Vacation Rentals in Austin – Good or Bad?

by Steve Crossland, REALTOR in Austin TX on January 30, 2011 · 58 comments

Last week I attended the VRBO “stakeholder’s meeting” held by the city of Austin. The meeting was the first in response to growing complaints from neighborhood groups and individuals about the burgeoning VRBO (Vacation Rental by Owner) business in Austin. There were over 100 attendees representing both sides of the debate, as well as some just there to listen, like me. The discussion was lively.

The Anti-VRBO Point of View
Imagine living next to or across the street from a VRBO house in Austin. This home is essentially a guest house for vacationers, year-round. You’re nowhere near a lake or vacation spot. You live in Allandale, or Barton Hills or Travis Heights. Each year, you witness a parade of 50 or more different groups, in and out of the home – every weekend – coming to enjoy UT football, ACL Fest, South by Southwest, and any number of other Austin attractions. Even if the visitors don’t cause problems, have loud parties, or otherwise bother you, you’d still probably rather have a family or other permanent residents living in the home. You’d rather have actual neighbors in your neighborhood instead of a constant stream of strangers on vacation or visiting locals.

The Pro-VRBO Point of View
Imagine you own a home, well located in central Austin. Perhaps you inherited it from a parent, or you purchased it many years ago and kept it as a rental when you moved to the suburbs. For whatever reason, you’d like to hang on to it. Because of the high property taxes, it doesn’t work well financially as a long term rental anymore, with taxes and insurance alone eating up more than half the gross annual rents.

You’ve learned about this new way of making money on a rental property called short term or “vacation” rentals. You decide to fix up the house, make it pretty, furnish it with nice stuff, and you post it on a website such as Austin-based HomeAway.com as a vacation rental. You start booking stays for $600 per weekend or $900 per week, with a 3 night minimum. You visit the house every turnover, keep it looking good – in fact one of the nicest looking houses in the neighborhood now. You’re not breaking any laws (though this is debatable – more on that later) and you’re paying the required state hotel tax to the comptroller. Thus, you want your neighbors to mind their own business and stop griping. You don’t want others telling you what you can and can’t do with your property.

That’s both side in a nutshell, though it does get more complex than that.

“Non-transient” use of residential property is forbidden by city zoning rules in Austin, except for Bed and Breakfasts, which are strictly regulated. The term “non-transient” seems unambiguous, and most would agree that anything under 30 days is a short-term stay in a residential home. This 30-day standard is accepted nationwide.

Yet the city is clearly not moving to enforce this nor is it trying to shut down VRBO homes in Austin. Instead, it has embarked on this study, starting with the 1st stakeholder forum, to try to figure out what to do and how to do it. So, for now, the operators of these vacation rentals are, interestingly, either breaking or not breaking a rule that may or may not exist because it’s up to the city to interpret how it wants to treat the definition of non-transient. If I owned one of these, I’d hold tight and keep doing what I’m doing. If I was thinking about investing a lot into one of these, I’d hold off until I knew what the rules are going to be. There may or may not be amnesty for existing properties, depending on what the rules become.

Having heard from many of the VBRO owners themselves during the forum, it’s clear to me that the majority are clean operators conscientious of potential impact on neighbors and careful to enforce their own rules such as not renting to people under age 25, restricting the number of vehicles, and having written contracts that spell out the terms and conditions of the stay.

Having also heard from some neighbors of VRBO properties, it’s clear that these homes are a terrible nuisance in at least some cases, creating parking issues, noise and excess trash and debris. Calling 911 doesn’t solve the problem. Neither does reporting the property to city code enforcement. So these neighbors are angry and, in some cases, just want these homes banned entirely.

But an outright ban didn’t seem to be the consensus rising from the general comments, nor does it seem to be the direction the city wants to take this.

My prediction

This will probably take 18 months to 3 years to sort out, as Austin city government is slow. But, eventually, vacation rental homes in Austin will be regulated. Owners will be required to register the properties, collect the proper hotel taxes, and adhere to some new code standards specifically addressing VRBO homes. These standards will most likely include parking restrictions, occupancy limits, and the requirement that the owner be local or have local management handling the home so that there is always someone nearby to handle problems should they arise. There might also be a restriction, similar to Bed and Breakfast zoning, that prevents too many of these homes from clustering together on one street. B&Bs in Austin can be no closer than 1,000 feet from another. This “no clustering” rule, which I think would make a lot of sense, is why I’d hold off before jumping into this business.

