Norris council votes for zoning restrictions on short-term rentals

On first reading, the Norris City Council on Wednesday night (Oct. 26) approved a revised zoning ordinance that would prohibit short-term vacation rentals in the city’s primary residential zones.

The measure would permit the Airbnb-type rentals only in the C-1 and C-2 commercial districts, the P-1 Professional and Civic District and the S-1 Scenic and Highway District.

If it receives final approval on second reading – tentatively scheduled for the Nov. 14 regular council meeting – the short-term rental businesses would be banned from R-1, R-2 and FAR residential districts in the city. That includes the historic original residential areas of the town that were created by the Tennessee Valley Authority to house workers building Norris Dam in the early 1930s.

The zoning revisions came after the Norris Planning Commission voted in early October to send a proposal to the council for the changes, which initially would have banned the short-term rental businesses in all residential zones except the so-called FAR zone (Forestry/Agriculture/Residential), which mainly encompasses Dairy Pond Road.

But when the council took up the issue earlier in October, Mayor Chris Mitchell signaled that he would also like to ban the holiday rentals from the FAR zone, as well.

Other council members agreed, with Will Grinder and Loretta Painter specifically commenting that they also did not want the rentals to be allowed in the FAR zone.

Then during last week’s special meeting, the C-2 commercial zone was added to the list of allowed zones; it initially had not been on the list.

Earlier this year the city passed an ordinance allowing and regulating short-term rental businesses in the city, and as it stands until the zoning changes are finalized, the rentals are allowed in all zones, including the original, historic areas in the R1 zone.

Council members signaled at the time that they wanted to ban the rentals in residential areas, but were told that would have to be done through a change in the city’s zoning and land-use plan. That’s what precipitated the current move to amend the zoning law to exclude the rentals from residential areas.

Because anyone could still get a permit to open a short-term rental property in any zone until the zoning law is amended, Mayor Chris Mitchell said in the council’s Oct. 10 meeting, “I think there’s some urgency to this [zoning change].”

A public hearing on the rezoning ordinance also must be held prior to second reading at the council’s Nov. 14 meeting. The public hearing probably would be scheduled just before that meeting.

Under the current short-term rental ordinance, owners are required to obtain city permits for their properties and to pay taxes on each rental transaction.

Short-term rentals are defined by the ordinance as being overnight accommodations, other than hotel and bed-and-breakfast lodgings, of at least one night, but no longer than 30 nights.

They have become popular worldwide through such online services as Airbnb and Vrbo (Vacation Rental by Owner).

Under the ordinance, owners of these properties have to pay $250 to apply for a city permit, as well as obtain Anderson County and Norris city business licenses for them. They also must pay an annual $50 fee for renewal of each permit and inspection of the property.

The ordinance left out two provisions the City Council wanted to enforce for short-term rentals: one limiting them to specific zones; and another setting up a city sales tax for rental transactions.

A separate ordinance has since been passed to levy the city sales tax on rentals.

Even if the zoning changes are made, any short-term rentals already operating in the city will be allowed to continue even if they are in a zone that excludes them, as they will be grandfathered in as “legacy” properties.