ACC Commission passes strong short-term rental regulation on uncertain legal grounds

The ACC Commission passed strong regulation on short-term rentals this week as recommended by the ACC Planning Commission, but it may not last.

The regulations prohibit new short-term rentals like Airbnbs and VRBOs in single-family neighborhoods unless the owner of the rental lives there most of the time. Existing short-term rentals that don’t comply will be given two years before they would have to stop operating. 

For further details, see APN’s previous reporting here.

The two-year sunset provision in particular has been controversial because it means current Airbnb owners will not be ‘grandfathered-in’ permanently. County attorneys recommended against the sunset clause because they feel it may violate vested property rights under Georgia law. 

The provision has also been criticized by many homeowners in Athens for not being strong enough. These residents feel that short-term rentals should generally not be permitted in single-family neighborhoods in the same way hotels would also not be allowed. 

The reason why short-term rentals are allowed in neighborhoods at all is that there’s been no official definition of ‘short-term rental’ in the county’s zoning code, making it impossible to enforce any kind of restriction. Until now, they’ve been treated as a regular homes, not as businesses. 

With the passage of the new regulations, this problem has been solved, at least for now. But over the next few months or years, the commission may be forced to retract some or all of the regulations they just passed due to the threat of legal action.

The looming lawsuit

David Ellison, an attorney representing several short-term rentals owners in Athens, told the commission during public comment in no uncertain terms that his clients would be suing them.

David Ellison
David Ellison, speaking to the commission

“My clients are concerned that they are being singled-out. They’re not the bad actors here,” Ellison said. “They’re frustrated that they’ve been playing by the rules and had real, distinct expectations [for profiting from] their investment, and now it’s being taken away at a moment’s notice…If y’all pass this tonight, you’re putting property owners on notice to take legal action.”

Ellison argued that the two-year sunset provision in particular is invalid because rental owners would not be compensated for the loss of revenue they might suffer after being forced to close. After making this point, he proceeded to slam the entire ordinance as invalid because he claimed it violated due process and equal protection rights for out-of-state rental owners, who he said were being discriminated against.

“At the end of the day, an ability to lease property is a fundamental right, and any interference with that is considered a taking,” Ellison said. 

Finally, he argued that preventing out-of-state landlords from operating their properties as short-term rentals violates the commerce clause of the US Constitution. While it may sound like a wild claim, there is some legal precedent for this view.

In 2022, the 5th Circuit Federal Court of Appeals ruled that a similar law restricting short-term rentals in New Orleans was unconstitutional because it restricted interstate commerce. The ruling conflicted with a 2019 ruling in the 9th circuit that rejected this argument and affirmed the right of cities to regulate Airbnbs. 

Georgia is located in the 11th circuit which is not bound by either of these rulings, making the legal legitimacy of Athens’ ordinance uncertain.

A winding road to passage

Despite overwhelming support from the public at a recent town hall meeting and in public hearings for years, commissioners had great difficulty coming to an agreement on this legislation. Out of fear of a lawsuit, Commissioner Dexter Fisher asked his colleagues to deny the regulations and send them back to the ACC Planning Commission for modification.

Dexter Fisher
Commissioner Dexter Fisher

“I think we really need to take the advice of our legal counsel,” Fisher said. “When I was elected to this office, I said I would protect how we spend our money. If we go into litigation, do we want to spend that money… to fight a lawsuit that we don’t need to fight?”

“Our attorneys have advised us against adding the sunset clause into this,” Commissioner John Culpepper said in agreement with Fisher. “I think it’s irresponsible for us to expose ourselves to unnecessary liability and expenses trying to defend this.”

However, other commissioners expressed willingness to battle it out in court if need be to protect neighborhoods and mitigate the damage short-term rentals are doing to Athens’ housing market.

“We have to do something to protect our neighborhoods,” urged Commissioner Patrick Davenport. 

Commissioner Melissa Link
Commissioner Melissa Link

“I was on the committee that first started looking at STRs about five years ago,” said Commissioner Melissa Link. “There were about three hundred existing in Athens then. Now we’re up to over 1,000…This is a problem that has been snowballing for years now and we’ve got to get it under control.”

“If we as a body made our decisions based on the number of times people get up and say they’re going to sue us, we wouldn’t make any decisions,” said Commissioner Mike Hamby.

In the face of strong opposition, Fisher’s motion failed 4-5. Fisher, Culpepper and Commissioners Ovita Thornton and Jesse Houle voted ‘yes’ to deny the regulations and Commissioner Allison Wright, who owns a short-term rental, recused herself from the vote to avoid a conflict of interest. 

Commissioner Carol Myers made a substitute motion to approve the regulations, but in a 5-4 vote her motion also failed. Text amendments to ACC zoning code need six votes to pass. It was the same group of four commissioners voting to deny, although this time, they were voting ‘no.’

Commissioner Jesse Houle
Commissioner Jesse Houle

Houle’s vote was somewhat surprising, as they have been strongly supportive of limiting short-term rentals in the past. Houle was concerned about a lawsuit, but more important to them was preserving the chance to make the ordinance as strong as possible.

“Facing lawsuits is inevitable. We face lawsuits all the time and I don’t think that should dictate what we do,” Houle said. “However, the outcomes of litigation are not inevitable. We have a chance to strengthen this.”

Houle clarified on social media that they worried if the sunset provision was struck down in court, as seemed very likely, ACC could be prevented from doing anything similar in the future. On the other hand, if the sunset period was lengthened before the lawsuit (from two years to five years, for example), it may have a better chance of holding up to legal scrutiny.

A brief impasse

With Houle voting against the regulations, neither bloc of commissioners was able to get a majority and the body was unable to take action in any direction; they couldn’t accept or reject the regulations. Something had to give or the meeting would be stuck in endless procedural limbo.

Mayor Kelly Girtz called for a brief recess. As meeting attendees got up to stretch their legs, commissioners could be seen behind the rail gathered in intense discussion.

When Girtz called the meeting back to order, Myers made another motion to accept the planning commission’s regulation of short-term rentals. However, she also asked Girtz to immediately send the regulations to the commission’s Government Operations Committee for more discussion. 

Girtz agreed and the motion ended up passing unanimously.

Next Steps

As it stands today, short-term rental regulation is in effect and the ban on new short-term rentals in Athens has been lifted.

But that’s not the end of the story. We’ll probably see these regulations come back before the full commission sometime this year. Even if it passes at that time, we’ll have to wait for the outcome of the inevitable lawsuit before things will finally be over.

This process could take years, leaving Athens residents to deal with the noise, traffic and other negative impacts of short-term rentals for the duration. 

Yet, for these residents there is a ray of hope; at the same meeting, the commission also approved a short-term rental coordinator position in the ACC Code Enforcement division. This code enforcement officer’s only job will be to track short-term rentals and make sure they comply with ACC code. 

That’s a first – Athens has never had the ability to hold short-term rentals accountable before. While enforcement will remain very challenging, it will at least be someone’s job.

Another silver lining is that new short-term rentals will have to comply with the ordinance as written. That means there shouldn’t be any new short-term rentals operated by out-of-state investors in single-family neighborhoods anymore, at least until the lawsuit.

APN will keep a close eye on these regulations as they move through committee.

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