There may also be tiers of use and exemptions. For example, if I want to swap my home for 2 weeks with a home owner in New York City, but I’m not advertising or operating a full VRBO home, that should NOT be regulated. Also, in Boulder for example, anyone renting their home out for less than 15 nights a year is exempt from Boulder’s VRBO regulations. This would allow people who want to clear out and rent their Zilker condo or home home just once a year for ACL Fest to be able to do so without having to conform to the VRBO regulations (though the comptroller may still want to get paid a hotel tax). I know there actually are people who opt in to this sweet “payday” every year, but have no desire to be in the VBRO business per se.

These are just my guesses and I’ll be following this and attending all the meetings as it unfolds.

As with many things, the Internet has made this business more possible to more people than in the past. Also, Austin has become a serious entertainment destination due to the amount of live music nightly, the number of big events such as ACL Fest and SXSW, and numerous other lesser known events that draw fairly large numbers of visitors to Austin.

Also though, as was pointed out by many of the owner/operators of VRBO homes, a large number of the clientelle is not entertainment related. Many families come to Austin for weddings and other events. Some talked about high tech workers who take frequent recurring assignments in Austin. One has had a high tech guy stay 1 week 6 different times in the past 6 months. He’d simply rather not stay in a hotel and wants to do his own cooking. Another woman had brought her autistic child to Austin for a 6 week therapy, and having a home environment to stay in was very important to her and her child.

So, VRBO homes in Austin serve a very apparent and legitimate market need. Do I want one next door to me? No, I’d rather not. Do I want them to be banned? No, that would be stupid. Austin would be dumb to interfere with this legitimate market niche. Hopefully as the process continues, a solution can be found that doesn’t hinder or hamper the clean operators but puts into place minimal and reasonable regulations sufficient to protect the rights of home owners who are next to or near these homes.

1 Ray January 31, 2011 at 9:17 pm

Thanks for a well balanced article.

I think the city would be very dumb to regulate this burgeoning relatively new sector out of town. Imagine that the school board shuts exemplary schools such as Barton Hills and Zilker and the city also shuts off this source of revenue for owners and local business – that would be doubly dumb!

I wonder if any of this focus on VRBO is as a result of the hotel industry lobby?

2 Steve Crossland, Austin REALTOR February 1, 2011 at 8:52 am

Hi Ray,

The hotel industry didn’t start it. It was the Allandale neighborhood, 1 guy in particular, and also a Travis Heights resident who has suffered ongoing problems, including having his driveway blocked multiple times and having to put up with parties.

By and large though, these seemed to be the worst examples and most VRBO owners claim to have never received any complaints nor known of any problems caused by their guests.
Steve

3 M1EK February 1, 2011 at 9:18 am

This “driveway blocked” complaint is used against so many issues regarding density and infill – and it’s a load of crap. Your driveway can be blocked whether your street is purely single-family or not; and the solution is the same in all cases: call the cops and get the car towed.

And “having to put up with parties” – of course we all know that single family homes not being used as vacation rentals NEVER have parties.

4 Steve Crossland, Austin REALTOR February 1, 2011 at 9:47 am

Hi M1EK,
Yeah, driveways can be blocked by regular rentals with too many roommates, occasional parties, etc. also. But it’s not as simple as calling the police. Testimonials from people (at the hearing) who call the police say that it takes anywhere from 1 to 5 hours for them to show up for this sort of complaint. And they don’t call in to get the car towed, they just get the people to move it if they can find them.

I think the main point of the neighbors is that vacation rental homes catering to large groups should have enough parking. Some of these homes double as party rentals for birthdays and such. In fact, I just recently was searching online for a venue to host my daughter’s 18th birthday party, as she wants to invite a lot of friends. We ended up finding a suitable commercial venue but I came across several “homes” that host large gatherings and parties with the food catered, etc, that are located in non-commercial areas. Not a VRBO pre se, but another example of we’re seeing commercial use creep into residential neighborhoods.
Steve

5 Julie February 1, 2011 at 10:21 am

Thank you for a very thoughtful, non-biased article showing both points of view. I am totally torn on this issue as well. I can see the appeal of renting your house now and then, but I also have friends that are spending hundreds of thousands of dollars to properly renovate and run a B&B. As they pointed out to me, it is unfair for them to be undercut by people who don’t have to adhere to any of the rules and regulations that a hotel/motel/B&B has to follow, and who are not paying proper hotel taxes. And I think there is a major difference between renting your house out for ACL or SXSW once or twice a year or doing a “house trade”, and owning a house that you use exclusively for short-term rentals.

