City Reviews Short Term Rental Permit Process and Compliance Issues

The City Council of Knoxville convened on August 3, 2025, to discuss various topics, with a significant focus on short-term rentals and the associated regulatory framework. The meeting began with an overview of the definitions and types of short-term rental permits, which are categorized into two types: Type 1 permits for owner-occupied properties in residential zones and Type 2 permits for non-owner-occupied properties in nonresidential zones. The current statistics show a near-equal distribution of permits, with 203 Type 1 and 197 Type 2 permits issued in the city.

The discussion highlighted the process for verifying residency for Type 1 permits, which requires applicants to provide documentation such as vehicle registration, a valid driver's license, or voter registration. The city has contracted with Host Compliance to monitor short-term rental platforms like Airbnb and VRBO, ensuring compliance with permit regulations. The monitoring process includes issuing notifications to noncompliant properties, with citations issued if compliance is not achieved after three notifications. Since January 2024, no citations have been issued, although several notices have been sent out.

Councilwoman Fugate raised concerns about the verification process for permits, particularly regarding the potential for properties to be sold to investors who may not reside there. In response, it was clarified that permits require annual renewal, during which applicants must resubmit documentation proving residency. This renewal process was implemented following requests from the council to address community concerns about compliance.

The council also discussed the complaint process for short-term rentals, emphasizing the importance of community engagement in reporting issues. A 24/7 hotline is available for residents to report complaints, which are then investigated by city staff. Council member Thomas shared a past incident to underscore the necessity of enforcing owner-occupied requirements in residential zones, indicating that such enforcement is crucial for maintaining neighborhood integrity.

In conclusion, the meeting underscored the city's commitment to regulating short-term rentals effectively while addressing community concerns. The council plans to continue monitoring the situation and may consider further adjustments to the regulatory framework as needed.