Airbnb

Airbnb made quite a bit of news yesterday when a New York City Judge ruled that transient occupation of an apartment or condominium is illegal under the city’s condominium laws. Several other charges were brought, including a zoning violation, but because ostensibly one of the uses permitted in the district included transient residency, those other charges were dismissed.

Airbnb is an Internet company that enables rental of various residential housing to guests who are traveling in the area. In essence, the traveler uses the Airbnb website to find temporary housing in the city that he or she will be visiting. There is a brief description of the unit, together with the price, and if it appeals to the traveler, s/he can arrange to rent the unit and pay Airbnb, who takes out its fee, and then pays the owner of the unit.

The difficulty with this arrangement is that most cities have zoning regulations which preclude short-term residential occupancy in most residential districts. So if the zoning district allows apartments, condominiums, single family residences and so forth, there is a pretty good chance that it precludes residential occupancy on a less than 30 day basis.

As a result, it may very well be that this arrangement for housing rentals is illegal in many cities across the country.

Here’s the court’s decision.

In Tennessee, we've already seen one example of this type of case.In Wade v Patterson, a homeowner in Hamilton County was doing just about the same thing. He advertised his home for short-term occupancy on the Internet and elsewhere, and would lease the home to visitors to the Chattanooga area for periods of less than 30 days. He was charged with violation of the local zoning regulations,and the trial court concluded that he was in fact in violation of the zoning provisions. However, on appeal to the Tennessee Court of Appeals, the trial court was reversed. Although the court found that there was a specific land use "tourist home," which provided for this use, the local legislative body had never zoned any property in the county for that particular use. As a result, applying the well-known zoning rule of construction, that any ambiguity is resolved in favor of the property owner, the court concluded that the local legislative body had intended to allow this type of activity, but having failed to specify exactly where that would be permitted, the property owner did not have to pick and choose and guess about it. As a result, the court concluded that the regulations were unconstitutionally vague and reversed the decision of the trial court.

The interesting question here is how many of the local governmental zoning regulations in middle Tennessee have the same failing? In a quick review of the Metro Zoning Ordinance, it wasn't entirely clear to me how this difficulty is handled. Under the terms of its predecessor, COMZO, adopted in 1974 and repealed in 1998, there were express provisions for transient occupancy prohibiting such uses in residential districts. Although Metro does have provisions for hotels and motels, I assume the same would've been true in Hamilton County; those uses are it would seem quite dissimilar. In any event, cases such as Wade v Patterson make it clear that local regulations should carefully be drawn to address and resolve this kind of issue.