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The rundown of Lexington’s new short-term rental regulations

After months of debate, the Lexington-Fayette Urban County Council has passed regulations for short-term rental owners for the first time ever.

Two houses sit side by side.

New rules will require STR owners to pay annual fees. | Photo by LEXtoday

Table of Contents

Lexington has passed regulations for short-term rentals (STRs) — like Airbnb and VRBO — for the first time ever. This means in order to operate in Fayette County, STR owners will have to abide by more mandates. Let’s unpack.

How we got here

In the spring of 2023, the General Government and Planning Committee passed a resolution that would alter city ordinances and how they relate to STRs.

The proposed changes were created by a Lexington Fayette Urban County Government workgroup — which included members of city council, the division of planning, the department of revenue, and research analysts.

The new rules

Now, the Lexington-Fayette Urban County Council has approved amendments to an ordinance, which will require owners to:

  • Obtain an STR special fees license
  • Pay an annual $200 licensing fee + $100 for every additional rental
  • Include local registration numbers in advertisements
  • Limit occupancy to 12 guests in residential areas

Owners may be subject to citations and could even lose their special fees license if they violate any rules.
The licenses will give the city a more clear view of just how many STRs are being operated and rented within the city boundaries — a necessity for leaders to make informed decisions in the future.

Owners who apply + receive a conditional use permit can potentially accommodate more guests.

On the other hand, STRs within owner-occupied homes and specific business zones will be exempt from the permit. Additionally, owners with already existing STRs in permit-mandated areas will be grandfathered in.

Following the approval of other ordinances and zone text amendments, STR owners will have six months to be up-to-date to have a license.

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