When Knoxville hotel rates climb, visitors often turn to Airbnb and Vrbo, and some of the city's newer condo developments are increasingly meeting that demand with short-term rentals.
While established condo buildings like Sterchi Lofts
have relatively few short-term listings, a significant share of units in some newer developments on Gay Street and in South Knoxville are being used as tourist rentals.The city of Knoxville and the state adopted ordinances in 2018 to manage short-term rentals, with Knoxville codes requiring owners to obtain a permit before listing their rental on sites like Airbnb or Vrbo. Short-term rentals are more restrictive in residential neighborhoods than in mixed-use developments like Lone Tree Pass on Gay Street, according
to the ordinance.
Knox News reviewed Airbnb, Vrbo and Zillow data for four condo developments and found wide differences in how many units are being used as short-term rentals:
- The Saint Townhomes (South Knoxville): 16 of 28 units (57%)
- Lone Tree Pass (Gay Street): 17 of 53 units (32%)
- Sterchi Lofts (Downtown): 14 of 100 units (14%)
- The Delaney (Covenant Health Park): No units listed on Airbnb or Vrbo
All but two of the 17 short-term rental units at Lone Tree Pass are owned by one of two companies, and nightly rates range from $130 to $500 depending on unit size and booking dates.
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Halo − which manages 72 short-term rentals in Knoxville − owns nine units at Lone Tree Pass. Haven Vacation Rentals − which operates 280 short-term rentals across East Tennessee, primarily in the Pigeon Forge area − owns six.
Downtown Knoxville condos can reach more than $1 million
Lone Tree Pass, which recently filled the 200 block of Gay Street with condos and restaurant space, is one of several upscale residential projects that have transformed downtown and South Knoxville in recent years.
Some condo units are hitting the market for hundreds of thousands of dollars, putting them out of reach for many residents in an area where the median household income is $54,039.
A two-bedroom condo on Gay Street is listed for about $1 million, for example, while a condo in the Old City is on the market for roughly $670,000. In South Knoxville, a one-bedroom unit of less than 1,000 square feet is listed for $415,000.
Lone Tree Pass, developed by Hatcher-Hill Properties, has 10 condos for sale, some of which have been on the market for more than a year. Prices range from $654,500 for a one-bedroom unit to $1,705,500 for a three-bedroom unit, according to Zillow data.
Knoxville's Community Development Corporation, the city's redevelopment arm, provided Hatcher-Hill a tax increment financing incentive, or TIF, to make Lone Tree Pass more financially feasible. A TIF uses anticipated tax revenue generated by the development to help cover some development costs up front.
How many short-term rentals are in Knoxville?
Short-term rental activity varies widely from building to building, depending in part on the rules set by condo associations and property owners. The city has around 300 active permitted short-term rentals, city spokesperson Eric Vreeland told Knox News.
Connolly Development Ventures finished The Saint Townhomes on Blount Avenue in 2024, and 16 of the 28 units are listed on Airbnb as short-term rentals ranging from $250 to $400 per night.
Four of the units, marketed as a convenient walk to downtown and Neyland Stadium, are owned by the same companies with a significant presence at Lone Tree Pass. A one-bedroom unit recently sold for $374,000, according to a Zillow listing.
Sophia Tiedge is the growth and transformation reporter for Knox News. Email: sophia.tiedge@knoxnews.com
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This article originally appeared on Knoxville News Sentinel: As new Knoxville condos end up on Airbnb, tourists are moving in | Exclusive
