Knoxville city leaders presented a proposed ordinance for short term rentals through online services like Airbnb at a public meeting Tuesday night. 

The draft ordinance would require people who rent their home or apartment to other people for fewer than 31 consecutive days to have a permit and business license.

The permit fees would be $70 for owner-occupied short-term rentals and $120 for non-owner occupied short-term rentals, in addition to a $15 business license. The permits could be renewed annually for $50. 

City officials say short-term rentals are not currently covered by an existing city ordinance, and the proposed ordinance would level the playing field for short-term rentals and hotels and motels. 

MORE: Possible Airbnb ordinance strikes balance for Knoxville hosts

"The first thing is we want to be allowed to find a way for people to operate short-term rentals," said Bill Lyons, chief policy officer and deputy to Knoxville Mayor Madeline Rogero. "Then we want to find a way to do so that would protect neighborhoods, and third we want fairness with the hotel/motel industry."

Lyons said short-term rentals like through Airbnb has been a "rapidly changing phenomenon" similar to the rise of food trucks and ride-sharing services like Uber and Lyft. 

"With the advent of short-term rentals ... we found ourselves with them not existing according to ordinance that we now have," he said. "They're existing outside of any kind of framework." 

"It is an individual residence, but the zoning code specifies residential zones and commercial zones, and of course, people in residential zones are there for the purposes of their own living, not as a commercial enterprise," Lyons said. "Zoning code always regulates usage and protects neighborhoods, so this is just an extension of that."

Meanwhile, state lawmakers are considering a bill that would remove the ability of local governments to regulate short-term rentals. A Senate committee voted to pass the measure Monday. The House local government committee will take it up next Tuesday.