This house on Rubel Avenue was recently approved for a conditional use permit to operate as a non-owner-occupied short-term rental. | Photo by Caitlin Bowling

Updated with comment from Karen Williams, Councilman Brandon Coan and Councilman David James.

Council members Brandon Coan, Bill Hollander and David James have filed an ordinance that, if passed, would place a three-month moratorium on conditional use permits for short-term rentals that are not the owner’s primary residence.

The moratorium would coincide with efforts to revise the city’s short-term rental ordinance. The earliest it will go before the full Metro Council is Dec. 13.

“There has been considerable concern about short-term rentals that are not the primary residence of the person renting the place. While we are looking at those rules, we thought it would be good to stop that process,” said Hollander, D-9. “The concerns that I have heard primarily have been about short-term rentals that are not the primary residence. … These are effectively businesses being located in residential neighborhoods.”

The hope is that the Metro Council would approve changes to the short-term rental ordinance before the moratorium ended, he said.

Coan, D-8, said Wednesday afternoon that the moratorium would prevent a “flood” of conditional use permits application and pre-applications for short-term rentals, given that city regulation regarding non-owner-occupied short-term rentals could change.

Jonathan Klunk, chief executive of the short-term rental ownership and management company Key Source Properties, said in an email that he’s “in favor of offering breathing room for the city to constructively create common sense laws” for short-term rentals. But, he added, that he’d hope that the applications already moving through the permitting process would be allowed to continue.

That is not traditionally how moratoriums work, however.

Councilman Bill Hollander, D-9

Hollander told Insider that he would like the revised short-term rental ordinance to prohibit non-owner-occupied short-term rentals in residential areas in the future because of concerns he’s heard. Those that already are approved would be grandfathered in.

“If that is not something we would do in the future, why would we want to have more grandfathered?” Hollander said.

Coan, though, wasn’t as certain that prohibiting them was the right answer.

“I am still really thinking through that,” he said. “A blanket rule like that doesn’t allow for any nuance.”

The problem isn’t necessarily with non-owner-occupied short-term rentals that have gone through the proper legal channels, so much as those operating illegally, Coan stated, adding that it’s “hard to draw a red line that works.”

In an email, Klunk said the prohibition of non-owner-occupied short-term rentals (STRs) in residential zones would be a “huge mistake.”

“In my opinion, that is an easy and shortsighted approach to regulation. Our city is not about banning activities like short-term rentals or limiting the property rights of individual homeowners. STRs are still a buzzword, and we are seeing a lot of new activity because of it,” he said.

“However,” Klunk added, “that will taper off, and the market will self-regulate, leading to a lowered number of properties being offered as STRs on the market. Again, common sense rules can help safeguard against sprawling and uncontrolled growth. But sweeping and permanent changes of this nature are not the answer.”

Karen Williams, president and CEO of Louisville Tourism, did not weigh in on the current regulations or proposed revisions.

“Louisville’s visitors like having lodging options, and Louisville Tourism will continue to market and promote all the options available including short-term rentals. Regulations of lodging are outside of the agency’s scope,” she said.

Councilman James, D-6, said the feedback he’s heard from constituents has run the gamut.

“There are some that want absolutely no rules at all, and some that don’t want Airbnbs at all,” James said, referring to the most popular short-term rental website. “It’s really just a big spectrum.”

Insider previously reported that the majority of non-owner-occupied short-term rentals are located in the Highlands, part of Coan’s district, and Old Louisville, part of James’ district. As of Nov. 28, the Board of Zoning Adjustment had approved 71 conditional use permits to allow people to rent properties that are not their primary residence. (See map below. Blue are approved conditional use permits, and purple are those actively seeking a permit.)

Coan worked with Develop Louisville to draft proposed changes, including expanding where short-term rentals can operate, eliminating the initial registration fee, altering the penalties for those operating without registering with the city and capping the number of short-term rental occupants at 10.

The city has already collected hundreds of comments submitted online by residents, which included what Coan called “one of the best ideas” — requiring online short-term rental postings to display their city-issued registration number as a way to improve enforcement of illegal rentals.

The Planning Commission is hosting a public hearing to allow for additional feedback about the proposed changes at 1 p.m. on Dec. 6 in the old jail, 514 W. Liberty St.

Caitlin Bowling
Louisville native Caitlin Bowling has covered the local restaurant and retail scene since 2014. After graduating from the Ohio University’s E.W. Scripps School of Journalism, Caitlin got her start at a newspaper in the mountains of North Carolina where she won multiple state awards for her reporting. Since returning to Louisville, she’s written for Business First and Insider Louisville, winning awards for health and business reporting and becoming a go-to source for business news. In addition to restaurants and retail business, Caitlin covers real estate, economic development and tourism. Email Caitlin at [email protected]