AUSTIN, Texas — A new ordinance requiring short-term rental properties to pay an 11% hotel occupancy tax went into effect on April 1, tasking platforms like Airbnb and Vrbo with collecting the tax on behalf of property owners. While the change aims to regulate the industry and fund city services, some property owners said it’s already causing disruption.
Blake Carter, cofounder of Cribs Consulting, which manages and owns about 85 properties in Austin, told KVUE the cost is currently being passed to the customer.
“Right now, it looks like the platforms are adding it to the guest side so that the guests are paying more,” said Carter. “But I mean, it’s all supply and demand, so that is going to make rates fall as properties become more expensive.”
Previously, Carter said only permitted properties were subject to the tax. Now, all short-term rentals must comply.
He said while profit margins may remain stable for some, others may need to lower rates to stay competitive.
“It’s kind of an advantage to properties now that are in the ETJ or out in the suburbs. They can kind of maintain their rates but still be priced the same as if they were in Austin, essentially,” Carter said.
Austin City Council Member Vanessa Fuentes, who represents District 2, said this was a step toward addressing unlicensed short-term rentals and their impact on affordability.
“The issue is that we have these corporate-owned STRs that come into our city that buy up entire blocks,” Fuentes said. “We don’t have a way to contact them, and they’re buying up affordable housing stock and it’s having an impact on our affordability levels.”
This ordinance marks the first of several anticipated changes in the short-term rental industry, including city-issued permits. Council members said they are waiting to see if the Legislature passes any bills that regulate short-term rentals in Texas and will look to review local regulations after the session ends.