Want to Rent Out Your Condo? Check Out These City Council-Imposed Restrictions First

The Austin City Council is now regulating the short-term rental of homes that are not classified by their prospective owners as their homestead of main dwelling. 

Austin homeowners looking to rent out their houses for fewer than 30 days must obtain a license costing $285—$235 for a renewal—in one of three different categories, Type 1 and 1A, Type 2, and Type 3, depending on the type of property they will be renting. They also must pay hotel occupancy taxes.

Zaatari applied for a Type 2 license, which is for residential rentals the owner doesn’t claim as his or her main dwelling, or homestead, according to city regulations.

In November 2015, the Austin City Council placed a temporary moratorium on new licenses for Type 2 short-term rentals. In February, the City Council voted 9-2 to amend the law and implement new regulations for those rentals, including a ban on them by 2022.

The council’s new rules created an occupancy limit of no more than 10 related adults or six unrelated adults in a short-term rental and prohibited “outdoor assemblies”—weddings, bachelor or bachelorette parties, concerts, or “group activities other than sleeping”—from 10 p.m. to 7 a.m.

Outdoor gatherings of more than six adults also are prohibited from the hours of 7 a.m. to 10 p.m. And the new rules allow inspectors to enter and survey properties “at all reasonable times.”

‘Silly Restrictions’

In response to the new rules for Type 2 short-term rentals, the Austin-based Texas Public Policy Foundation filed a lawsuit challenging the constitutionality of the regulations.

“The ordinances infringe upon the rights to privacy and assembly,” Robert Henneke, general counsel for the group, told The Daily Signal. “It prohibits more than six people from being outside a short-term rental, period. Any time of day. Any activity—barbecue, wiffle ball game, sitting around a pool. More than six people is a violation.”

Henneke said the City Council’s revisions not only are unconstitutional but unnecessary, since the city already has ordinances on the books to address noise and disturbances of the peace.

“Enforce the rules you have, don’t come up with silly restrictions that target one use of a property,” he said. “There may be one or two bad operators from time to time, but instead of using existing ordinances and existing rules to deal with the outliers, the city has come in and chosen to target an entire industry that is operating lawfully.”

A representative for Austin Mayor Steve Adler, a Democrat, said the mayor could not comment on the short-term rental ban because of the ongoing lawsuit.

However, Austin Code Director Carl Smart said in a previous statement that the City Council was aiming to help the city to “better manage vacation rentals and to better respond to inappropriate behaviors” at rental properties.

Zaatari, though, said the vast majority of property owners who have short-term rental licenses are law-abiding citizens. To address renters’ potential inappropriate behavior, Zaatari asked his neighbors to reach out directly to him with problems.

Over the last nine months, he said, he has yet to hear any complaints.

“We don’t want to turn our neighborhoods into frat houses. This is not a place for me to go and make a party house, and we’re being portrayed as doing that,” Zaatari said. “Maybe some people do that, but I don’t think it’s at the level where it needs to be regulated.”


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