Legislatures will step in on short-term rental properties
The concept of local control is a funny thing. State government pushes back on the federal government. Local governments push back against the state.
“Local control” is often the argument used when a lower level of government disapproves of what is being imposed by a higher level. But the purest form of local control is one’s ability to use his or her own private property in the way they see fit.
In an ironic twist under the guise of “local control,” local governments across Texas continue to curtail the right to use one’s own property for the commercial gain available through utilization as a short-term rental, or STR, property.
Services like HomeAway and Airbnb provide a platform that allows homeowners to rent out their homes to visitors for days and sometimes weeks at a time. STRs are globally popular, with properties for rent in more than 200 countries and roughly 35,000 cities.
In Austin, a quick search for a STR for one night in February turns up more than 300 options for as little as $30 per night. High-end properties on Lake Austin can be rented for $3,500 per night. Homeowners have rented out their own properties since the genesis of private property, but STR services have organized these opportunities in a way that allows owners to maximize the extra-income opportunities of their homes to the benefit of tourists, travelers and visitors all over.
STRs have caused a disruption to the marketplace. They compete directly with hotels by offering comfortable homes at reasonable prices. There have also been complaints from other homeowners that visitors in neighboring STR properties can be loud and disruptive. While the degree of the problem is overstated, it merits a legitimate complaint when strangers cause a disruption in a family neighborhood.
City governments have responded to STR complaints by imposing burdensome ordinances, some better than others. Commonly categorized as Type 1 (owner-occupied) and Type 2 (nonowner-occupied), local ordinances tend to focus more on Type 2.
The city of Austin’s 2015 moratorium on Type 2 STRs, for example, completely removes the ability to rent out one’s own property unless the owner occupies it. Even then, it imposes advertising restrictions and occupancy limits, and prohibits certain types of gatherings and parties. San Antonio’s 2018 ordinance is far more reasonable, but it still prohibits Type 2 STRs beyond a certain density in residential neighborhoods.
To the extent that STRs pose any legitimate concern, those concerns can be addressed by treating homes used as STRs the same way that any other home is treated. That means reasonable restrictions on excessive noise, and ensuring the safety and legality of gatherings. STRs should not be given special treatment, but they should not be singled out for special scrutiny, either. These are residential homes, and they should be subject to the same rules as other residential homes.
With all the talk of “local control” coming from the cities and counties, it is interesting that the Texas Legislature will likely step in to restore local control to property owners under the regulatory thumb of those local governments.
Last session, Senate Bill 451 and House Bill 2551 would have prohibited local governments from effectively eliminating STRs.
In its 2019 report, the Texas Conservative Coalition Research Institute’s Free Enterprise Task Force again recommends pursuing legislation to protect the right of property owners to rent out their homes under a light-handed state regulatory framework, one that supersedes a patchwork of onerous local regulations.
It is unclear what form legislation on this issue will take in the 86th legislative session, but it is coming. The cities have once again forced the Legislature’s hand on restoring “local control” to its rightful place.
Russell H. Withers is general counsel and senior policy analyst at the Texas Conservative Coalition Research Institute, a public policy organization based in Austin.