For most property owners in Louisville, registering a short-term rental with the city costs $25, and they can submit an application and fee online.
For residents of the Old Louisville and Limerick neighborhoods, however, the process is more involved. To rent a property within those boundaries, the owner must apply for a conditional use permit before listing it on Airbnb or another short-term rental website.
To obtain a conditional use permit, they also must file a preliminary application with Planning and Design Services and hold a meeting with neighbors to inform them that they plan to rent their home before filing a formal application and going before the Board of Zoning Adjustment for a public hearing and approval. The process, shown below, can take a month and half to complete.
What’s more, a conditional use permit costs $1,000 in addition to the $25 registration fee.
However, the Planning Commission on Thursday approved a temporary fee reduction that will slash the cost of a conditional use permit to $215. The reduced rate is only valid through Oct. 29; residents will be able to pay the reduced amount as long as they have filed a pre-application before that date.
“What we are trying to do is try to incentivize people to come forward and register,” said Emily Liu, director of Louisville Metro Planning and Design Services. She added that even if people only rent their homes for one day, they need to register with the city.
Liu noted that only 25 people have registered as short-term renters with the city, yet Airbnb recently issued information stating that 1,200 people rented their home through Airbnb’s website during fiscal year 2016.
“That’s just Airbnb,” she said.
Planning Commission chairman Donnie Blake said he hopes the fee reduction prompts Old Louisville and Limerick residents to go through the one-time conditional use permit process. Blake called the $1,000 fee “a huge encumbrance.”
Still, commission members expressed concerns that some short-term rental hosts would rather chance getting caught over registering their short-term rental and paying the 8.5 percent room tax rate to the city. Airbnb is currently working with the city to set up a process in which the company would collect and remit the taxes on behalf of Louisville hosts.
If someone is caught renting without registering with the city, he or she will receive a warning for the first offense. The second offense will cost up to $500.
The city will start enforcing the short-term rental ordinance on Nov. 1, said planning manager Joe Haberman. Enforcement will be complaint based, he said. Planning and Design Services already has received more than 50 complaints from people who suspect that their neighbors are renting their homes illegally, or without registering with the city.
Planning and Design Services staff wanted to make it clear to residents that the vast majority of people will not have to go through the conditional use permit process, and residents can check with staff at (502) 574-4860 if they have questions about the application process.