An investor calls with a plan that sounds reasonable on paper. Buy a lot in Wedgewood-Houston, take advantage of the 2021 upzoning that lets a single parcel hold three or four units instead of two, build small, and run each unit as a non-owner-occupied short-term rental. The neighborhood has the story to support it: a Michelin-adjacent dining scene, Soho House and Hermès already open inside the old May Hosiery Mills complex, an 18-acre AJ Capital project under construction blocks away. Every signal says WeHo is where Nashville's next wave of investment capital is headed.
Then the permit application comes back denied, and the investor learns the upzoning that got them excited was never a short-term rental story to begin with.
The Permit Question That Surfaces After You've Already Made an Offer
Metro Nashville splits short-term rental permits into two categories. Owner-occupied permits, OOSTR, let a resident rent out a spare room or the whole house while traveling, and they remain broadly available across residential zoning. Non-owner-occupied permits, NOOSTR, are the investor-grade category, and Metro's own permit rules restrict new NOOSTR issuance to commercial-adjacent, mixed-use, and Downtown Code districts. New non-owner-occupied permits are not issued in standard residential zoning categories including R, RS, RM, and AR2A, full stop, and that restriction applies citywide, not just in WeHo.
Wedgewood-Houston's residential core sits inside the R6 and R6-A zoning family, the same category the Chestnut Hill Urban Design Overlay upzoned in 2021. That overlay changed how many units a lot could hold. It did not move the underlying parcels out of the R zoning family that Metro's short-term rental ordinance blocks for new investor permits. A buyer who assumes more entitled units means more rentable Airbnb doors is combining two separate rulebooks that don't talk to each other.
The friction gets worse on resale. Existing non-owner-occupied permits in residential zones are grandfathered, meaning an operator who got one before the current rules took hold can keep renewing it. But that grandfathered status dies the moment ownership changes hands. Buy a WeHo cottage from a seller running a legal, income-producing short-term rental today, and you inherit the cottage, not the permit. You cannot reapply for a new NOOSTR permit on that same address once it sits in a blocked residential zone.
What the 2021 Upzoning Actually Changed
Before 2021, most parcels inside the Wedgewood-Houston and Chestnut Hill overlay boundary carried a two-unit entitlement under R6 and R6-A zoning. The city's own planning study, developed with Councilmember Colby Sledge and grant funding from the National Endowment for the Arts, up-zoned those same parcels to allow three to four units depending on lot size, explicitly to diversify housing type and cost in a neighborhood facing displacement pressure.
That's a duplex-to-quadplex story. It's aimed at long-term rental supply and for-sale housing variety, and it reads as good news for a builder targeting Nashville's rental market or a household looking for a smaller-footprint purchase near downtown. It was never written to unlock short-term rental capacity, and nothing in the overlay text changes which zoning family the parcels sit in.
More units on a lot changes what you can build. It does not change what you can legally rent to a stranger for three nights.
Where Hospitality Entitlement Actually Lives in WeHo
The parcels that do carry short-term or hospitality entitlement in Wedgewood-Houston are moving through a different zoning tool entirely: Specific Plan, or SP, rezoning, where a developer submits a custom site design and Metro approves conditions tailored to that exact project. Two live examples show what that looks like on the ground.
AJ Capital Partners broke ground on every component of Wedgewood Village in 2025, an 18-acre, 1.6 million-square-foot district that will keep building through 2027 and beyond. The plan folds in the AJ Capital-owned Nashville Warehouse Company building, home to the Memoir Wedgewood Houston apartment tower, alongside new construction at 515 Houston Street (a four-story building anchored by Momotaro with an Italian restaurant to follow), 507 Houston Street (Class A office with ground-floor retail), and 448 Humphreys Street. A residential ring of buildings with ground-floor retail circles a two-acre lawn anchored by the 1840s Merritt Mansion, once owned by members of Kings of Leon. Live Nation's 4,400-capacity venue, The Truth, is set to open this fall.
