Lux building bypasses Nashville's short-term rental laws by shifting units to hotel rooms (2025)

Elliston 23 in the West End is phasing out short-term rentals after a teen was shot at a party in one unit.

In Nashville’s prime West End neighborhood, monthly rent for a two-bedroom apartment at the luxury Elliston 23 starts at around $2,500.

But until recently, those luxury costs came with a revolving door of neighbors in short-term rental units decked out with neon signs and pink bunk beds primed for a bachelorette party weekend.

And the guests weren’t always neighborly.

Exacerbated residents in Yelp reviews, Reddit threads and emails to The Tennessean said the complex in recent months had become overrun with short-term rental guests leaving trash and making noise at all hours.

The problem came to a head just after midnight on May 29 when a teen boy was shot and seriously wounded at a party in one of the short-term units.

Elliston 23 in a statement last week said it is now phasing out short-term rentals and expects to end all contracts this month.

But the issue highlights the tension for many Nashville residents as the city continues to grapple with oversight and regulation of its booming short-term rental market.

As the industry evolves, Nashville could face a new type of issue.

A review of city records shows that Elliston 23’s units weren’t subject to the city’s short-term rental laws because they had been converted to “hotel rooms” under zoning permits.

The move allowed the building to skirt the city’s short-term rental regulations in favor of oversight by the Tennessee Department of Health, which regulates hotel rooms.

It’s legal, since the area is zoned for hotels and mixed-use buildings. But these hotel-type apartments could become a problem in some neighborhoods if their numbers grow and impact the quality of life for long-term residents, said At-large Metro Council member Burkley Allen, who has been key in shaping the city’s short-term rental laws.

“It’s always interesting to discover what someone will think of to get around whatever we’ve put in place,” she said.

A ‘Penthouse Paradise’

The Airbnb ad describes a “Penthouse Paradise ” with skyline views, pink checkered accent walls and a neon sign saying: “Nashville looks good on you.”

The listing in the Elliston complex was active as of Tuesday, with nights going for about $400 for the two-bedroom rental through July. The listing includes a photo of the unit’s Tennessee Department of Health permit, which expired in June.

It’s been less of a paradise for some residents, who said they were never informed of the complex’s short-term rentals when they signed their leases.

City records show the luxury building at 2312 Elliston Place near Centennial Park previously had racked up multiple city code violations for operating short-term rentals without a permit.

Following a string of injunctions, the city in 2019 took the listed building owner, the Ohio-based GL Elliston 23 Apartments, LLC., to Davidson County Environmental Court where a judge permanently enjoined the company from operating and advertising short-term rentals in the building, according to court records.

The building in June 2022 sold for $162 million to the San Diego-based Sunroad Enterprises, according to property records.

Later that year, records show the building owners applied for a city permit to convert more than two dozen units for “hotel use” by the company CozySuites, which manages short-term rentals across the country. The city approved the permit in January 2023.

Metro Codes Department spokesperson Will Dodd said the building’s new owners would have had to reapply for a non-owner occupied short-term rental permit with the city.

But since the units are designated as hotels, they don’t fall under the city’s perview.

Hotel units are still subject to state regulations and some local penalties, like city noise ordinance violations, but the city has stricter regulations for its short-term rentals, Dodd said.

For example, Nashville requires a person to be 21 years or older to rent a short-term rental, while the state allows anyone 18 and up check into a hotel, though individual hotels can set their own age limits.

Dodd said he isn’t aware of other apartment complexes designating some of its units as hotel rooms, but the city is keeping an eye on such practices.

“It’s a unique situation and we’re still reviewing the process ourselves,” he said.

Elliston 23 did not respond to questions as to why it opted to convert some units to hotel rooms. In a statement, building ownership said it’s focused on safety as it phases out short-term rentals.

“For the remaining weeks, we are committed to maintaining courtesy patrols on-site to enforce community rules and regulations,” the statement said. “We appreciate the community's understanding during this transition.”

Regulating a growing market

As tourism skyrockets, Nashville for the past several years has battled to regulate its short-term rental market, sometimes conflicting with state lawmakers pushing for property owner rights.

In 2018, the Metro Council voted to phase out non-owner occupied short-term rentals in residential areas, following concerns about housing affordability and quality of life.

The ban, which took effect in January 2022, didn’t affect owner-occupied permits that allow residents to rent out rooms in their homes.

While the city has slowed the growth in residential neighborhoods, the number of short-term rentals has grown overall.

As of July, the data aggregate site insideairbnb.com reported nearly 9,000 Airbnb listings in Nashville. Of those, 70% of owners had 10 or more listings.

Allen, who introduced the bill that curbed rentals in residential areas, said the regulatory process has been trial and error.

While the new law has protected some neighborhoods, Allen said it’s also led to a growing number of non-owner occupied short-term rentals in multi-family buildings.

“We were one of the early adopters of regulations, and I don’t think we’re through,” she said.

As Nashville continues to grapple with short-term rental growth, Allen said the next step is greater enforcement of the city’s noise ordinances.

The city’s nightlife director, a position added in 2022 to address the surging nightlife industry, is now focused on responding to noise complaints on nights and weekends, which Allen said can improve compliance and quality of life for residents.

As for any new regulations to the short-term rental industry, Allen said the city will need to think carefully.

“I think we have to move slowly and thoughtfully any time we make a move that's perceived as taking away property rights,” she said. “Because that gets the attention of some state legislators who feel like they need to intervene at the state level.”