This is going to be a contentious issue, and I think regulation and enforcement, but not an outright banning, is going to be the final, and probably right, solution.

6 Greg February 2, 2011 at 6:27 pm

It definitely sounds like a case of a few poorly run VRBOs ruining it for the bunch.

It seems to me that all the complaints towards a vacation rental apply to unruly neighbors that are owners or long term rentals. Maybe the only difference is it’s harder to enforce the rules when the short term rental tenants are there just for a weekend?

If these enterprising VRBO owners are buying and renovating houses and generating tax revenue, I say let them go for it – our economy needs it! Thanks Steve for the article, it’ll be real interesting to see how this turns out.

7 Bill February 3, 2011 at 11:52 am

So some of these neighbors are fine if a home is rented for 30 days or more (like Rollingwood, TX) but feel personally wronged if it gets rented for 29 or less? Does <30 days somehow affect their "right" to have a warm and fuzzy "relationship" with the occupants of the neighboring house? Please. Compared to decades past, the majority of people today interact minimally, if at all, with their neighbors; so that issue is basically a red herring. Moreover, they take the chance that their long-term neighbor is everything that they could possibly hate in a person/neighbor. In that case, wouldn't a different occupant every weekend be preferable?

[Steve: How many times have you seen a client attempt a vetting process concerning their potential neighbors? I'm guessing never. It is a gamble that one can win, lose, or basically break-even on when buying a house -- and one that happens again when neighboring homes are eventually sold.]

If the alleged legitimate issues are already addressed in city code (e.g., inappropriate noise) then another law is not justified. If someone parks in front of your driveway, call a tow truck, have it towed, and tape the contact information of the towing company on the front of the driveway. Any person that would not accept that they deserved to be towed in that situation is not worth worrying about.

As already mentioned, any of theses issues can happen if the house is rented for any length of time or even if the owner is the occupant. The maintenance of the home's exterior — typically an obvious requirement for a successful VRBO property — should be the larger concern for an immediate neighbor.

8 Steve Crossland, Austin REALTOR February 3, 2011 at 1:40 pm

Hi Bill,

> Steve: How many times have you seen a client attempt a vetting process concerning their potential neighbors?

Actually, this does happen in an indirect way. People form perceptions and judgments about a neighborhood in general, based on the upkeep and appearance. We’ve definitely had buyers rule out houses because the house next door looked junky.

Like I said, the VRBO issue is complex and will take a while to sort out and find the best and fairest solution that will allow the businesses to operate while protecting the character and fabric of the neighborhoods in which they operate.

Steve

9 Bill February 3, 2011 at 1:55 pm

What can those seemingly careful clients do when the house next door is sold and it then becomes junky and the hangout for a bad punk band?

People can try to choose their neighbors but ultimately they have zero control over who may end up next door to them and there is a 50% chance that the short-term renter is going to be either better or worse than a long-term occupant.

10 Greg February 3, 2011 at 3:24 pm

People certainly do evaluate their future neighbors by external house appearance, and interestingly these vacation rentals probably are some really nicely kept places.

I completely agree that it seems like these issues are covered by existing code. Maybe the codes just need to be enforced better? It’s odd to me that a VRBO is considered a business, whereas someone buying an investment property to rent out isn’t. Everything you’d want out of a VRBO neighbor is the same as a renter or an owner occupant. This seems like a repeat of the effort to register all rental properties that didn’t get approved.

11 Steve Crossland, Austin REALTOR February 3, 2011 at 3:55 pm

> This seems like a repeat of the effort to register all rental properties that didn’t get approved.

The Rental Registration program, which we (the property management and real estate industry) fought and successfully killed, was a completely different issue. It would have brought Ft. Worth style rental registration, at huge tax-payer expense that could have only been funded by charging every landlord an annual fee. We didn’t need city code people driving through Circle C, for example, looking for tall grass or broken gutters. They have an HOA that deals with that. The entire thing was a farce and ended up being tabled.

