City Council regulates short-term rental terms

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Photo Credit: Chelsea Purgahn | Daily Texan Staff

A one-year ban will be placed on applications to rent houses for a short-term period after the Austin City Council voted 9-1 on Sept. 17th.

The City Council passed the ban as part of an effort to place more regulations on short-term rentals and put a stop to “party houses,” which have occurred particularly in residential neighborhoods, such as West Campus. However, an official ordinance to enforce the ban will take a few months, according to the City Council.

The City Council also considered other stricter regulations for short-term rentals that aren’t owner occupied, called Type 2 rentals. Type 1 rentals, where owners only rent out the residence for part of the year, such as during Austin City Limits, will not be affected by the ban.

Austin Mayor Steve Adler said many owners of short-term rentals do not license their residences with the city.

“Maybe we’ll now capture a lot of people that haven’t signed up before that will now come within our licensing operation,” Adler said. “Recognizing that anybody that signs up in the next month are going to have to comply with these rules. It’s not like if they sign up before the rules, they get out of the rules — they’re going to have to do the rules.”

Kristen Hotopp, supporter of stricter short-term rental regulations, said in a testimony that there are many more “underground” Type 2 short-term rentals than are legally licensed to operate. Hotopp said more short-term rentals means there are less residential houses on the market, which is harmful because of the increasing scarcity of affordable housing.

“Anyone concerned about affordable housing, loss of public school funding, density as a mechanism for reducing traffic and urban sprawl and other critical issues here in Austin should also be concerned about the proliferation of commercial [Type 2 short-term rentals],” Hotopp said.

The City Council supported propositions, including more stringent inspections of short-term rentals during the application and license renewal processes as well as a prohibition against a high concentration of short-term rental residences within a certain distance of each other.

At a special meeting held Tuesday, council members voted in support of enforcing new occupancy limits that call for no more than six unrelated guests, no more than 10 guests total and no outside gatherings allowed after 10 p.m. to discourage “party houses”.

The City Council also discussed other regulations including the restriction of short-term rentals to commercial areas less populated by single-family residences and the formation of a special Austin Police Department task force to respond to noisy house party complaints.

Council member Kathie Tovo, who advocated for stricter code amendments on short-term rentals, said because the residences are operated for-profit by off-site owners through rental listing agencies, such as Airbnb and HomeAway, they are essentially the same as hotels.

“The reality is anyone who is currently breaking our laws and hasn’t registered their short-term rental will have a good month and a half, at the very least, to get that paperwork in order,” Tovo said. “And, frankly, they could have done it long ago if they’re operating illegally.”

While the City Council voted to pass these proposed regulations, new regulations will be drafted with the ordinance and will be returned for a final vote in a few months.

Correction: The original article incorrectly identified HomeAway as HomeWay.