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Council strikes right balance on short-term rentals

November 10, 2018

Short-term rentals have been a welcome addition to the vacation market. They are often cheaper than hotel and motel rooms, and can give travelers a sense of place in a city.

That said, short-term rentals are ostensibly hotel rooms, albeit in private homes and condos. That means rates should include hotel occupancy taxes. These rentals also have the potential to create neighborhood strife. These commercial enterprises are often set in neighborhoods where residents expect to live near neighbors, not tourists.

In passing regulations around short-term rentals, the City Council has struck the right balance. The regulations came with the support of short-term rental platforms, Airbnb and Austin-based HomeAway. But they also aim to address the concerns of neighborhoods.

The ordinance differentiates between types of short-term rentals. Type 1 rentals are owner-occupied. That is, the owner lives on the property. These are allowed anywhere.

Type 2 rentals are non-owner occupied. The owner lives elsewhere or is a corporation — and these are largely viewed as the source of neighborhood strife. Type 2 units will be limited to 12.5 percent of a block or larger multifamily development. Existing Type 2 rentals can be grandfathered in.

Short-term rental owners will have to register with the city and pay a $100 fee, and the city plans to establish an online system for property owners to pay the Hotel Occupancy Tax. It’s been estimated there are 2,000 short-term rentals, and many do not pay the tax.

This is a reasonable compromise that could serve as a blueprint for any possible state regulations. The key will be enforcement.

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