A second SP filing is moving through review for the historic United Record Pressing site, owned by Mark Michaels and his son Lucas Michaels. The 1.81-acre rezoning request, submitted by Barge Civil Associates on the family's behalf, would preserve the record-pressing building and its Motown Suite while adding a 14-story, 175-room boutique hotel, a nine-story condo building with ground-floor retail, and a six-story office building. The proposal went before the Metro Planning Commission on August 13, 2026.
Neither project is a private investor's short-term rental play. They're master-planned, institutionally financed developments where hospitality use gets negotiated into the zoning conditions themselves, not something a buyer layers on afterward. That distinction is exactly what separates WeHo's density headlines from its actual investment mechanics.
The Listing That Gives the Game Away
You can see this playing out in real time in how new WeHo construction gets marketed. One current listing for a unit at the Modernest WeHo development describes itself as one of the few new developments in Nashville where a non-owner-occupied short-term rental permit is actually obtainable. That phrasing only works as a selling point if the default answer, for nearly everything else built in the neighborhood since the 2021 upzoning, is no.
Three Products, One Zip Code
Part of what makes WeHo confusing to underwrite is that its headline price statistics are measuring three different products and calling the result one neighborhood median. Sales data for the three months ending in July 2026 put the median sale price at $725,000, up 27 percent year over year, while the average sale price across that same window sat at $620,000, down more than 4 percent. A median rising sharply while the average falls is usually a sign that a handful of larger transactions are pulling one number up while the bulk of activity skews toward something smaller and cheaper. That's consistent with what the underlying stock actually looks like:
| Product tier | Approximate price range | What it tells you |
|---|---|---|
| Older cottage and duplex stock | roughly $450,000 to $850,000 | The value tier, and the segment most exposed to the R-zone STR restriction |
| Condos and converted lofts | median around $689,900 as of June 2026 | Fastest-moving tier, averaging 36 days on market |
| New construction townhomes and larger builds near Wedgewood Village | roughly $700,000 to $1.2 million-plus | Priced closer to Gulch and 12 South comparables |
Active listings as of early August 2026 spanned $275,000 to just over $2 million, with an average price per square foot near $529 across roughly three dozen properties on the market at any given time. Ask what a "WeHo median" means before you use it to underwrite anything. It's likely describing a different tier than the parcel you're looking at.
Before You Underwrite a WeHo Purchase
- Confirm the specific parcel's zoning category directly with Metro Codes, not from the listing description or the neighborhood's general reputation. R6 and R6-A are not the same as MUL, MUG, or DTC for permit purposes.
- If short-term rental income is part of your underwriting, request written confirmation from Metro Codes that a NOOSTR permit is obtainable at that address, as a condition written into the purchase agreement itself.
- If you're buying a property with an existing short-term rental operation, verify whether the current permit is grandfathered in a residential zone. If it is, understand that it does not convey to you at closing and cannot be reapplied for once transferred.
- Separate the neighborhood's zoning story from its price story. Upzoned unit count, SP-zoned hospitality entitlement, and the sale price tier you're comparing against are three different variables, and conflating them is where most out-of-market underwriting goes wrong.
FAQ
Does the 2021 Chestnut Hill overlay let me build a short-term rental on an upzoned WeHo lot? No. The overlay increased how many units a parcel can hold under R6 and R6-A zoning. It did not move those parcels into a zoning category eligible for new non-owner-occupied short-term rental permits under Metro's citywide rule.
If I buy a WeHo property that's currently operating as a legal Airbnb, do I get to keep running it that way? Only if the seller's permit isn't in a blocked residential zone, or if ownership doesn't formally change hands in a way that triggers cancellation. Grandfathered non-owner-occupied permits in R, RS, RM, or AR2A zones are not transferable to a new owner.
Are Wedgewood Village or the United Record Pressing redevelopment open to individual short-term rental investors? Both are institutional, master-planned SP projects with hospitality use written into their own zoning conditions. They're not a vehicle for an individual buyer to acquire a unit and run it as a private short-term rental.
Zoning stories and pricing stories move on different clocks, and Wedgewood-Houston is proving that right now. If you're underwriting a purchase here, or trying to figure out which of Nashville's neighborhoods actually support your investment thesis, The Costigan Group works through the permit and zoning verification before you write an offer, not after. Book a consultation and we'll pull the actual eligibility for the specific parcel you're considering.
