It may be good that Chattanooga city government is bureaucratically slow in getting into gear its surveillance of the short-term vacation rental market.

Donna Williams of the mayor’s economic and community development office has the unfortunate duty of enforcing Chattanooga’s Beijing wall against the free market and the Internet.

By David Tulis / 92.7 NoogaRadio

She is charged with enforcing an unconstitutional district that establishes the Airbnb rental market, prohibiting people outside the district of enjoying private Prosperity by renting out their homes through Internet networks which are proliferating to the advantage of property owners worldwide.

Chattanooga in October created the district is a way of recognizing the presence of the Internet but also holding onto a legacy system of zoning controls applied against private property throughout the corporation.

Asked how many people are out of compliance or subject to enforcement action, Mrs. Williams says, “We don’t know. We are certain there are people outside the district who have their houses available for rent, but we have a vendor will be — if they haven’t already — will be notifying those folks they are noncompliant.

“If someone is operating a short-term vacation rental outside the footprint, they will be sent a letter, and I will have to look at the ordinance to see what the next step is.”

“The vendor just came online, we just got the contract approved, and they’re loading all the information into the computer system, so that’s information I’d have to check on for you.”

Illegal ordinance malconceived

The city council will revisit the ordinance shortly, so it’s possible that surveillance and enforcement letters that will follow to non-compliant homeowners will come too late to matter.

The ordinance is unconstitutional because it creates an artificial distinction between like parties. A man on one side of a given street is permitted to rent his home through Airbnb. The man across the street, in a like circumstance, is forbidden from operating through the Internet the service providing a landing pad for visitors to Chattanooga.

The ordinance also has been badly written by city attorney Wade Hinton, who pretends against basic legal principles that the city’s fine of $50 per incident can be duplicated daily until the homeowner capitulates.

The doctrine of res judicata prevents such mistreatment in the legal system. Though the ordinance says that a fine applies for every day that a house is out of compliance and yet remains open for business, res judicata requires a separate case to be file for each day that a homeowner is out of compliance. Such a requirement is untenable, and the city would not have the resources or the interest to pursue a new case for each day that the homeowner was noncompliant.

The limit is clarified by two cases that deal with restrictions on municipal power and make clear cities do not have punitive powers, only power to collect a fine or cost that is in the nature of liquidated damages. The first case is Chattanooga v. Davis, 2001, and the second is Chattanooga v. Myers, 1990. 

Therefore, the city has a toothless ordinance that is unconstitutional, and a defense of a legacy property control mechanism that abuses property rights and, with this short-term vacation rental rule, abuses private home owners and investors who rent out their homes for cash flow, capital gains and income.

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