Places like Nashville, Tennessee, should love short-term rental platforms like Airbnb or HomeAway. For one, the city has a booming tourism industry but remains short of enough hotels to meet surging demand. This is why Nashville’s downtown has the highest average nightly hotel rate in the United States — ahead of cities like San Francisco and New York City.
More importantly, economic growth has led to some people struggling to afford the increasing costs of living. Unfortunately, rather than craft laws that embrace innovation and make it easier for both residents and tourists, Nashville’s government has unbelievably placed arbitrary limits on short-term rentals. Now, it is time for the state of Tennessee to step in and curtail Nashville’s war on innovation.
In 2015, Nashville bowed to pressure from special interests in the hotel industry and organized labor by passing an ordinance that restricted people’s ability to rent out their homes. The ordinance mandated a 3 percent cap on the number of non-owner occupied homes in a neighborhood that could receive a short-term rental permit. It also required at least $1 million in liability insurance coverage for renters and forbade homeowners from using signs to advertise their homes.