Lexington Debates Stricter Regulations on Short-Term Rentals Amidst Housing Crisis

LEXINGTON, Ky. — The Urban County Council in Lexington will meet Tuesday to ponder the future of the city’s growing short-term rental market, which, some say, is exacerbating an already tenuous housing crisis. The proposed ordinance could change how platforms like Airbnb and VRBO operate within city limits.

The Council convenes in Council Chambers at 3 p.m. on Tuesday for a work session that will include discussion on an ordinance that, if passed, would regulate the short-term rental market. The Fayette County Neighborhood Council (FCNC), an advocacy group that has been vocal about this issue, has called for the ordinance to be sent back to the committee for revisions.

Walt Gaffield, President of the FCNC, stated that the organization’s goal has been to “mitigate the negative impact of short-term rentals” and to “facilitate enforcement of standards that protect neighborhoods and the public.”

The FCNC is particularly concerned about several aspects of the ordinance. One such issue is the allowance for existing short-term rentals with an occupancy of fewer than twelve to increase occupancy up to that number without notice or a hearing. Critics argue this could disproportionately affect urban neighborhoods that already have a high concentration of short-term rentals.

Another concern is the impact of short-term rentals on community cohesion. The FCNC argues that in Lexington’s diverse neighborhoods, long-term renters and homeowners collaborate and interact socially to improve their community, a dynamic that diminishes as short-term rentals increase.

Furthermore, the FCNC believes that encouraging short-term rental properties could exacerbate Lexington’s housing crisis by removing long-term rental and owner-occupied properties from the market.

The FCNC also calls for a strict standard on short-term rental density, akin to Louisville’s ordinance that prevents short-term rentals from being within 600 feet of each other.

Additionally, the FCNC has raised questions about the clarity of how nuisance complaints would affect licensing and has called for a new system to collect citizen complaints.

Lexington currently has over 1,000 short-term rentals, according to an FCNC communication. A representative from a short-term rental management company stated that there are 1,400 short-term rentals across all platforms. The FCNC has voiced concerns that increasing occupancy maximums will make these rentals more profitable, thus incentivizing real estate investors and landlords to convert more properties into short-term rentals.

Gaffield, in a letter to the Council, emphasized that cities nationwide continue to face significant issues with short-term rentals, particularly when they are large, unhosted, and lack enforceable standards.

The Council has the option to send the ordinance back to a committee, amend it, or pass it as written. The FCNC firmly believes that improvements are necessary before final passage.

As Lexington faces an increasingly challenging housing landscape, the decisions made by the Urban County Council could shape the future of both short-term rentals and long-term housing in the city. The FCNC and other concerned citizens will be closely monitoring developments.

With Lexington at a crossroads, community voices like the FCNC are amplifying the urgent call for balance between fostering tourism and preserving the fabric of their neighborhoods.

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