Lexington Council Moves Towards Permitting Short-Term Rentals in Rural Fayette County

LEXINGTON, KY – The Lexington-Fayette Urban County Council has taken a significant step towards permitting short-term rentals in the rural areas of Fayette County. This decision, which was tentatively approved by the General Government and Planning Committee on Tuesday, aligns with recommendations from the Rural Land Management Board. The board oversees policies for land use in rural regions and focuses on farmland protection.

The council is expected to formally consider the proposed ordinance soon, which will then be reviewed by the Urban County Planning Commission. If the changes are enacted, it could take several months for them to be fully implemented.

Earlier this year, the city established rules for short-term rentals within Fayette County’s urban service boundary, but backlash from neighborhoods led to further proposals to limit the number of rentals allowed in specific areas. The new discussion focused on restrictions around short-term rentals in agricultural zones, which primarily constitute land outside the urban boundary. The Rural Land Management Board emphasized the importance of maintaining agricultural integrity and ensuring safety for nearby farming operations.

The proposed regulations include requirements for short-term rentals, particularly those not hosted by owners living on the property. Councilwoman Kathy Plomin, recognizing the interests of established rural short-term rental operators, successfully amended the original proposal. The amendments allow unhosted short-term rentals on properties under ten acres and stipulate that rentals can operate at a distance of 500 feet from similar properties.

In addition, any operator wishing to establish a short-term rental must obtain a certificate from the local health department to ensure the septic system can support additional occupants. This requirement is essential due to the lack of city sewer connections in these rural areas, and limits on guest capacity will also be enforced to mitigate potential environmental impacts.

Furthermore, the board’s deliberations included a provision for the fourteen short-term rentals that registered with the city in January 2024 to be exempt from the new regulations, allowing them to continue operating as legally non-conforming uses. This decision has raised questions among local council members regarding the rationale for allowing these rentals to continue, but city officials confirmed that they were in compliance prior to the new ordinance taking effect.

The next steps in this regulatory process will involve the full council and subsequent reviews by the Urban County Planning Commission, setting the stage for future discussions on managing the balance between rural tourism and agricultural preservation.