A whole bunch of tiny homes like this one are available for short-term rental in Austin right now (image via Getty Images)
Short-term rentals can be a nice way to visit new cities because they allow travelers to stay in neighborhoods that aren't typically served by hotels. But they can be a nightmare to neighbors - loud parties late into the night, overflowing trash cans, and unresponsive owners/operators might be motivated to ignore neighborhood complaints because it's better for business.
Eighteen months after a federal judge struck down local rules regulating STRs in Austin, City Council is working toward adopting three new ordinances that will establish a new regulatory framework for the rental properties - a framework that Council hopes will address those common complaints while helping the city to benefit from the tourism STRs can attract.
At a Feb. 4 joint meeting of Council and the Planning Commission on the subject, staff laid out how the three ordinances would change STR rules in Austin. If adopted, STRs would be permitted as an accessory use in all residential zoning districts - but single owners would not be able to operate multiple STRs that sit within 1,000 feet of each other (percentage caps would be used for multifamily properties). New licensing standards will require owners to provide the city with a local contact who is required to respond to code enforcement within two hours if a complaint is lodged.
STR platforms (like Airbnb and Vrbo) will also have to start collecting the city portion of hotel occupancy taxes from licensed rental properties listed on their sites. Currently, the platforms do this for the state portion of HOT, but individual owners are required to tabulate the city portion of the tax and pay it on a quarterly basis. Staff is not sure how much new tax revenue this change will generate for the city, because they're not sure how many STRs are operating within the city without a license and thus not paying any HOT at all (there are 2,195 licensed STRs in Austin, but staff estimates that a majority of STRs operate without a license).
Overall, these regulations are primarily aimed at preventing licensed owners from operating nuisance properties and ferreting out unlicensed properties. City staff says 94% of 311 complaints on STRs involve an unlicensed property.
But staff acknowledged that even if Council adopts the three new ordinances, enforcement of the new rules will remain a challenge.
In last year's budget, Council approved new funding for the city's Code Compliance team to streamline the licensing process and provide more robust enforcement of STR regulations. A spokesperson for the Development Services Department said staff is working on a scope of work to solicit proposals from vendors that could improve the licensing process.
All in all, Council Member Ryan Alter said he is pleased with the direction the new regulatory suite is heading. "The combination of new ordinances we're working on and the work we're doing in parallel with more streamlined licensing and better performance will help owners, operators and neighbors," Alter said.
The Planning Commission will hold a second public hearing on the three ordinances on Feb. 11 and Council is scheduled to hold a third and final hearing on Feb. 27 - which is the earliest date Council could vote to adopt the ordinances. Alter said he hoped to have the new regulations implemented by the middle of 2025.