Atlanta’s short-term rental enforcement likely to be delayed again amid legal questions, critics say

By John Ruch

The City of Atlanta is likely to delay enforcement of its new short-term rental ordinance – currently scheduled for Dec. 5 – yet again as legal issues mount, according to an industry group challenging the system.

“We expect, and based on the information [we have], that the enforcement date will be extended again,” said Kathie McClure, vice president of the Atlanta Metro Short Term Rental Alliance (AMSTRA), a group of short-term rental owners and operators that has been in negotiations with the Department of City Planning (DCP) for months after threatening a lawsuit. McClure said the City is “in charge of how this proceeds and we’re hopeful to meet with them further after the date is extended.”

DCP did not respond to a comment request. Its previous explanation for delays in enforcement – which was supposed to begin April 1 – consisted of saying, “It was determined that the implementation of this ordinance may require further consideration.”

The City has “not as yet” provided AMSTRA with any updated ordinance language, said McClure, and her group has not filed any lawsuit. She declined to comment on the substance of discussions with DCP.

The City Council last year established the short-term registration and licensing system in the wake of controversies surrounding the effect of short-term rentals, via such companies as Airbnb, on quality-of-life issues and the housing market. The system comes with various requirements and restrictions, including limiting an owner or long-term tenant to a license for up to two separate properties, one of which must be their primary residence.

The system took effect on March 1, with enforcement to begin a month later. But DCP repeatedly delayed enforcement, often with little public notice – first to June 1, then Sept. 6, then Dec. 5.

Behind the delays were AMSTRA’s complaints that the application process is “unnecessarily burdensome” and that a lack of grandfathering for existing multi-property operators violates a recent Supreme Court of Georgia decision. AMSTRA also supports other parts of the ordinance related to good property management.

Meanwhile, some lawsuits challenging short-term rental registration systems in other Southern states have been partly successful. While not binding on Georgia courts, they could inform further legal challenges and judicial decisions here.

Especially prominent was an August decision by the 5th U.S. Circuit Court of Appeals that struck down part of a New Orleans short-term rental registration ordinance that allowed homeowners to get a license only for their primary residence. The court ruled that the primary-residence provision violated the U.S. Constitution’s Commerce Clause by barring out-of-town or out-of-state investors. The New Orleans City Council has responded with a lengthy moratorium on new applications while it attempts to figure out a new, lawful ordinance. Atlanta’s ordinance has a similar primary-residence restriction, though not worded in the same way as the one in New Orleans.

In April, the North Carolina Court of Appeals shot down part of a short-term ordinance in the city of Wilmington, saying it violated state law by requiring registration. That system was aimed at capping the number of short-term rentals in the city. The court allowed other parts of the ordinance to stand, including restrictions on the number of bedrooms, management and property conditions.

A recent SaportaReport review of metro Atlanta listings on Airbnb, the short-term rental market leader, indicated challenges with a lack of data for policy-making and difficulty in enforcing local regulations.