Ruining Nashville For Fun And Profit

Nashville is a progressive city, in many regards a liberal city. But all of that is window dressing for the kind of city Nashville truly is: a developer’s city. Always has been, always will be. Developers own this town (always have, always will) and each successive liberal, progressive Democratic mayoral administration seems perfectly happy to turn our quality of life, livability, sustainability and affordability over to the leeches who have sucked this city dry of all that made it special in the first place.

A perfect example of this is our policy regarding short-term rental properties, aka AirBnB, VRBO, etc. Last year Nashville’s Metro Council passed a law regulating (and taxing) these rentals, the logic being not doing so would push this activity underground and cause the city to miss out on a revenue source. Ever since it’s been a nightmare for neighbors and overwhelmed our zoning department:

Enforcing these regulations has forced Nashville inspectors and zoning enforcement employees to devote a large part of their time just to check on short-term renters. What the city thought would be permitting for 200 individuals and investors turned into more than 1,000 applications.

“Since we set our first date for permitting, it has absolutely inundated our department,” Herbert said in an interview with The Courier-Journal.

We’re actually closer to 2,000 now. The ordinance as passed is completely unenforceable, and therefore useless. It has also enriched developers mightily, while making Nashville’s housing crisis worse. That’s because in Music City we allow both kinds of STRs — those operated by actual homeowners, and those operated by LLCs.

The image rental platforms like AirBnB present is of a carriage house or extra room rented out on weekends by a nice family living in the main house; the owners are people who are on-site and available to monitor their renters and able to make a little extra cash to pay their mortgage. Indeed, that is the very image that is pushed by right-wing think tanks like the Beacon Center, an ALEC-spinoff which has sued Metro Nashville over its ordinance (no doubt at the behest of AirBnB lobbyists). Those rental situations may indeed exist but in Nashville, they are not typical. The typical short-term rental in Nashville, at a whopping 80%, are investor-operated businesses, condos and apartments.

And herein lies the problem: years ago, Metro Nashville’s Planning Department (a wholly-owned subsidiary of the private, for-profit development community) commissioned a study about population growth trends. This study found — shocker! — that the region was expected to grow by a whopping 1 million residents, prompting headlines like this one in our developer-friendly news media:

Ledger

Thus launched the long-range plan for Nashville’s growth known as “NashvilleNext,” which included the usual dog and pony shows known as “community input meetings.” I went to a few of these meetings. Attendees were given tasks like putting colored stickers on a map to indicate where they want to accommodate these newcomers; I know of one such meeting in which attendees crammed their stickers into the city cemeteries. Not exactly a useful exercise, but I digress.

The point of this was to give the process the veneer of “community input,” while the Planning Department went ahead and did what it (and the developers) wanted. Thus our new long-range plan calls for infill in our wealthy and desirable neighborhoods. The large lots and green space we once enjoyed are now filled with the dreaded “tall-skinnies,” detached properties which in defiance of all logic are still called “duplexes” under Nashville’s weird definition of a duplex. They loom over their neighbors and sit on concrete pads where one house with a yard and trees used to be.

We have been told by our city leaders that we need to accommodate this infill, that “everyone needs to do their part,” and take that loss of our neighborhood character and history on the chin because “ZOMG a million people are coming!”. And yet, after five years of a building boom and with thousands of new homes being built all over town, we’re still seeing headlines like this one:

Nashville struggling to meet demand for new homes

With all of this building going on, why are so many new houses showing up on AirBnB, VRBO, etc., as short-term rentals for bachelorette parties? Nashville, why are you doing this? If we truly have a housing shortage, why are you letting developers and real estate companies clear away lots that contain perfectly good homes — many times, even, the affordable “workforce” housing we so desperately need — only to build luxurious new homes that are then used by tourists? Why?

Why allow properties like this one, in the so-hot-I-gotta-wear-gloves 12South Neighborhood:

12SouthVRBO

Or these in the (once historic, now transformed) Germantown neighborhood:

Germantown

Or this in the East Nashville neighborhood, one of four adjacent tall-skinnies, all rented out to tourists and therefore off the market to be used as actual housing:

EastNashville

And it’s not just new houses. Old houses are off the market, reserved for tourists. Entire apartment complexes are being built, not for the housing we desperately need, but so developers can make money on the short-term rental market. This has made developers very rich, but it hasn’t helped Nashville’s housing crunch, and it’s also removed any free-market controls on overbuilding. Great for developers, not so great for us residents.

I have a few AirBnBs in my neighborhood. So far, most are in condo complexes on my street. These are condos that could be rented out to someone who needs housing, but instead profits some real estate company. I didn’t even know they were there, though I did wonder at the strangers I suddenly saw walking down my street, people I’d never seen before. One couple in particular I thought were homeless and living in the neighborhood park. (Sorry, dred-locked and tattooed tourists: hipster or homeless is a real thing.) When I saw them walking through a neighbor’s yard, I grew alarmed … then saw they were just taking a short-cut to an apartment. Never saw them again after that weekend, and so I’m guessing they were guests at the AirBnB I saw listed on the platform. Thanks for letting us all know, guys.

