Other cities and states trying to crush the upstart should pay attention.
Rachel and P. J. Anderson live with their two children in Germantown, a neighborhood just outside of Nashville. P. J., a musician, often brings his family along while traveling. Like many Nashville residents, the Andersons rent out their home through Airbnb, an online marketplace and homestay network, to supplement their income while traveling. Unfortunately, the Metropolitan Council (the legislative body in Nashville and in Davidson County) implemented strict regulations that were a burden to families such as the Andersons. The rules, for instance, set an arbitrary cap on the number of households that can obtain short-term rental permits. Friday’s court decision, however, was a win for the Andersons and other Airbnb users: It rightfully recognized the rights of property owners.
Circuit judge Kelvin Jones ruled in favor of the Andersons in a lawsuit that the Beacon Center, a free-market think tank, filed last year on the Anderson’s behalf. Jones concluded that Metro Council’s ordinance is unconstitutional. Specifically, Jones held that the definition of a “short-term rental property” was ambiguous: “An ordinary person of average intelligence would not be able to understand the distinctions between [short-term rental], hotels, bed and breakfasts, boarding houses, hostels, et cetera,” he wrote. In doing so, he “delivered a big victory for property rights,” Braden Boucek, director of litigation for the Beacon Center, tells National Review Online.
The ordinance in question had provided strict guidelines for renters (such as by limiting the number of guests who could be hosted), and required Airbnbers to pay hotel taxes as if they were in the hostelry business full time. The regulations had disastrously blurred the line between hotels and short-term rental properties. “Are P. J. and Rachel running a hotel or aren’t they?” the Beacon Center analysts ask at the think tank’s website. “The way the ordinance is written, no one could know.”
Furthermore, Metro Council’s ordinance had categorized short-term rentals by doling out owner-occupied rental permits and non-owner-occupied rental permits, which sought to identify whether the property owner lived in his or her home full time while renting. The classification allowed Metro Council to cap the number of non-owner-occupied rentals in a census tract at 3 percent. This categorization is ineffective, though, since even homes with owner-occupied permits only have to be “generally present during the rental,” a phrase that is as ambiguous as the ordinance itself.
Worst of all, Metro Council had implemented the ordinance long before city officials had worked out how to enforce it. Although it has been a year and a half since Metro Council passed the ordinance, key local officials had not been brought on board by the time Kelvin Jones issued his ruling Friday. Nashville’s police department have strongly opposed giving police officers the tedious task of Airbnb rules enforcement, and Nashville’s mayor Megan Barry had yet to decide which department was best suited for the duty.
Striking an impressively hyperbolic tone, at-large councilman Bob Mendes argued that Jones’s ruling “sort of pushes us toward having no regulations or outlawing them completely.” But, as the Beacon Center explains at its website, all regulations must be comprehensible, must treat citizens equally, and must recognize free speech and property rights. “We are fine with smart regulations on Airbnb that make it so the cities can take action against incidences where these properties become loud or nuisances for neighborhoods,” Boucek says. “We think you can do that without needlessly burning the property rights of all Tennesseans.”
The ordinance in question required Airbnbers to pay hotel taxes as if they were in the hostelry business full time.
Though Beacon Center’s court victory has forced Nashville to recognize the property rights of home owners, there is a long way yet to go in other parts of the country. On the same day as Jones’s ruling, New York governor Andrew Cuomo tightened the reins on property owners in New York City, signing a bill that penalizes New York City property owners up to $7,500 if they rent their home on Airbnb for fewer than 30 days.
Airbnb’s success has moved leftist government officials such as Governor Cuomo and Metro Councilmember Mendes to take aim at the enterprise, tightening regulations on property rights. Meanwhile, Judge Jones took a different course of action; he reevaluated property rights and the government’s onerous regulations — and he recognizing an individual’s core constitutional rights. It’s time for Cuomo et al. to take note.