City officials said a new online detection system has turned up over 400 illegally operating short term vacation rentals in Chattanooga.
Caleb Fisher, of the Land Development Office, said the city has been sending out 40-50 letters a week giving the rental owners the bad news. He said the letters are planned to go out over a nine-week period. About four weeks worth have been sent out.
Those operating without a certificate will need to come in and register and pay the $165 annual application fee.
Mr. Fisher said many have told him they "didn't know" about the required sign up, while some complain that the requirement is "not fair."
He said those not complying were about evenly split between the live-in owners and the absentee owners. He said the absentees are not yet able to sign up because there currently is a moratorium in place on new non-owner occupied units.
Chris Anderson of the mayor's office said the city gained $940,391 in income from the STVR business last year - up from the previous $594,055. It is set to go up significantly with all the new finds.
A City Council committee is aiming to have a re-worked STVR draft resolution ready by Nov. 1. The City Council is due to discuss it next Tuesday.
Dan Reuter, Regional Planning Agency director, and Mr. Anderson advised against the current setup of having an overlay district where the rentals are allowed. Mr. Reuter proposed using zoning classifications, but committee chairman Chip Henderson said he was strongly opposed to that, saying it led to a number of zoning issues.
Councilman Henderson also said that the council in the past had been split on allowing the rentals. He said three of the council members "said heck no to having them in their districts."
There are plans to set up a seven-member STVR Appeals Board that would hear appeals of staff denials of applications and revocations of permits. Four members would be named by the mayor and three by the City Council.
Councilwoman Jenny Hill proposed much higher fees for rental owners, saying the overage could be used to boost affordable housing. She said there could be a charge of $1,000, plus $1,000 per bed. She projected that larger operators were making some $200,000 per year and could afford the charge.
Councilman Henderson was opposed, saying, "Fees ought to be basic to cover operational costs. At some time it starts to look like a grab."
Owners at the meeting said rentals have a 60 percent occupancy rate and some owners shut down for part or most of the year.