A system to license and register short-term home rentals passed Atlanta City Council March 15 after a three-hour debate and a slew of amendments that, among other things, reduced the number of properties one person can rent down to two.

Assuming Mayor Keisha Lance Bottoms approves the ordinance, a burning question is whether the city will license short-term rentals of properties in areas with single-family residential zoning. In some previous controversies about specific properties, city officials have long interpreted existing zoning as banning purely commercial uses in such zones. The question was unanswered in the debate.

City Councilmember Matt Westmoreland said in a text message after the vote that “the short answer is, the paper passed Monday sets the framework for how short-term rentals are regulated. There will need to be an accompanying zoning paper on locations.” He said he expects legislation about short-term rentals in single-family, commercial and industrial zones to be filed before the licensing system is operational.

How licensing works

The newly approved system would allow an owner or long-term tenant of a home to license short-term rentals to an “agent,” who could be themselves or another person or organization. The owner or long-term tenant could get a license for the property that is their “primary address” and one other property. The license would be renewed annually and would come with a $150 fee. 

The Atlanta Police Department would record any code violations at short-term rental properties, which could be subject to a $500 fine. If an agent had three violations for any one property, the city would bar short-term licensing for that property for 12 months. The ordinance defines “short-term” as a rental for up to 30 consecutive days. 

No external signage on the short-term rental is allowed under the ordinance, but information about the license and rules of operation must be posted inside. Operators would have to pay the hotel/motel tax.

Owners of neighboring properties would have to receive notice of a short-term rental license application. Public complaint lines by email and phone would be established for people to report any issues with a short-term rental property. Licenses would not be transferable, and the agent would have to notify the city within 10 days of any change in the agent on a license.

The passage of the ordinance was praised in a written statement from Airbnb, one of the largest short-term rental companies. 

“By passing clear and equitable short-term rental rules, the city of Atlanta is allowing responsible hosts to continue earning crucial income,” said Chloe Myshel Burke, Airbnb’s public policy manager, in the statement. “We are committed to being a long-term partner to the city of Atlanta and look forward to working with local leaders as they implement the law and promoting tourism recovery.”

Council debate

The ordinance passed easily with a 14-1 vote. City Councilmember J.P. Matzigkeit of Buckhead’s District 8 said he voted in favor because of the basic benefits of the licensing system. 

“We really didn’t have any way to regulate or tax short-term rentals,” Matzigkeit said, noting the ordinance “sets up a framework to have people register to get a license, to follow rules that ensure that guests know what the noise ordinance is,” and other benefits. But as for how the system will work in practice, he added, “It remains to be seen. We’ll see how it’s implemented.”

Atlanta City Councilmember J.P. Matzigkeit.

The council’s approval came after extensive legal surgery, with Matzigkeit and several others proposing amendments. One major amendment made quietly over the weekend before the meeting reduced the number of properties one owner or long-term tenant can operate from three to two. 

Several other key changes — including the complaint line, a boost in the fine to $500, and a faster notice about change of agents — were proposed by North Buckhead Councilmember Howard Shook, who ended up as the sole vote against the ordinance anyway.

Shook last year sparked long-stalled talks of regulating short-term rentals with his own paper that seeks to completely ban such rentals in areas zoned for single-family residences. His proposal remains in committee, and he said in an interview that he believes it is as good as dead following the licensing system’s approval.

Several other amendments Shook proposed were declared potentially unconstitutional by the city’s Law Department.  One of the amendments that failed attempted to limit the number of visitors guests could have on the property and impose a curfew that required guests to be inside the property after 11:30 p.m. Another of the amendments, which would have enforced a 1,000 foot limit between short-term rental homes, strayed into zoning territory. 

“I voted against the final piece of legislation because it did nothing to limit the number of people who could be hanging out outside a short-term rental. Now you could have five or you could have 55,” Shook said. “And more disturbingly to me, there’s no limit on how many of these can inundate a given community. You could have five in a row on a streetfront. You could have an entire floor of an apartment building. Which, I think, weakens the fabric of a community.”

Atlanta City Councilmember Howard Shook.

Shook’s zoning-oriented proposals and similar comments after the vote that short-term rentals are “creating holes in the fabric of our neighborhoods” were not well-received by some other councilmembers.

“It’s very important to set up a system of regulations and bring these short-term rentals into a system of taxation that puts them on par with hotels and motels,” said Councilmember Jennifer Ide, whose District 6 includes parts of southeastern Buckhead, dismissing Shook’s comments as a “temper tantrum.”

Westmoreland defended the legislation, noting that the city’s Neighborhood Planning Units had reviewed the ordinance and strengthened it with their suggestions.

“I don’t think rentals — short- or long-term — create holes in our communities,” Westmoreland said. “Residents are using short-term rentals to make a living and to be able to continue to live in the city. I think we heard loud and clear that there wasn’t any desire to ban them completely, but to regulate them instead. That’s what passed.”

Zoning and location questions

Meanwhile, single-family zoning remains a question for the licensing system and short-term rentals, Matzigkeit and Shook say.

While some home-based businesses are allowed in single-family zoning, predominantly commercial uses — including hotels — are typically banned without variances. The city has previously cited the hotel ban in ordering shutdowns of properties that operated solely as short-term rentals, while some operators have complained that violates their property rights under the state constitution. Last year, the City Council approved a new “party house” ordinance that tightened that rule to make it clear that “large-scale” commercial events are banned in single-family zoned homes.

Matzigkeit and Shook say it is unclear whether, under the new system, the city can or will issue licenses for short-term rentals in single-family areas where the property is not the owner or long-term tenant’s primary residence. The ordinance says that any licensed short-term rental must follow zoning requirements, but does not address the single-family question. 

“Nobody knows. If I said I knew, I’d be lying,” Shook said of that situation. “… It’s going to be very, very, very interesting to see how the Law Department interprets this. And if I felt confident they would interpret it as they might interpret it, I wouldn’t have gone through amendment hell on Monday.”

Atlanta City Councilmember Matt Westmoreland.

Matzigkeit emphasized that the licensing ordinance does not change any zoning code, saying, “So what was illegal yesterday is still illegal today.” His own interpretation is that commercial uses are prohibited in residential zones, but he acknowledged there is uncertainty about what the city will do in practice. “I don’t know,” he said of whether the city can license short-term rentals in single-family areas.

The possibility of follow-up legislation on zoning was briefly mentioned by Ide during the council meeting, but was not a detailed part of the discussion. Matzigkeit said he was unaware of the forthcoming legislation described by Westmoreland. “I don’t know about a zoning paper,” he said, noting that zoning changes can be controversial.

While any zoning legislation remains to be seen, Westmoreland said his personal position on the single-family location issue is to match the new licensing system’s allowance of use of the primary residence plus one additional home. “That’s in line with my personal thinking,” Westmoreland said.