New ordinance on rental terms have some concerned

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MEMPHIS, Tenn. -- Juliet Jones has been running an Airbnb service out of her guest bedroom at her East Memphis home for five years.

"I've had guests from many many foreign countries: France, Germany, Australia," she said.

But things could soon change.

Tuesday night, the Memphis City Council passed an ordinance regulating short term rental properties.

However before the ordinance officially goes into affect, some "red tape" as council members called it has to be removed.

Members plan to spend the next few weeks officially sorting that out. A $100 permit fee will be removed.

Only hosting a few guests a month, Jones considers herself far from a hotel. At around $50 per night last year she made about $6,000. But now she has concerns.

"I don't want to price myself out of the market."

New regulations add a 3.5% tax to those running their short term rental property.

"As well as that there's a $2 per night that you have a guest at that home so all of that on $50 a night seems a lot. Plus we are not hotels," she said.

After sales and other taxes, things can really add up which means Jones' rental fares go up. Rental property owners also have verification of insurance for hazards like fires no less than a million dollars per occurrence.

"That has been hard to find because when you try to get insurance for a private house where we live which is my case, they say, 'oh you're running a business.' Well then we have to charge you a lot more." Luckily, Jones believes she's secured insurance.

In order to regulate these short term properties, a full time staff member would need to be hired, which had some council members asking questions.

"Is it actually generating revenue for the city? We are going to go through a lot of red tape to put regulations in place," said Council member Worth Morgan.

Memphis has about 300 Airbnbs which is less than other sister cities. Jones said she understands paying fees and taxes and has no problem with it, but doesn't believe she should be taxed at the level of hotels.

As changes are made to the ordinance WREG will keep you updated.