A bill once focused on removing regulation around at-home swimming pools was changed to block Lexington and other cities from putting density regulations on short-term rentals made popular by websites such as Airbnb and Vrbo.
Senate Bill 61, originally a bill loosening regulations on home swimming pools, was amended by House Speaker David Osborne, R-Prospect, late Wednesday to restricts cities’ abilities to regulate short-term rentals.
Other bills had been filed that limit local governments’ ability to regulate short-term rentals but those bills were not heard in a legislative committee during the 30-day session. Friday is the last day for legislation to pass prior to the veto period.
The new SB 61 would prohibit a city from including density restrictions including:
The bill would also require local governments to approve an application within 30 days and also says a local government can’t deny a request for a short-term rental unless there is a demonstrated public safety, health and welfare issue.
Lexington, Louisville and Covington have enacted density restrictions on the number of short-term rentals such as Airbnb and Vrbo in neighborhoods after many residents saw their neighborhoods over-run by short-term rentals.
Lexington recently changed its ordinance to allow the Board of Adjustment, which grants conditional use permits for unhosted short-term rentals, to deny a permit if the short-term rental is within 600 feet of another rental or if more than 2% of homes in 1,000 feet are short-term rentals.
If SB 61 passes, those restrictions would be immediately voided, according to the amendment.
Susan Straub, a spokeswoman for Lexington, said the city did not have a comment.
Walt Gaffield, president of the Fayette County Neighborhood Council, said the amendment was an attempt to circumvent public scrutiny.
“An amendment to a swimming pool bill to establish a state mandate over short-term rental regulation with no committee hearings is government in the dark and is unacceptable,” Gaffield said. “The amendment would eliminate all meaningful changes to the original short term rental ordinance and would suggest that the state legislature does not support local governments.”
Covington Mayor Ron Washington said local decisions are best made by locally-elected leaders. Covington spent four years tweaking and changing its short-term rental ordinance that it felt protected property rights and neighborhoods, he said.
“Our intent — and we believe we succeeded — was to retain property owners’ ability to create businesses and make money while also preserving the residential character of our neighborhoods, safeguarding the availability of housing here, and protecting our residents from the negative effects of bad actors who are using these rentals for parties,” Washington said.
Louisville also has density restrictions on the number of Airbnb and Vrbos allowed in a neighborhood.
Similar bills curtailing local governments’ ability to regulate short-term rentals were proposed in 2024 but did not pass.
Airbnb is in a legal battle with many Kentucky cities and local tourism boards over remittance of local hotel taxes to local governments and tourism boards, which are the main beneficiaries of local hotel taxes.
The Kentucky League of Cities and the Kentucky Travel Industry Association sued Airbnb over its failure to remit those taxes in December 2023.
That lawsuit is still pending.
Airbnb has agreements with some cities including Lexington, Louisville and Bowling Green. Airbnb is paying local taxes to those cities. Airbnb has argued remitting those taxes to so many cities and counties is too onerous.
However, some state legislators pointed out during an October Kentucky legislative hearing that Vrbo, a primary competitor of Airbnb, pays all of its local hotel taxes.
This story was originally published March 13, 2025 at 12:14 PM.
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Austin Horn is a politics reporter for the Lexington Herald-Leader. He previously worked for the Frankfort State Journal and National Public Radio. Horn has roots in both Woodford and Martin Counties.