Kentucky State House passes bill aimed at Lexington’s short-term rental regulations, no action yet from State Senate

Map of short-term rentals in Lexington as of January 2024.

Last Friday, the Kentucky State House passed Senate Bill 61 (SB 61), which aims to prevent cities from regulating the density of short-term rentals (STRs). SB 61 originally was focused on minor adjustments to state regulations on private swimming pools. Last Thursday, Speaker of the House David Osborne filed an amendment adding language targeting cities’ ability to regulate short-term rentals.

If passed by both Chambers of the Kentucky State Legislature, SB 61 would override and cancel Lexington’s recently passed STR regulations that aim to prevent STRs from concentrating too closely together in local neighborhoods.

In 2024, Lexington passed a new set of regulations for STRs that limit the density of STR units in the following ways:

• A new unhosted STR unit cannot be located within 600 feet of another unhosted unit.

  • An unhosted unit is a rental where the owner of the property does not reside on the property.

• A new unhosted STR cannot be approved if 2% of housing units within 1,000 feet are currently unhosted STRs.

  • Some exceptions are included for units that are directly adjacent to commercial zones.

These restrictions would be illegal and unenforceable if SB 61 passes the Senate and is signed by the Governor.

SB 61 would also require the City to approve applications, licenses, and conditional use permits for short-term rentals within 30 days of the application’s filing date.

Conditional use permits — which are primarily administered to unhosted units in Lexington — could only be denied if the STR would impact the safety, health, and well-being of the neighboring area. The bill cites traffic and noise issues as potential reasons for denial.

The bill was passed in the House on Friday, but was not passed by the Senate. Friday was the last day to pass bills before the Governor’s veto period, which lasts until March 26th and gives the Governor the opportunity to veto any bills passed so far by the legislature.

The Senate could pass it on March 27th or March 28th when they come back into session after the veto period. However, Governor Beshear would be able to veto the bill. If he does, then the legislature will not be able to override the veto because they will not be coming back into session after the 28th.

In other words, if the bill is passed by the Senate but then vetoed by the Governor, the bill will not become law and Lexington’s short-term rental regulations will not change.

While CivicLex doesn’t typically cover state legislation, we do provide context on items that impact LFUCG policy. As such, we will provide updates on SB 61 as they arise.