This house on Rubel Avenue was recently approved for a conditional use permit to operate as a non-owner-occupied short-term rental. | Photo by Caitlin Bowling

Updated with comment from Brandon Coan.

An ordinance that would have placed a moratorium on the approval of most permits for non-owner-occupied short-term rentals for three months failed to pass Metro Council.

The Metro Council called a vote on the proposed moratorium just before 1 a.m. during a meeting that extended into the wee hours of Friday. The ordinance was struck down in a 13-to-11 vote.

“Nearly everyone — on all sides of this issue — agree that we need new rules for short-term rentals, particularly non-owner-occupied businesses located next to Louisvillians in residentially zoned areas. The Council members who represent areas where most of them are located voted for a short time-out while these rules are developed,” one of the ordinance’s sponsors Councilman Bill Hollander, D-9, said in a text message to Insider. “Even though we were unsuccessful, we remain committed to protecting neighborhoods and making sure that our residential housing stock remains available to Louisville residents.”

Councilman Brandon Coan | Photo by Peter Champelli

In an email to Insider, Councilman Brandon Coan, D-8, also a sponsor, called the decision “short-sighted and disappointing.”

“The moratorium was a modest request to preserve the status quo for three months while the Planning Commission and Metro Council grapple with a difficult policy issue,” Coan said. “It is short-sighted and disappointing that Council members least impacted by this issue wouldn’t grant those of us most impacted by it a little time and space to work on a solution.”

The sponsors asked for the moratorium — which only would have affected non-owner-occupied short-term rentals — while the Planning Commission considers what changes it will recommend to the existing regulations regarding all short-term rentals.

One alteration under consideration is banning non-owner-occupied short-term rentals in either single-family residential zones or in all residential districts, as some have argued that they are just tiny hotels and commercial businesses.

“That is a significant policy change,” Coan said during the meeting, referring to the possible ban of non-owner-occupied short-term rentals in some areas.

Since the possible moratorium was announced on Nov. 28, there were 28 pre-applications filed for conditional use permits for non-owner-occupied short-term rentals. With the moratorium voted down, the process will continue normally with property owners able to move through the conditional use permit process.

Councilwoman Julie Denton, R-19, voted against the moratorium. She noted that while there were more pre-applications filed in the past couple of weeks than has been typical, it was likely because property owners were not aware that a moratorium could be proposed.

Councilwoman Julie Denton, R-19

“They wouldn’t have rushed in if they didn’t have the property to rush in,” she said. “They didn’t know that it was a big deal that we were going to halt what they are doing.”

Those who opposed the moratorium have been vocal about changes to the short-term rental regulations that they believe would negatively impact the industry, saying that the city is seeking to punish all short-term renters because of a few bad apples.

Although the Metro Council was split on the moratorium, most seem to agree that the short-term rental regulations need to change.

James Peden, R-23, said the council was too hasty in passing the original regulations in 2016.

“We really built that boat while it was on the water,” he said. “This ordinance needs revision in the worst way.”

Denton agreed that regulations were pushed through.

“There seems to be this rush of so many issues rather than doing a deep-dive,” she said. “Words have consequences.”