Lexington Ranked Top Tourist Destination in Kentucky, but at What Cost to Housing?

Lexington, Ky. – Lexington has recently made it to the top of the list in the Tourism Sentiment Index’s 2023 edition of Leading Places: The 100 Most Loved Destinations Around the World. The ranking puts Lexington in the top 1% of the most-loved destination brands in the world and has been voted by visitors’ experiences, making Lexington the number one tourist destination in the state of Kentucky.

However, the city of Lexington is also facing some significant housing problems. The lack of affordable housing, homelessness, gentrification, a lack of quality rental housing, housing discrimination, and a lack of accessible housing are some of the significant issues the city has been experiencing.

Experts suggest that the tourism industry could be exacerbating some of these issues. With a rise in tourism, there has been an increase in the cost of living, leading to a lack of affordable housing. Tourists are more likely to stay in short-term vacation rentals or Airbnb, which drives up rental prices and reduces the availability of affordable housing for local residents.

Additionally, gentrification, which is a process of urban reinvestment that leads to the displacement of low-income residents, has been on the rise in areas close to downtown, where tourists are more likely to stay.

While the city has been working to address the housing issues, many believe that more needs to be done to ensure that the city’s housing policies are in line with the needs of both residents and tourists.

Mary Quinn Ramer, the President of VisitLex, said that this ranking is the result of hard work done to exceed expectations and provide a high-quality, custom visitor experience. She further added that VisitLEX is working to showcase everything that sets Lexington apart, leveraging investments from the city and state for marketing campaigns to attract meeting and leisure travelers from across the country and the globe, and marketing Lexington’s new crown jewel – the Central Bank Center – and other unique destinations.

However, the tourism industry has not always been favorable to residents, especially when it comes to affordable housing. The city needs to balance its tourism growth with its responsibility to provide affordable housing to its residents. Therefore, the city must come up with innovative solutions to address the housing problems while keeping in mind the impact of the tourism industry.

While the tourism industry brings economic benefits to the city, it is essential to ensure that its growth does not come at the cost of the city’s residents’ welfare. The Lexington-Fayette Urban County Council is currently considering new legislation on Short Term Rentals (STRs) and the proposed ordinance can be found here.

The proposal was first discussed on November 29th, with public input, and was subsequently sent to committee for further review.

The proposed regulations would define STRs as temporary dwelling units for transient guests for up to 30 consecutive days, with no meals served. Hosted and un-hosted STRs would be differentiated, with hosted STRs requiring that the primary resident of the property continues to occupy it during the rental period. All STRs would need to be licensed by the Division of Revenue and adhere to occupancy limits of no more than two individuals per bedroom and four additional individuals.

The proposed regulations would also limit the number of STRs allowed per property and restrict the use of detached accessory structures as STRs. In addition, the regulations would prohibit the use of STRs for private or commercial special events that exceed the maximum occupancy limit.

The proposed ordinance also outlines the requirements for obtaining a special fee license for STRs in Lexington-Fayette County. The Director of the Division of Revenue would be authorized to promulgate necessary forms and procedures for processing the special fee licenses. Licensees would be responsible for payment of occupational license fees on net profits earned from the operation of STRs and ensuring that their properties meet certain safety requirements and contain specific information for guests.

The proposed ordinance would also regulate advertising and enforcement for STRs. Registered STRs would be allowed to advertise on hosting platforms for stays of less than thirty days. Violations of the ordinance would be enforced by citation officers and subject to civil penalties, with each day of violation considered a separate offense. The Director would have the power to deny, revoke, or fail to renew a short-term rental registration, and appeals could be made to the commissioner of finance or the Administrative Hearing Board.

The General Government and Planning Committee will discuss the proposed ordinance again on March 7th at 1 p.m. It’s worth noting that unlike Council meetings, committee meetings do not currently allow for public comment. Documents from the previous meeting are also available online here.

Top photo: A scenic horse barn along Kentucky’s back roads. (Adobe Stock)