Telling us we have to build build build to accommodate projected growth and then not putting those houses and apartments on the market for actual residents is the kind of move that makes me call bullshit on Nashville’s planning agenda. It’s one of those glorious moves you can expect from a developer-owned town. Tell everyone we need to build like crazy, then let those houses sit empty most of the time. If Nashville’s city leaders really gave a crap about housing, they wouldn’t have allowed LLCs to operate short-term rentals in the first place.

Our Metro Council is currently weighing in on some tweaks to the STR ordinance, while our state legislature is looking at House and Senate bills that would prohibit municipalities from regulating or taxing short-term rentals at all (of course they are!). It’s all fun and games until someone gets a party house next door.

15 Comments

Filed under Nashville

15 responses to “Ruining Nashville For Fun And Profit

  1. Jim in Memphis

    Nashville’s boom in construction has definitely been good for me over the last several years. I don’t get involved in single family homes, but we have been part of several hotel design teams in the Nashville and surrounding areas. Seems like there are always 4 to 6 cranes in the downtown area every time I am in town. The new convention center has really set off demand for hotels in the downtown area and just about every piece of available property is turning into a high rise hotel down there. Hotel room rates are also through the roof right now for downtown.

    • Well as long as it’s good for you, Jim.
      🙂

      I wonder, once these hotels come on line, how that will impact the AirBnB market. Probably not much. The concept of a “party house” is really attractive to the group sales market. You can get away with a lot more in a neighborhood than in a hotel that’s staffed 24 hours.

      • Jim in Memphis

        At this point I am just hoping the revitalization that is spreading east will continue into Madison and help my parents’ home value. They live in a nice quiet neighborhood and I would like to just sell the house and not change it to an AirBnb rental when they decide to move out :p.

        As to the party houses in neighborhoods this should be addressed through residential noise regulations in my opinion. This would then be something for the police to enforce and not the understaffed code office. I don’t see why government should be in the business of deciding whether or not a property should be available for rent nightly, weekly, monthly, or yearly. I do think that rental laws should apply to all rental properties equally in terms of how many people can stay in a property. I don’t see where it is up to the government to decide what someone or a business decides to do with their property as long as it meets the local zoning requirements. I don’t think you can force someone to agree to not use a single family home as a rental property if that is what they want to do with it. It is their property and the function would still be residential.

      • Right now complaints are actually enforced on the noise ordinance level (at least, for complaints like party houses). And that’s completely inadequate. Noise complaints are very low priority for police departments. You’ve got a domestic abuse call, a shooting, a convenience store robbery, and a noise complaint, well … the noise complaint might get answered in a few hours, IF you’re lucky. I’ve been to meetings on this issue where people say they’ve called and they NEVER see Metro answer. We had a house where some college kids were setting off fireworks at 2 a.m. and Metro might have come by around 6 am, at which point everyone was passed out. Not a workable solution.

        The government absolutely has a role in deciding what can be done on a property. It’s called ZONING. You don’t want a McDonald’s drive-through right next to your house, do you? The reason you don’t have one is ZONING. Do you want a strip club next to your church? Do you want a methadone clinic next to your kindergarten? Zoning is a very acceptable, logical and reasonable way of managing the different interests and property uses of a community. I have no issue with the concept of zoning at all. I love zoning. And all of this AirBnB crap falls under the rubric of “zoning.”

  2. butbutbutbut FREEMARKIT INVIZBLEMILLENIUMHANDSHRIMPS!!!1one!1

    Get with the program, Beale! Slum-Lord or Death!!!

    [/snark]

  3. Larry

    Friends of mine in East Nashville own a lovely home dating back to 1918 on a 2/3-acre lot, in an established residential neighborhood of modest bungalows & ranches. They hear from developers/realtors “every week,” asking if they want to sell. The older home directly across the street was torn down and a pair of contemporary “tall-skinnies” were built in 2014. This April, one of that pair sold for the asking price of $460K. Style-wise, these homes look like a pimple on the Mona Lisa.

    FWIW and a slight digression: I’m well familiar with a small island community (pop: 5,400), up in New England, now scrambling to come up with new regs to deal with their own AirBnB problems. Picture the Osbournes spending a long weekend in Mayberry….makes me ill.

