On a second try, the City Council may approve short term vacation rentals - but only in a specific urban zone.
Councilman Chip Henderson said the Urban Overlay Zone used by local planners will be a starting point.
It includes the downtown area stretching from the river down to the state line. It also includes sections of North Chattanooga and East Chattanooga.
Councilman Henderson said other council members should let him know which sections they would like to add and to leave out.
Councilman Anthony Byrd said some sections of his district "love it and others don't want it."
Councilwoman Demetrus Coonrod said Highland Park residents are favorable, but not so much in the Glass Street section.
Under the new plan, zoning would not be involved in the equation. Presently, it is allowed only in R3 zones.
It is estimated there are over 500 local rental sites - most of them technically illegal.
Those presently who are legal would be "grandfathered in" despite where they are located.
The application would be $75 for owner occupied and $125 for non owner occupied. There would be a $50 annual fee.
Those interested would apply for a certificate.
In cases of non owner occupied, neighbors would be notified and could get a hearing before the City Council.
Councilman Henderson said there could be some sizable hotel motel and sales tax revenues from the rentals. He said, "We are leaving a lot on the table now."
The units would have no more than nine bedrooms, and no more than five bedrooms if R1.
They would have to meet fire codes and provide adequate parking.
Councilwoman Carol Berz said a key factor for her is whether the new ordinance would be enforced. That would be up to the Land Development Office.
Officials said there would be some monitoring of sites through computer software programs that keep up with who is offering rentals.