Lexington has approved new regulations governing short-term rentals, set to take effect on December 12. The unanimous decision by the Lexington-Fayette Urban County Council addresses community concerns regarding the proliferation of these rentals, particularly those that are unhosted, meaning the owner does not reside on the property.
The new rules modify existing ordinances, which were put in place earlier this year and currently impose no limit on the number of unhosted rentals in neighborhoods. Under the updated regulations, the Board of Adjustment has the authority to deny permits for unhosted short-term rentals if there is already a rental within 600 feet or if more than 2% of the homes within 1,000 feet are used as short-term rentals.
Additionally, the maximum occupancy for short-term rentals will decrease from 12 to 10 people. These changes come in response to community feedback, as many residents across various neighborhoods have expressed concerns over the rise in clusters of short-term rentals following the previous regulations.
Many cities, including Louisville, have implemented similar density restrictions to manage the impact of short-term rentals in residential areas. Councilwoman Liz Sheehan reported that the Board of Adjustment has seen a surge in requests for conditional use permits, leading to lengthy hearings that sometimes last up to eight hours.
During negotiations, some representatives requested further restrictions, specifically regarding exceptions that could allow rental operators to bypass the new density restrictions. Despite these requests, the council decided to retain certain exceptions to allow for permits even in cases where density limitations are present.
Community representatives highlighted specific neighborhood impact, with reports of up to 23 short-term rentals in some areas, indicating a density as high as 2.5%. Neighborhood leaders like Lynne Flynn and Walt Gaffield have urged the council to tighten rules to prevent clustering.
On the other hand, some short-term rental operators advocated for the ability to transfer conditional use permits to new property owners, arguing this would ensure consistency in operations and maintain the economic benefits that visitors bring to the city, including significant tax contributions.
The council’s decision follows ongoing discussions and represents a significant shift in how Lexington handles the growing demand for short-term rentals, balancing community concerns with the interests of property owners and the economic advantages of tourism.
