City of Atlanta leaders spent years debating how to regulate the burgeoning short-term rental industry, which allows visitors to book rooms, apartments or entire houses through platforms like Airbnb and VRBO.
After approving a set of rules last March that require vacation listings in Atlanta to have a permit, city officials spent about a year preparing for the regulations to go into effect.
But in the first two months since owners have been able to apply for permits, only about 10% of the city’s available listings did so — and less than 3% have received one, according to an Atlanta Journal-Constitution analysis of city permitting data.
AirDNA, a data analytics site that tracks the industry, estimates there were roughly 7,100 Atlanta listings on Airbnb and VRBO available in February 2022. As of Thursday afternoon, just over 700 permit applications had been submitted to the city; about 130 were approved; 8 were denied; and 90 required revisions.
The AJC analysis shows those properties are most heavily clustered on the Westside around the Atlanta University Center and West End. There also are heavy concentrations near Midtown and the Beltline in northeast Atlanta.
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“The process has been very slow,” Janide Sidifall, the city’s interim planning commissioner, acknowledged during a presentation to City Council on Tuesday.
Enforcement of the new ordinance was set to begin Friday, sparking worry among some short-term rental owners who have described the permitting process as clunky and onerous. But the city pushed back the enforcement date to May 2 amid calls for clarity on the rules.
The City Council is considering a delay of any punitive action until June. And officials could take further steps to alter the ordinance, which was passed last year in an effort to collect additional tax revenue, maintain a set of rules for the industry and crack down on unruly “party houses” that sparked nuisance complaints from neighbors.
To get a permit, owners are required to submit copies of the deed to their property and a utility bill, pay $150 and send certified letters to their neighbors letting them know they plan to list the unit. The rentals are taxed at the same 8% rate as hotels, with owners subject to $500 for violations.
One reason for the low application numbers: The new regulation bars non-Atlanta residents from being permitted for a rental in the city, and there is a limit of only one unit in addition to the owners’ “primary residence” for those who do live in Atlanta.
“This has a sweeping effect on a lot of people who spend a lot of money investing in (their) businesses,” said Kathie McClure, who is vice president of the Atlanta Metro Short Term Rental Alliance, a relatively new advocacy group made up of over 200 short-term rental hosts.
Credit: Jenn Finch
Credit: Jenn Finch
McClure runs what she calls a “mom-and-pop” Airbnb operation with her husband: Two units in a duplex in Piedmont Heights, one neighborhood over from where she lives.
The McClures’ permit applications for the duplex now face rejection, since, according to the city’s interpretation, the couple is only allowed to rent one other unit that isn’t their home.
“I don’t see how it’s going to be possible for businesses to operate a ton of short-term rental units under this ordinance,” said Elijah Davis, a local attorney who reviewed the regulation. “It is absolutely aimed at having owner-occupied residents being able to use their property.”
Atlanta’s short-term rental market has become a major sector of the local tourism economy as Airbnb stays have become increasingly popular among tourists, people in town on business and members of the film and TV production industry.
Property owners and investors have benefited, too: Across metro Atlanta, Airbnb was a source of income for over 9,500 hosts in 2021, the company said, adding that half a million people stayed at Airbnbs in the region in the first nine months of 2021.
Last year, some officials and neighborhood leaders pushed for a stricter crackdown of the industry by proposing the city limit the number of days properties can be listed, or ban them outright. The regulations passed last year are aimed at preventing absentee property owners and the operation of “party houses,” though Airbnb has taken steps in recent years to remove listings that receive noise and nuisance complaints.
Councilman Antonio Lewis, who represents a Southside district, supports the new rules, which were sponsored on the council last year by now-Mayor Andre Dickens. He doesn’t want to see too many properties that could be used for long-term housing instead become filled with expensive short-term rentals.
“I’m trying to stop the city from becoming a de facto hotel city,” Lewis said.
According to AirDNA, over half the listings in the city are hosted by people who also manage at least one other short-term rental. Roughly one-fifth of the listings are managed by people who take care of six or more properties.
Those whose sole income is generated from owning and managing several short-term rentals now worry that model is in jeopardy.
“Essentially, this is our full-time business,” said Rich Munroe, the president of McClure’s group, who owns and manages a total of 30 short-term rentals. “The fact that we are completely shut out of this ordinance is definitely of concern.”
AMSTRA is hoping the city will allow existing listings to continue operating by grandfathering them in.
Another quirk in the rules: Owners are required to get a license for their “primary residence” as a vacation rental, even if they only plan to rent out a second unit. McClure, for example, had to get a permit for her home, though she is only trying to rent out the separate duplex she and her husband own.
“This is a needless expense that we’re working to change,” Councilman Amir Farokhi wrote in a newsletter to constituents Wednesday.
Enforcement of the ordinance, which falls to Atlanta police and the chief operating officer, will be complaint-driven, said Gregory Pace, the city’s Office of Buildings director. Investigators won’t be able to proactively identify listings that lack a permit.
“We currently do not have the capabilities to comb each one of the websites, the platforms that host the short-term rentals,” Pace said.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
