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

Hendersonville's STR framework does not use primary-residence ownership as a regulatory gate for permitted commercial-zone STRs. Investor-owned, LLC-owned, partnership-owned, trust-owned, and out-of-state-owned properties may all operate STRs in the Old Town Commercial (OTC) and General Commercial (GC) zoning districts provided the operator holds the Engineered Site Plan, Use and Occupancy Permit, and business license. This is structurally different from a growing number of Tennessee jurisdictions that have layered primary-residence requirements onto residential-zone STR permits - most prominently Franklin TN (December 2019 ordinance requires owner-occupancy for all new residential-zone STR permits) and from out-of-state primary-residence models such as San Francisco (primary-residence requirement for any STR; 90-day cap on unhosted) and Portland OR (primary-residence requirement and 95-night cap on unhosted). Hendersonville's choice to keep the commercial-zone STRs available to investors reflects the deliberate channeling of investor STR demand into a small commercial-zone footprint rather than imposing it on residential neighborhoods. The trade-off is the categorical residential-zone prohibition: in any residential zoning district (R-10 through R-80 and residential PUDs), STR use is prohibited regardless of whether the owner uses the property as a primary residence, has Tennessee residency, or operates as an individual rather than an LLC. The only residential-zone exception is the hosted owner-occupied partial rental excluded from the STR definition entirely (where the owner lives full-time and rents only a portion of the home). The Old Hickory Lake waterfront premium attaches primarily to residential-zone parcels along Indian Lake Road, Bonita Parkway, Walton Ferry Road, and Sanders Ferry Road, which is why the city has faced sustained investor pressure and the prominent J and J Ventures enforcement matter - investor-owners purchasing post-2016 residential-zone lakefront properties to operate as STRs are categorically ineligible regardless of any primary-residence claim, and were the subject of the October 2024 permanent injunction (vacated and remanded by Middle TN Court of Appeals February 17, 2026 on factual grounds; underlying ordinance unaffected). The Tennessee Short-Term Rental Unit Act (TCA 13-7-602 to 13-7-606) provides statewide protection for pre-October-2016 legacy STR operators regardless of residency status - an out-of-state LLC that owned and lawfully operated a Hendersonville STR before October 2016 has the same legacy claim as a Tennessee resident individual operator, subject to the same termination conditions (sale or transfer outside the family, 30-month operational gap, or three or more violations of generally applicable local laws under TCA 13-7-603(a)(3)).