Anderson v. Metropolitan Government of Nashville and Davidson County
In response to the growing popularity of websites like Airbnb and VRBO, and at the behest of the hotel industry and a few disgruntled neighbors, Nashville capped the number of available permits for non-owner-occupied short-term rental properties at 3% of properties within a census tract. Nashville did not cap the number of permits available for owner-occupied properties.
Rachel and P.J. Anderson–a couple with two young children–frequently travel for PJ’s job as a musician. To earn extra income, the family began renting their home on Airbnb while they were out of town. Because the home remained their permanent residence, they obtained an owner-occupied short-term rental permit–which Nashville does not limit. Wanting to promote their home’s availability on Airbnb, the Andersons sought to place a small, temporary sign in their yard during a popular weekend festival and a small sticker in the window near their front door to alert guests they were in the right place. However, city officials informed the Andersons that placing the sign and sticker violated the new law. Worse, when the family needed to temporarily relocate to Chicago, the city refused to allow them to rent out their home at all pending their return, because the city had already allotted the maximum number of non-owner-occupied permits.
The Andersons sued to strike down the unconstitutionally burdensome restriction, and the trial court did so, holding that the law was too vague. On appeal, the Andersons argue that the 3% cap also runs afoul of the Tennessee Constitution’s Anti-Monopoly Clause. In short, because the cap reserves the market for non-owner-occupied short-term rentals to the lucky few who were first to acquire permits, the cap is subject to the “legitimate relation” test, which it fails. PLF supports the Andersons as amicus and filed a brief showing that courts must put some teeth into judicial review to provide a meaningful check on government overreach.