Lexington’s Short-Term Rental loopholes spark concern amid New York City’s crackdown

LEXINGTON, Ky. — As New York City takes a hard line on short-term rentals, tightening regulations to combat a housing shortage, Lexington’s more lenient approach is raising concerns among local residents. The contrasting policies underscore the complexities cities face in regulating this modern form of accommodation.

New York City’s Stricter Measures

Earlier this month, New York City began enforcing new regulations that include a $5,000 fine for repeat offenders, a requirement for hosts to be present during the stay, and a maximum occupancy of two guests. The city’s move aims to address a housing shortage exacerbated by short-term rentals. Despite legal challenges from Airbnb and other stakeholders, New York City succeeded in implementing its new rules.

Lexington’s Loopholes

In contrast, Lexington’s recent short-term rental ordinance has loopholes that are causing concern among local neighborhood associations. According to city sources, one loophole allows a property to be classified as a “hosted” short-term rental if the owner, a management company representative, or an “agent” approved by the owner lives in the property. This classification allows the property to bypass a conditional use permit and public hearing, effectively legalizing the short-term rental without community input.

Walt Gaffield, President of the Fayette County Neighborhood Council, Inc., explained that the loophole could lead to a situation where an STR is legal without a hearing with the Board of Adjustment. “If an owner says he/she has a host, the LFUCG [Lexington-Fayette Urban County Government] needs to figure out how to enforce that if he/she doesn’t,” Gaffield said.

A Case Study in Loopholes

In one Lexington neighborhood, a corporation recently purchased a house and listed it on Airbnb for over $450 per night. The property was classified as a ‘hosted’ rental, thereby avoiding the conditional use permit and public hearing process. The property owner, who has multiple Airbnb listings, was vague about whether he would actually be present during guest stays. This has led to skepticism among local residents about the property being a genuine ‘hosted’ rental.

Gaffield suggests that concerned residents should reach out to the Urban County Council to correct the problem. Council Members James Brown and Liz Sheehan have indicated that the Council could address issues with the ordinance at a later date.

As Lexington grapples with its own short-term rental policies, the city could learn from New York City’s more stringent approach. The loopholes in Lexington’s current ordinance could have long-term implications for housing availability and community dynamics, making it crucial for local governments to carefully consider the impact of their regulations.

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