Austin, TX


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City Ordinance for Short Term Rentals in Austin, TX

Navigating the rules around short term and vacation rentals in Austin


Summary of the City:

Known as the live music capital of the world, Austin, Texas brings visitors from all over to visit for the well-known festivals like Austin City Limits and SXSW Music Festival.  However, the flow of visitors into short-term rentals in Austin’s neighborhoods has caused a backlash from neighbors who says they are having to deal with loud, boisterous parties. In addition, the city believes the increasing number of short-term rentals is decreasing the supply of affordable housing.  As a result, the city has enacted a list of short-term rental regulations, including a controversial decision to phase out non-owner occupied short-term rentals – which has resulted in protests and a lawsuit.



Main Takeaways:

    • The city currently regulates and licenses three types of short-term rentals: type 1, owner-occupied; type 2, non owner-occupied; and type 3, non owner-occupied multi-family.
    • The city is phasing out type 2 (non owner-occupied) short term rentals by 2022.
    • The controversial measure has been met with protests and a lawsuit.

 

Faced with the rise in short-term rentals and associated problems of increased disturbances, the Austin City Council passed ordinances to regulate the short-term rental industry in 2012; the city required short-term-rental owners to get a permit and pay hotel taxes and limited density to no more than 3 percent of any given neighborhood. The city currently regulates and licenses three types of short-term rentals: type 1, owner occupied; type 2, not owner occupied, and type 3, non-owner occupied multi-family.

In 2016, Austin residents showed up in large numbers at City Hall to complain that Type 2 units were party houses or mini-hotels operating in the heart of neighborhoods.  In addition, there were protests of citizens from the east side of town, who said that the traditional neighborhood environment was being destroyed as small homes were being demolished to replace them with large houses for short-term rentals.  In response, in 2016, the City council passed a that will ban Type 2 rentals, those that are non-owner occupied; current licensed operators will be phased out by 2022.

The revised ordinance has triggered lawsuits and legislative action. The Texas Public Policy Foundation sued the city, saying that the ordinance violated the U.S. constitution. On the city’s side, Mayor Pro Tem Kathie Tovo is a big supporter of the regulations, saying that it helps deal with a severe housing shortage in Austin. The Austin Neighborhood Council, which represents over 100 neighborhoods in Austin, is also in support of restricting the industry.



Is my STR legal?

    • Application with a $443 Fee
    • Proof of Property Insurance
    • Proof of Payment of Austin Hotel Occupancy Taxes
    • Certificate of Occupancy or Certified Inspection


Resources:

City of Austin City Council