Apr 24, 2017

Austin’s Efforts to Curb Short-Term Rentals Fail to Budge Long-Term Controversy

Reporting Texas

Austin homeowner David King views the city’s growing short-term property rental market with frustration. King, a former president of Austin Home Alliance who lives in the Zilker Park neighborhood, says noise and trash are just some of the effects that come when visitors inhabit properties where the owners don’t live full-time.

“[It’s] taking homes away from families, and this is impacting our schools’ enrollments,” King said. “People don’t want to live next to [these] homes. They have no place in residential areas.”

The city of Austin has been trying to regulate short-term rentals since 2012, but a small enforcement staff hasn’t been able to keep up despite subsequent changes in the law. Owners are willing to take the risk in renting short-term because of the low probability of getting caught and light or no penalties if they do.

The city’s efforts to deal with a hot-button issue that roils many Austin neighborhoods could be rendered moot if legislation in the Texas Legislature passes, preventing cities from regulating rentals of less than 30 days.

In 2016, the city tightened regulations on short-term rental properties, resulting in a 68-percent drop in licenses granted compared with a year earlier. But 1,500 properties are currently for rent, according to the property rental website HomeAway. HomeAway and Airbnb are the two leading temporary rental sites. While some of these properties are licensed, it’s still over five times the number of licenses issued for non-owner-occupied rental.

Citations issued for short-term rental violations increased dramatically in 2015, when the city said it started to take short-term-rental issues more seriously — three years after the City Council first put regulations in place. The city’s Code Department issued 45 citations in 2015, compared with a handful issued in each of the three previous years, according to city data.

“We increased our response time, which may have increased the number of violations issued,” said Austin Code Department Coordinator Jeff Libby. “Now our response time is within 30 minutes.”

Code enforcement officers also started working weekends and began searching online for unlicensed properties on sites like HomeAway and Airbnb. With only two full-time enforcement officers on the payroll, however, the city has had a hard time making progress on curbing unauthorized rentals.

“I started renting out my home for the last five years,” said an East Austin property owner who asked not to be identified because she is violating the law by renting her home without a license. “But I only rent out my home during South by Southwest because it helps pay rent; I haven’t had any issues [with code officers] and the renters have been respectful.”

Fewer than 10 percent of those who receive citations end up getting fined, according to city data, and only three licenses have been suspended since regulation began in 2012. City Code enforcement officer Alan Guyton says this is because people usually end up complying with the citation.

“Since I started working about three years ago, [the code department] has not issued many fines because I think people go into compliance,” he said.

The city cut $2.3 million from its budget for the investigations division, which houses rental enforcement, in fiscal year 2016-17 ending in September, according to city records.

The Center for the American Future, an Austin-based conservative think-tank associated with the Texas Public Policy Foundation, has brought suit against the city for its short-term rental law — not for alleged ineffectiveness, but on constitutional grounds. Think-tank attorney Chance Weldon, who is litigating the case, says the law oversteps renters’ expectation of privacy.

“Code compliance can come knock at your door and search your home at eight in the morning, for example,” he said.

Libby says code officers cannot go into someone’s home despite the new ordinance. Officers “never enter a property without permission or a warrant,” he said. “Austin Police Department is typically present when there is a warrant.”

A law aimed at easing regulation of short-term rentals is working its way through the Legislature. Sponsor Sen. Kelly Hancock, a Republican from Fort Worth, says SB 451 would prevent a ban of short-term rentals by municipalities. He says nuisances like noise and trash at rental properties can be dealt with through existing ordinances.

“For example, if a neighbor is too loud at night, they are subject to a nuisance code violation and should get a ticket,” Hancock said in a press release.

An amended version of the bill passed the Senate on Apr. 18, and has moved to the House. The bill would limit cities from regulating rentals of fewer than 30 days.

Whatever happens, homeowners like East Austin resident Tracy Smith remain frustrated. Smith knows of two non-owner-occupied homes for rent on her street and says she’s tired of dealing with the uncertainty short-term rentals can bring to her neighborhood, especially if code enforcement is unreliable.

“I have to look up if a home is licensed or unlicensed, and I’m sick and tired of people coming into the neighborhood like that,” she said.