A spacious, four-bedroom home in the Highlands, marketed as an executive rental or for families | Courtesy of Key Source Properties

Amid the growing popularity of short-term rental sites such as Airbnb and Vacation Rental by Owner, Develop Louisville staff will present possible changes to the city’s year-old short-term rental ordinance to the Planning Commission following a public feedback period.

“Tourism is flourishing in our city, and in addition to the number of hotels opening, we are also seeing a growth in the use of short-term rentals, which allow visitors a unique way to experience our beautiful neighborhoods and vibrant commercial corridors,” said Jeff O’Brien, director of Develop Louisville, in a news release. “When welcoming this new form of the shared economy, we must also make sure that short-term rentals and their occupants harmonize with neighbors, and these proposed changes to our ordinance will help us better achieve that.”

Develop Louisville, along with tourism entity Louisville Tourism and Metro Councilman Brandon Coan, D-8, have developed the below changes:

  • Capping the maximum number of individuals allowed to stay in a short-term rental at one time to 10. The change would not alter the existing ordinance rule that limits occupancy to two people per bedroom, plus two.
  • Allowing short-term rentals in certain properties zoned EZ-1, a specialized zoning where industrial, residential and commercial developments are permitted. A map provided by Louisville Metro highlights those properties.
  • Requiring an emergency contact that lives in Jefferson County. The current ordinance requires an emergency contact but the person doesn’t have to live in Louisville.
  • Eliminating the initial $25 fee to register a short-term rental with the city. Renters would still have to pay $25 annually to renew their permit.
  • Prohibit people from advertising their unregistered short-term rental. The penalty includes a notice of violation for the first offense and a $50 fine for each day that the advertisement remains posted.
  • Instituting a new fine of $50 for first-time offenders who rent their property without a permit. The fine for a second offense would drop from $500 to $250, and a third offense would result in a $500 fine, down from $1,000. Additional offenses after that would result in a $750 penalty.

“Short-term rentals are good for our city, but these changes are needed to upstream and toughen enforcement against illegal operators,” Coan said in the release. “Neighbors deserve these additional protections, and they will serve all legal operators well.”

Short-term rentals are currently allowed in properties zoned R-E, R-2 or U-N, where the building serves as the owner’s primary residence. If a property with those zoning designations is not the owner’s primary residence, then they must apply for a conditional use permit from the city, a lengthier and more expensive process.

Office and commercial properties with OR, C-N, C-R, C-1, PTD and other zoning designations only require a short-term rental permit, whether or not someone lives there full time or not. Residents and property owners in the Old Louisville-Limerick Traditional Neighborhood Zoning district must apply for a conditional use permit to rent their house no matter what.

The city will gather feedback about the proposed changes online before presenting them to the Planning Commission. If approved by the commission, then the changes will go before Metro Council for a final vote.

There is no timeline currently for when the resident feedback period would end and the changes will go before the Planning Commission.