Cabin Rentals in Blount County, Tennessee

The county's own zoning resolution sets vacation-rental-cabin density limits

Blount County's Zoning Resolution, adopted June 15, 2000, explicitly states its intent to permit vacation rental cabins as a use supporting the county's tourist industry -- then sets real numeric limits rather than leaving the question open-ended. In the R-1 Rural District, the maximum density of vacation rental cabins may not exceed the standard single-family residential density otherwise allowed in that district. In the R-2 Rural District, the cap tightens to roughly 0.5 units per acre on average across a single tract or development -- in practical terms, no more than one cabin per two acres, averaged over the whole property rather than lot by lot.

The resolution also addresses road infrastructure directly: up to 10 vacation rental cabins may be developed served by a gravel-surfaced road or drive, but any development exceeding 10 cabins must meet the full internal-road and infrastructure improvement standards the county requires of multifamily developments -- a real cost threshold that can change the economics of a larger cabin-cluster project. If you're assembling or subdividing land in unincorporated Blount County specifically for a cabin-rental development, both the per-acre density cap and the 10-cabin gravel-road threshold are worth running past the Blount County Planning Office before you finalize a site plan.

Townsend's own rules are separate -- and actively tightening

Property inside the Town of Townsend's incorporated limits falls under Townsend's own zoning ordinance, not the county resolution described above. Townsend requires an annual tourist-residence permit from its building inspector for any property used as a short-term rental. The push for tighter rules had a specific, documented trigger: in March 2026, Planning Commission member Harry McIntosh reported identifying more than 55 Airbnb listings operating inside Townsend's town limits, and said none of them appeared to hold the required local permit. That finding drove the Planning Commission's recommendation for a six-month moratorium on new tourist-residence permits, intended to give the town time to sort out enforcement against the unpermitted backlog before processing new applications.

Rather than adopting that moratorium as recommended, the Town Commission instead moved directly to a permanent framework: by late April 2026, Townsend had adopted Ordinance 360-26-1C, which does two things at once. First, it clarifies exactly which zones allow the use going forward -- the ordinance amends the list of prohibited uses in the R-1E Low Density Residential Exclusive Zone to specifically add short-term rentals, while adding short-term rentals to the list of allowed operations in the B-1 Tourist Business District Zone. Second, and more substantively, it creates a formal Short-Term Rental Unit Permit: a defined application and inspection process (covering required safety features) that a property must pass to legally operate, backed by a graduated enforcement scale for violations rather than an all-or-nothing shutdown. A property just a few hundred feet apart, on either side of an R-1E/B-1 line, can face opposite outcomes for the same intended new use -- confirm the parcel's current zone with Townsend's building inspector before assuming a permit is available.

One detail matters enormously for anyone buying an existing rental property rather than starting a new one: Tennessee's statewide Short-Term Rental Unit Act generally bars a city or county from applying a new local ordinance retroactively to a tourist residence that was already lawfully operating before the ordinance took effect. In practical terms, that means an existing, already-permitted short-term rental in Townsend -- including one sitting in the R-1E zone where the use is now prohibited for new applicants -- is very likely grandfathered and can continue operating under the borrower's existing permit, even though the same address couldn't obtain a new permit today. If you're buying specifically for the rental income, confirm directly with Townsend's building inspector whether the property you're evaluating already holds a valid, current tourist-residence permit predating Ordinance 360-26-1C, since that status -- not just the parcel's current zone -- is what actually determines whether you can keep renting it out.

What to verify before counting on cabin-rental income from a specific parcel

• Whether the parcel is inside the Town of Townsend (Townsend's own ordinance, Short-Term Rental Unit Permit, and zone rules apply) or in unincorporated Blount County (the county's R-1/R-2 density rules apply instead).
• For unincorporated county land: which rural district (R-1 or R-2) the parcel sits in, and whether the planned cabin density fits within that district's cap.
• For a multi-cabin development: whether the access road is gravel or paved, and whether the planned cabin count stays at or below the 10-cabin threshold before multifamily-grade road standards apply.
• For a Townsend parcel: its specific zone (R-1E prohibits new short-term rentals under Ordinance 360-26-1C; B-1 Tourist Business District allows them), and whether it needs a new Short-Term Rental Unit Permit or already holds one.
• For an existing Townsend rental you're buying rather than starting fresh: whether it already holds a valid, pre-Ordinance 360-26-1C tourist-residence permit -- Tennessee's Short-Term Rental Unit Act generally protects an already-operating rental from a new ordinance's zone restrictions, even in R-1E.
• Tennessee sales tax and lodging/occupancy tax registration, which is separate from any local zoning or tourist-residence permit and applies regardless of which jurisdiction governs the parcel.