Short-Term Rental Regulations by City: What You Need to Know

You find a 3-bedroom in East Nashville for $385,000. Great location. Strong rental demand. You're ready to offer.

Then you learn: non-owner-occupied short-term rentals are banned in that zone.

That's the reality of STR investing. Regulations change by city, by neighborhood, sometimes by block. Buy before you check, and you might own a long-term rental you never wanted.

Here's what's happening in five major markets—and how to research any city before you write a check.

Nashville: permits and zoning

Nashville requires a permit for short-term rentals. The catch: in R-zoned areas (residential), only owner-occupied STRs are allowed. If you're an out-of-state investor or you own multiple properties, you can't run a non-owner-occupied STR in most of the city. The rules tightened after complaints from neighbors and hotel interests. Check the current map. Zoning can vary block by block. Non-owner-occupied—the classic investor play—is banned in those zones.

If you don't live in the property, you need to be in a zone that allows it. Check the Metro Planning Department and the STR permit portal before you buy. The rules have tightened since 2018. Expect more changes.

Austin: Type 1 vs Type 2

Austin splits STRs into two types. Type 1: owner-occupied. You live there and rent out a room or the whole place when you're away. Type 2: non-owner-occupied. You don't live there.

Different rules apply to each. Type 2 licenses face more restrictions. Some neighborhoods have opted out entirely. The city's STR ordinance has been revised multiple times. Verify current status with the Development Services Department.

Denver: primary residence only

Denver effectively limits STRs to primary residences. You have to live in the property. That rules out most investor STRs—you can't buy a place, never live there, and run it as an Airbnb.

If you're house hacking and renting a unit on Airbnb, the rules may allow it. But a pure investment STR? Denver is not the market for it.

Los Angeles: 120-day cap

LA allows STRs, but with a twist. You get 120 days per year unless you register under the Home Sharing Ordinance. If it's your primary residence and you're registered, you can host unlimited days. If it's not your primary residence, you're capped at 120.

For investors buying a property to run as a full-time STR, 120 days isn't enough. You'd need to qualify as primary residence—which means living there. Check the exact requirements. They're strict.

The enforcement question

Rules on paper are one thing. Enforcement is another. Some cities have strict rules but little capacity to enforce them. Others audit aggressively. NYC shares data with platforms and pulls illegal listings. Denver has stepped up enforcement. Know your city. A rule that's not enforced might buy you time—but it could change. Don't bank on lax enforcement lasting. Assume the rules will be enforced. If you can't operate legally, don't buy.

New York City: host must be present

Local Law 18, passed in 2022, requires the host to be present during the stay. You have to be in the unit with your guest. That effectively bans most STRs. No more buying a condo and listing it on Airbnb while you live elsewhere.

Enforcement ramped up in 2023. Platforms share data with the city. Illegal listings get pulled. Fines apply. NYC is the strictest major market in the country.

HOA restrictions

City rules are one layer. HOA rules are another. Many HOAs prohibit or limit short-term rentals entirely. CC&Rs (covenants, conditions, and restrictions) can ban STRs even when the city allows them.

Read the HOA documents before you buy. If the HOA says no STRs, the city's permit doesn't matter. You're stuck with long-term or no rental at all.

State-level preemption

Some states have passed laws that preempt local STR rules. The idea: one state rule instead of a patchwork of city rules. Florida and Tennessee have seen preemption debates. Laws change. What's preempted today might not be tomorrow. Check state law and how it interacts with your target city.

Why regulations change—and why you need to stay current

STR rules are in flux. Cities that allowed STRs freely five years ago are now restricting them. NYC's Local Law 18 passed in 2022. Denver tightened primary-residence rules. Austin has revised its ordinance multiple times. What's legal today might not be legal in two years. That's regulatory risk. When you buy an STR property, you're betting the rules stay favorable. They might not. Factor that into your underwriting. And check the rules before every purchase. Don't assume last year's research still applies.

How to research local STR laws

Don't rely on a blog post or a forum. Regulations change. Here's how to get current information:

1. City clerk or permit office. They issue STR permits. They know the rules. Call or visit. Ask what's required for a non-owner-occupied STR in the address you're considering.

1. Zoning board. Zoning determines where STRs are allowed. An R-1 zone might ban them. A commercial or mixed-use zone might allow them. Get the zoning for the property and confirm.

1. STR Alliance. stralliance.org tracks regulations across the country. Good starting point. But verify with local sources—they're the authority.

1. Local REIA. Real estate investor associations often have members who run STRs. They know the practical reality. What's enforced. What's not. Where the gray areas are.

1. Attorney. For a big purchase, pay for an hour with a lawyer who specializes in local STR law. They'll give you a clear yes or no. Worth the cost. A $400 consult can save you from a $385,000 mistake. Treat it as part of due diligence, not an optional extra.

Red flags to watch for. Pending legislation. Neighborhood associations pushing for bans. Cities that have recently restricted STRs in nearby areas—they often spread. If you see those signs, dig deeper. The rules might change before you close. And even if they don't, the threat of change can affect resale value. A buyer might not want to pay full price for an STR if they think the city could ban it next year. Regulatory uncertainty is a discount. Factor it in.

Check before you buy

The biggest mistake: falling in love with a property and then discovering you can't run it as an STR. Do the research first. When you use leverage to buy—a mortgage, a hard money loan—you're on the hook for payments regardless of whether the city lets you operate. Regulatory risk is real. Factor it in. Know the rules. Know the HOA. Know the zoning. Then make the offer.

For the full STR playbook—including when STR beats long-term rental and when it doesn't—see the STR & Airbnb guide and our STR vs LTR comparison. Regulations are the cost of doing business in this space. The cities that allow STRs freely today might restrict them tomorrow. Stay informed. Stay current. And never buy before you know the rules. A $400,000 property that can't operate as an STR might only be worth $350,000 as a long-term rental. The $50,000 difference is the STR premium. If the rules take that away, you overpaid. Do the research first. Every time. The STR market rewards those who do their homework. The ones who skip it end up with a long-term rental they didn't want, or a property they can't legally operate. Neither is a good outcome. An hour of research can save you months of headaches. And if you're buying in a new market, budget for a local attorney. The $300–500 you spend on a consult is nothing compared to the cost of buying a property you can't legally use. Treat regulatory due diligence like you treat a home inspection. Non-negotiable. The STR market is still evolving. Cities are catching up. What was unregulated five years ago might be heavily restricted today. Stay ahead of the curve. Join a local STR group. Follow city council meetings. When you see proposed legislation, run the numbers. Would a ban or a cap kill your deal? If yes, factor that risk into your offer—or walk away. The best STR deal is one you can actually run. Regulations aren't optional. They're the rules of the game. Play by them. The investors who thrive in STR are the ones who treat regulations as a first-order input, not an afterthought. Make it part of your process. Before you tour a property, before you run comps, check the rules. It'll save you time and money. And potentially a lot of both.