Chattanooga, TN Short-Term Rentals: Primary-Residence-Only Rule (2026)

Sec. 38-85 defines the two designations that drive the whole overlay: a Homestay is 'a short-term vacation rental property which is the primary residence of the applicant,' with 'primary' meaning the applicant actually lives there at least 183 days a year, while an Absentee rental is one that isn't the applicant's primary residence. That distinction controls where each type can operate. Sec. 38-86(a) allows a homestay in any residential zone inside the overlay district, plus mixed-use, commercial, or Form-Based Code zones that already permit a single-unit detached home or an accessory dwelling unit.

Sec. 38-83(a)-(b) confines a new absentee rental to mixed-use and commercial zones that allow a hotel, or to a parcel of 20 or more acres held in common ownership that allows residential use. The 'primary residence' claim isn't just declared once: Sec. 38-89(c)(2) requires a homestay applicant to be a natural person, or a Tennessee business entity whose owner actually lives on the premises, and that residency must be re-proved every year at renewal with a driver's license number, business records, or other documentation the Development Review and Permitting Division accepts.

A homestay can use either the primary dwelling or an accessory dwelling unit as the rental, but never both structures on the same lot at once (Sec. 38-86(c)), and no short-term vacation rental, homestay or absentee, may operate inside an Affordable Housing PILOT property (Sec. 38-86(b)).