  4. Larry

    “Jim in Memphis”….I myself have rented a 1-family house on a long-term lease and, yeah, that’s fine and I was a respectful tenant. I think the real issue here is (for example) weekend rentals in established neighborhoods, for people attending weddings and such. Let’s be blunt…such rentals tend to host more people than are “supposed” to be there, of a younger demographic; they don’t respect the property nor the rights of the neighbors…and so on. Instead, it’s Party Central Time. I know this, based on the experiences in that island town I’d referenced, above. Yes, neighbors can call the police, or complain to the town gov’t after the fact, but the point is they shouldn’t have to, in the first place. Leaving it up to enforcement of noise (etc) regs is more like closing the barn door after the horse has escaped.

    • But long-term leases are a different issue entirely. And yes, I do know that AirBnB is looking at a model that is long-term (over 30 days). I feel like if you sign a 6 month or 1-year lease, you’re a neighbor. I see you every day, you’re part of my community. Someone here for a 3-day weekend bachelorette party? No.

      And since we’re talking about, that’s what I find so offensive, so absolutely irritating, about AirBnB’s “Live There” ad campaign. Don’t just visit Nashville, live there! As if staying in a house in a neighborhood makes you a resident! How fucking absurd. Were these tourists there when my neighborhood rallied to get the sidewalk they now enjoy? No. Were these tourists here when we attended neighborhood meetings to keep a for-profit day care center (and its 200+ cars) out of the neighborhood? No. Were they here when we fought to keep our high school, and to get the needed renovations budgeted? No. You don’t live here, AirBnB assholes. You’re leeches on the hard work and effort of the people who do. All we get is your noise, traffic and the unsettling “who the fuck is that” that comes with seeing transients in the neighborhood.

  5. Bitter Scribe

    God knows I’m no real-estate expert, but I can’t help thinking this STR market is some kind of bubble.

  6. K

    Impact Fees
    The arguement given is always that growth is inevitable so we have to pay for it. Taxes subsidize, and encourage, development that developers profit from.
    Turn the arguement around If growth is inevitable it can pay its own way.
    Impact fees for incresed capacity to pay for new schools, new fire stations, New libraries, new roads, new civic amenities.
    Let taxes pay for operations, maintence and replacement. New capacity shpuld be paid for by new capacity added on.
    Average house size now is approx. 2,500 sq. ft. ( unless small house movement has impacted the averages) in the 1950’s it was 1,000 to 1,200 sq. ft.
    Cut back on the size and pay the cost to the community in impact fees. It is the taxes that kill fixed income, poorer people on the margins. Often they can get a down payment and handle payments but to ask them to subsidize elaborate developments they often aren’t even allowed to drive through is outrageous.
    But with development infrastructure costs being underwritten on the back of local taxpayers ( City, County/ Parish, State ) is insulting and harmful.

    • Agree with your assessment. Also, in my neighborhood we’ve had very poor leadership at Council. Our last councilman worked for a developer. We got very little reinvestment back in our community, despite the fact that my part of town is the county’ #3 revenue generator. But we have awful traffic gridlock; the city has just thrown its hands up in the air and given up on fixing anything, we’re all supposed to walk and bike everywhere and that’s magically going to solve everything. We even had some people telling us we needed to to sell off the green space in front of our high school to developers to pay for school renovations. Which was beyond insulting, because again, we already generate plenty of revenue, especially with all of the infill we’ve been forced to bear. Yet that money goes to other parts of the city to pay for their sidewalks and new parks and school renovations. It never comes back to my neighborhood.

  7. greennotGreen

    Since I moved to Cheatham County earlier this year I’m a little out of the loop, but did I read that there a move afoot to remove any requirement for developers to build affordable housing? Won’t that plus short-term rentals seriously exacerbate the housing shortage?

    • Well actually, the issue is that we don’t have any requirement that developers build affordable housing. So Metro Council has been weighing incentives and other things to encourage them to do so. So there have been a lot of meetings about that. The state legislature passed a bill making it illegal for any municipality to MANDATE affordable housing so everything has to be an incentive. The Republicans in our state legislature love small government, as long as it’s not local government. They love to tell the cities what to do.

      My frustration with the affordable housing conversation is that we’re always talking about what new thing we’re going to build. No one ever talks about what’s here that we’re tearing down. As an example, in my neighborhood we had 5 houses that were rented to college students and young people just starting out — one house had two kindergarten teachers who taught at a local school they could literally walk to. Another had some musicians. Two others housed students from the local private college. I live in a fairly upscale part of town, but this is what’s “affordable housing” in my neighborhood — older homes that people can rent. But they were all owned by an investor who lived outside of Nashville. And those people were all kicked out, and the houses torn down, and now we’re getting *32* brand-new luxury million dollar homes. Where there used to be 5, and green space. That story is being replayed a hundred times all over town.

  8. Democommie

    But, but …teh impact fees are UNFAIR to the Moneylords!!

    I knew a developer who was pis sing and moaning about being fee’d to death by the city when he was building 3 or 4 $350–400K condos into a single family home that he paid maybe $150K for. Asshole.