AUSTIN, Texas — Austin city leaders are looking at new rules for Airbnb properties and other short-term vacation rentals in the city – but they want to hear from the public first.
This isn’t Austin’s first attempt at regulating short-term rentals. Previous rules approved in 2016 were struck down by a court, which ruled that “the ability to lease property is a fundamental privilege of property ownership.”
“Due to recent court decisions, some of the regulations we have on the books right now are essentially unenforceable,” Daniel Word, the Assistant Director of Austin’s Development Services Department, said.
There are around 2,200 licensed short-term rentals in the city of Austin, but estimates are that there are thousands more in the area.
“We do believe the majority of short-term rentals in Austin are operating without a license,” Word said.
Between 2015 and 2020, the city stopped issuing Type 2 licenses, making it harder for hosts to register with the city.
In August 2023, the Western District of Texas deemed that unconstitutional. Since then, the city has re-started issuing Type 2 licenses. The STR license application costs $860, and the city processes it in 8 to 12 weeks.
“Not knowing how many are out there focuses our current enforcement efforts on trying to identify those operating without a license and bring them into compliance,” Word said. “If we can increase compliance through changes to our ordinance, that will allow our staff to focus more on the behavior of short-term rental operators rather than purely seeking the license requirement.”
The City of Austin defines a short-term rental as a property rented for less than 30 days. The proposed rules could regulate short-term rental owners and require rental platforms to collect hotel occupancy taxes.
Other changes include making short-term rentals an accessory use in all residential zoning districts. This means that rather than operating as a stand-alone type of land use, the city would shift the majority of the short-term rental regulations into the business code. As a result, short-term rental operators will be regulated as businesses rather than land uses.
“By regulating them as a business operation, it will allow us to be more nimble in the future if we need to respond to changes in the industry or changes in technology that would warrant a change to the ordinance,” Word said.
The city also wants to impose density caps on how close two properties owned by the same owner can be. If an individual wants to operate more than one STR in Austin, the rentals must be spaced apart by at least 1,000 feet.
“By having a distance requirement between a short-term rental owned or operated by the same individual, it’ll help to prevent entire city blocks being taken over by one individual and operating them all as a short-term rental,” Word said.
People who currently own a licensed short-term rental would be allowed to continue operating so long as their property does not become a nuisance.
City staff say these could help address issues like noise and parking at short-term rentals while looking at how those properties affect housing costs.
“With these proposed changes, we’re looking to encourage responsible ownership of short-term rentals, increase our compliance with licensing requirements, and positively impact the collection of hotel occupancy tax that is owed as part of these transactions,” Word said.
KVUE contacted several of the major short-term rental companies in Austin on Thursday to get their reactions to the changes.
“Vrbo, part of the Expedia Group family, supports balanced short-term rental laws,” an Expedia Group spokesperson said. “We are proud to be part of the Austin community and appreciate the progress the City of Austin has made to balance community needs, including a diverse and healthy tourism economy.”
Airbnb would support a hotel occupancy tax, similar to the company’s existing agreements with Houston, Corpus Christi, Plano, and several other Texas cities. Since its establishment in 2019, Houston’s hotel occupancy taxes have raised more than $25 million.
“We are reviewing the proposed changes and look forward to working with the City of Austin to develop fair, balanced short-term rental rules,” said Luis Briones, Senior Policy Manager at Airbnb. “We have long advocated for platforms to collect and remit local tourism taxes on behalf of hosts in Austin and support all efforts that respect the rights of Austin residents to earn extra money by sharing their home.”
City leaders will host several public meetings to discuss the new proposals starting next week.
Public hearings at City Hall:
- Tuesday, Feb. 4, 1 p.m. (Joint Planning Commission and City Council Meeting)
- Tuesday, Feb. 11, 6 p.m. (Planning Commission Meeting)
- Thursday, Feb. 27, 10 a.m. (City Council Meeting)
Information sessions:
- Tuesday, Jan. 21, 11 a.m. – 1 p.m. (Zoom)
- Wednesday, Jan. 22, 6-8 p.m. (Montopolis Recreation and Community Center)
- Thursday, Jan. 23, 6-8 p.m. (Permitting and Development Center)
- Monday, Jan. 27, 6-8 p.m. (Austin Central Library)
More than 725,000 Austin residents will get purple slips in the mail notifying them of the possible changes and public hearings.
City council members are expected to vote on the proposed changes before the end of February.