attorneys, owners, builders, developers, appraisers and Realtors formed to analyze the proposed legislation and to give the greater real estate industry a central place to game plan and influence potential outcomes. This group is comprised of the best and brightest in their respective fields.
One of our early tasks was to coalesce support by engaging and educating the affected local industry associations and their membership. This included but was not limited to GNR, WCAR, HBAMT, NASTRA, and AI. This is likely when you first heard about the Bill and its negative effects on our industry. We used feedback from these meetings and conversations to engage Council Member Allen in multiple small meetings on May 24th, June 4th and June 17th. It was during these small meetings that we confirmed her strategy, cemented her talking points and learned how to influence future versions of the Bill.
The next step was to engage Council Member Allen in an open forum with a list of carefully prepared questions. This occurs on June 27th with just over 250 members of the community participating. This forum lasted over 2 hours and created a public record from which to work (Watch Full Video of Meeting). It was during this period that Council Member Allen introduced a substitute Bill that among other things included a deferred start date and gave all existing RM NOO STR permit holders the right to transfer permits in perpetuity. As predicted, this set up a shockwave throughout Council and especially agitated the original BL2017-608 authors. While not a perfect substitute Bill, we began to significantly alter the 2 cornerstones of Council Member Allen’s original Bill.
The next more public step was to get members of the community to attend the July 2nd Nashville Metro Council meeting and to speak out against the Bill during the public hearing. We initially thought it might be difficult to convince the community to attend and speak, but more than 50 individuals from all walks of life spoke passionately against the Bill. There were several goals for this evening, but a major one was to attempt to stall the Council vote. It was during this Council meeting that Council Member Allen’s substitute Bill was adopted with a majority of members supporting. Immediately following the substitute Bill vote, and as predicted by our legal team, the Council voted to defer the vote on the newly substituted Bill. Start watching Council meeting video at 1:01:23
Using this newly minted public platform, the group increased its meetings with other Council Members. I don’t want to reveal the specific content of those meetings, but our goal was to influence certain members into taking predictable actions prior to the next Council meeting. These meetings were successful.
On July 16th the Metro Council met again, this time with a large group of yellow shirts in the gallery emblazoned with “Property Rights” on the front. Our efforts to delay the vote were again successful as you can see starting at 1:45:08
Our core group met and spoke regularly after July 16th and game planned 8-10 probable outcomes. We knew that we would not be able to defer the vote another Council meeting and decided to let several key Council Members puts their cards on the table. We went silent several days prior to the August 6th Metro Council meeting to gauge our progress to date. This was a highly entertaining meeting full of amazing Council Member debate, indecision, anger, confusion and subterfuge. When the dust settled, the substitute Bill was amended to limit the number of transfers to 2, but left the rest of the Bill intact. This was better than we hoped for and, more importantly, we finally saw all of the cards on the table. Of course, the yellow shirts were there watching too. Watch Council meeting video starting at 6:01:59
With the clarity of the now substituted and amended Bill, the group met and spoke nearly constantly between August 7th and the August 20th Council meeting. We identified 5 potential outcomes: 3 outcomes that were good for us, 1 mediocre (Council punting to the next session) and only 1 that was bad (reducing Council Member Allen’s Bill as substituted and amended to 1 or 0 transfer). We ranked the outcomes, game planned the next steps and lobbied to ensure the STR marketplace would be protected. Quite a few actions were taken during this time by members of the group as well as by strategic partners (politics sometimes makes for strange bedfellows). As predicted, there were several amendments filed for consideration last as well as 2 substitute Bills, one of which turned out to be a very welcome surprise. The surprising substitute Bill came from the original authors of BL2017-608 Henderson, Hagar and Johnson. In their substitute, we were surprised to see them wipe away all of the filing requirements and milestone hurdles of Council Member Allen’s original Bill. We were then shocked to see their delayed start date of Jan 2022, 2 years and 4 months from now. As anticipated, their substitute included no new permits or transfers in RM zoning past the effective date. We now had another potential outcome that was better than 1 of the 3 previously identified positive outcomes prior to the release of late filed amendments (we received a copy on Monday August 19th at 11:17am).
During the August 20th Council meeting, the body skipped consideration of the amendments and began deliberation on the Henderson/Hagar/Johnson substitute Bill first. This came as a surprise, but we were all very interested to see if Council could stumble their way into passing this new substitute Bill. The substitute Bill sponsors laid out their typical points and were bolstered by unwitting accomplice Council Member Sledge. With only one Council Member standing up in opposition, they moved to take the vote and the new substitute Bill passed 25 to 5 with 2 abstentions and 7 not voting. Start watching Council meeting video at 1:59:53
Conclusion and Next Steps for RM Zoning
Now that we have completed our work with BL2019-1633 and the Nashville Metro Council, we can now move on to the second phase of our plan. As much as I’d like to share that plan, we cannot risk outlining in a public forum. I am happy to discuss with you individually (as long as you pinky swear to extreme secrecy) so you can understand where we are heading and how we plan on resolving the NOO STRP issue in RM zoning once and for all. I can say this: at the beginning of this process, a delayed start date was an extremely important goal for the group. We had hoped to move Council Member Allen’s proposed October 31, 2019 start date back 6-9 months. We never allowed ourselves to dream that we’d get 28 months!
If you’ve read all the way to this point, you understand the importance of working with a real estate professional who is entrenched in not only the marketplace, but also the politics to protect your investment. Please choose to work with a Realtor who understands what he/she is selling and how to properly guide you. See our complete list of short term rentals for sale in Nashville.