City Council Approves Short-Term Rental Rules

Posted by on Jul 27, 2012 in Blog Posts | No Comments

From the Austin American Statesman:

By Farzad Mashhood | Friday, June 8, 2012, 01:03 AM

The Austin City Council gave preliminary approval to a set of rules for short-term home rentals early Friday, following nearly two years of civic debate.
The council’s rules, approved by a 5-2 vote, allow so-called commercial short-term rentals, homes that are not occupied by the owner, while setting a cap on how many of those rentals can operate within a certain zip code.
Opponents and supporters of short-term rentals packed City Council chambers late Thursday into Friday, taking turns to speak before a vote on new regulations for the rentals. The council heard about three hours of public testimony before considering a pair of proposals from council members.
The rules also allow a homeowner to short-term rent his or her home, or another home on the same property without getting a health and safety inspection, something a set of rules recommended by the city’s planning commission had called for.
Short-term rentals, which have become more common in many neighborhoods especially near downtown, have not previously been regulated in Austin.
Some council members expressed concerns with allowing the commercial rentals. A 3 percent cap on the proportion of single-family homes that can be short-term rented, for example, may create “an underground market of short-term rentals,” said Council Member Mike Martinez, who voted in favor of the rules.

Also, he said, when a zip code hits the 3 percent cap, the renters will go somewhere else. Council members will work out details on the 3 percent cap and other parts of the regulation in future meetings on the rule.
“We are really going down a new path by allowing commercial short-term rentals,” said Council Member Laura Morrison, who, along with Council Member Kathie Tovo, voted against the rules and proposed banning all commercial rentals while allowing residential ones.
Morrison echoed concerns by some neighborhood groups that allowing the commercial rentals depletes the city’s housing stock and hurts affordability of central-city homes, going against a long-term vision for the city outlined in the Imagine Austin plan.
Representatives of neighborhood groups opposed such home rentals, saying they are illegal because they allow residentially-zoned buildings to be used as businesses. But, they said owner-occupied homes that are rented only a few times a year when the homeowner is out of town, should be allowed.
“They’re frustrated by the lack of enforcement by city staff and they’re unified by the belief that commercial short-term rentals should not be permitted by the city,” said Dowe Gullatt, an Austin attorney who spoke for the neighborhood groups. “This is not about good operators versus bad operators, but about banning a commercial activity in a residential district.”
Real estate groups and those who rent their homes maintained that short-term rentals are not as widely problematic as opponents characterized them to be and that a city staff-backed recommendation to allow all short-term rentals, provided they are registered with the city, is enough of a compromise with neighborhood interests.
“We heard that we were bringing brothels into neighborhoods … that we were forcing people out of neighborhoods enough to force schools to close,” said Jay Reynolds, a founder of the Austin Rental Alliance.
Reynolds said short-term rentals provide the city with tax revenue; he also pointed to a city auditor report that found they produce fewer 311 and 911 calls than typical homes.
The council-approved proposal separates short-term rentals into the same two groups that the planning commission recommended about two weeks ago: homes that are owner-occupied, a registered homestead, and rented out less than 90 days per year or occupied by the owner for at least 270 days a year; and homes that do not meet all three of those criteria.
All homes would have to register with the city. The first group of homes would have to pay to get a health and safety inspection only if they don’t have a certificate of occupancy or have a safety-related complaint against them. The second group would require a conditional use permit, which requires a public hearing, and are limited by the 3 percent cap.

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