What started as a simple request from Dan and Grace Dykstra to rezone their property for a vacation rental home in North Chattanooga has prompted a citywide discussion about zoning laws that some say need to be updated to avoid squelching a booming source of tourism and tax dollars.
Chattanooga has traditionally taken a conservative approach and limited where homeowners can rent out a room or the entire house on a short-term basis. But with a growing number of homeowners offering their homes for vacation rentals along with alternative options like couchsurfing — allowing someone to rent a couch — city officials say it’s time for the city to explore new laws.
Other communities have offered these kind of options for decades. Tourists can rent a lake house in Ellijay, Ga., or a beach house on the coast of Florida or a cabin in Pigeon Forge next to the Smoky Mountains. And Chattanooga has positioned itself as a booming tourism spot, attracting national events like the Ironman, USA Pro Cycling championships and Head of the Hooch along with Riverbend, the Tennessee Aquarium and the region’s natural assets.
“It’s something the city needs to change, and if we need a new zoning code that’s fine,” said Councilman Larry Grohn. It needs to happen, “if we’re advertising ourselves as tourist-friendly.”
Currently, Chattanooga restricts temporary rentals to R3 or R4 zones, which typically include a mix of apartments, single-family homes, day-cares and offices. Most single-family neighborhoods are zoned R1, and there the practice is forbidden.
But on a popular vacation rental website called vrbo.com, more than 100 homes are listed within Chattanooga, from exposed brick lofts downtown to spacious lake houses. And zoning officials said most of those homes are likely in R1 zones.
On Tuesday, the City Council will discuss whether the Chattanooga-Hamilton County Regional Planning Agency should study how to expand the options for short-term rentals, possibly opening the door to a market that has the potential to double, City Council members estimate.
Yet the issue is more complicated than that, zoning officials say.
The Dykstras bought a home on Sylvan Street in February to remodel and then market as the perfect getaway spot close to downtown Chattanooga. But the couple was surprised when they were met with opposition by the planning agency staff, who recommended that their request to rezone their property be denied.
John Bridger, RPA’s executive director, said the staff disagreed with the request because it opened the door for the entire block to be rezoned, which could mean apartment complexes or other mixed-use spaces in that area. The Dykstras agreed to a special restriction to use their home only for short-term rentals or a single- family home, he said, limiting their options.
Councilwoman Carol Berz said if the city is going to allow more short-term rentals, what’s needed is a fair across-the-board fix and not officials arbitrarily deciding who gets to rezone their side of the street.
“It borders on discrimination,” she said. “You’ve got to craft a law that makes sense with the environment of the city.”
If the City Council asks the RPA to study how to expand vacation rentals, Bridger estimates it will take his staff three to six months to study other cities, hold public discussion and find a way to regulate the industry.
Short-term vacation homes can present other problems like loud noise, blocking neighbors’ parking and late-night parties in quiet neighborhoods.
Already the city doesn’t enforce current zoning laws unless there’s a complaint, said Gary Hilbert, Chattanooga’s director of land development, whose office is in charge of code enforcement. A citation typically carries a $50 fine.
In East Brainerd, Shirley Trotter, president of the Hickory Creek Townhomes Association, said their homeowner bylaws restrict people from renting out their homes. She said she would particularly object to short-term rentals, which present a host of problems.
But those concerns don’t have to exist, said Jo Beth Kavanaugh, whose business is renting out homes downtown to tourists.
Kavanaugh said she only rents in areas that allow the practice, and she said her strict rules — no smoking, late-night parties or events and limited number of guests — eliminates any concerns in the neighborhood.
“If people do it the right way it’s a really good thing for all the neighborhoods,” she said. “People are exposed to downtown. A lot of tourists get options. It’s connected to the university, to hospitals and schools. Then they want to come back and invest and live.”
Then there’s the matter of money.
As long as people are illegally renting property, the city and county are losing hotel-motel tax revenue, said Hamilton County Commissioner Joe Graham.
“It’s a golden opportunity,” he said. “A lot of people come to visit with a family, they want to bring their dog … they’d rather rent a house.”
As for the Dykstras, the City Council decided to vote in favor of rezoning their side of the street. The couple is still painting the outside of the house, renovating the kitchen and remodeling to market their vacation rental home by this summer.
“The neighborhood response has been positive,” Dan Dykstra said. “For what we’re charging we’ll be able to weed out somebody who will be a nuisance. I’m the last person who wants something like that.”
Contact staff writer Joy Lukachick at [email protected] or 423-757-6659.