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Chattanooga City Council passes short term vacation rental reform

From Local 3 News: Chattanooga City Council members passed the short term vacation rental (STVR) reform on Tuesday.   The legislation s

From Local 3 News: Chattanooga City Council members passed the short term vacation rental (STVR) reform on Tuesday.


The legislation simplifies compliance, increases fines for violations, and protects Chattanooga’s residential zones from overtly commercial activity.


The new law will limit new STVRs in residential areas, while allowing them in any commercial district where it is already legal to build a hotel.

Chattanooga Mayor Tim Kelly said the new proposal will welcome people to the Scenic City, but also protect those who currently live here.


“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 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.”


Currently permitted STVRs will be allowed to be grandfathered in, the city said, with permits that may be renewed annually and property permits may be transferred between owners.


Operators of STVRs in which the homeowner lives full-time in the home, or homestays, will be allowed in both commercial zones that allow hotels and any residential zone in the existing short-term vacation rental overlay. Absentee STVRs will also be allowed in any commercial district that allows a hotel, but they will not be permitted in a residential zone.

The new rules require that a local contact be available at all times by phone, who will be capable of arriving to the rentals within two hours, if needed.


The rules provide that any property rezoned from residential to commercial will face a cooling-off period of 18 months before an applicant may apply for a STVR permit.


Violations of any STVR rules will go before an administrative hearing officer, who can charge up to $500 per day for violations of the new ordinance.


Zones that allow absentee STVR permits:

  • C-2
  • C-3
  • C-4
  • C-5
  • UGC
  • CC
  • IX
  • RF
  • RV
  • CX
  • SH


Zones that allow homestays:

  • All of the above, plus any residence within the STVR overlay