The Vacation Rentals are a problem of much smaller dimensions and narrow scope. It’s a lot easier to define the parameters of the issue because, at present, we’re only talking about a few hundred of these things whereas there are 10s of thousands of standard rental homes in Austin, and their all allowed under current zoning and codes.
Steve

12 Bill February 3, 2011 at 5:05 pm

In my opinion, rental is rental and one form of it should not be more favored simply based upon the length of the lease. All of it puts income in the owner’s pocket, making it a commercial venture for that individual; even if it all occurs in a residential neighborhood. If one owner prefers the ease of renting long-term to one tenant, so be it. If another is willing to put up with the extra work that would go in to preparing and maintaining the home for a new tenant every week, fine by me. In either case, the tenant can choose to respect the existing laws or not; just as a homeowner could do likewise.

The only true difference in this debate is that rather than the same individual being the lessor for 30+ days, there may be multiple lessors for <30 days. That does not change the laws regarding the number of occupants allowed in the home (related or otherwise) or any other ordinance that addresses being a nuisance.

The monthly number of physical comings and goings of the occupants could actually be lower in a residence only rented only on the weekends; but, still, the thought of not having the same neighbor for at least 30 days apparently really bothers some.

13 Alison Shuman Masis February 5, 2011 at 3:53 am

Very well-written and well-balanced article about VRBOs in Austin. I think in every instance, it will be the few bad eggs that ruin it for all of the other conscientious people who are either owners or renters. I would think this would be a growing market in Austin, as Austin becomes more and more a destination place and someplace where people want to come and experience the true flavors of the town, and not just from a hotel room.

14 Dee February 6, 2011 at 1:06 pm

Providing sleeping accommodations for a fee, minimum 2-night stay, with linen service, online reservation, online payment, etc., is in violation of existing code and zoning in single family residential areas. The only transient sleep accommodations permitted in SF-2 are B&B’s, which are required to have the owner living on the property. These home hotels (VRBO is a trade name of Homeaway, by the way), are often properties purchased for the very purpose of establishing and operating a hotel there. There are many differences between a rental property when the renter resides on a longterm basis and a home hotel where the guests stay for a couple nights.
Just to give folks some food for thought, particularly the parents out there, if a registered sex offender moves into a property, they are going to be required to report their new address to the authorities. If such a person, potentially a pedophile, stays for two nights in a hotel, that is likely not required. Hometel operators repeatedly state that they screen their guests, but I have not heard how they accomplish that given that they accept online reservations and payment and they have different guests sometimes as frequently as every weekend
As pointed out in the article, too, a bottom line issue is that, living in a residential area, we want real neighbors again. No guarantee real neighbors will be perfect, but we can get to know them and vice versa, and we will at least know who is next door.

15 Bill February 6, 2011 at 1:33 pm

I doubt any sensible person honestly believes pedophiles are a legitimate statistical threat in this debate.

For what it is worth, Ted Bundy lived next door to several people throughout his adult life — presumably with a lease of at least 30 days — that probably thought they had gotten to “know” him. After finding out about his horrible crimes, I’m sure they all told the familiar story of disbelief that the man next door was a serial killer.

16 Elizabeth February 6, 2011 at 4:16 pm

Renting to 6 unrelated people is against code. SR2 zonnig prevents this type of rental. The City is choosing to not enforce it’s own code and zoning laws. Homeaway states on its own site, “Tips for Getting in the Business” to check local zoning.
I think there is not a problem for a true vaction trade or renting out for less than 2 weeks a year but when you open a commercial business in a residential neighborhood it is against code and zoning. You are then operating an illegal business. Where is the owner in the middle of the night to deal with noise and blocked driveways.?. They are not giving their number to the neighbor saying, “Call me @ 3 AM if there is a problem.”
If you want to open a transient hotel then do it in an area that is zoned for it and you won’t have problems.
BTW Ted Bundy was a murderer not a pedophile. There are reasons sex offenders are required to register. That is the law. Apartments that are within 1000 feet of a school have to screen for registered sex offenders, so Bill you are wrong, A statistic of one is enough if it endangers my child.

17 benlindo March 11, 2011 at 9:28 am

I just stayed at a VRBO at 1914 West 38th street that clearly didn’t meet the minimum standards for fire safety. There was only a single fire detector for a three bedroom house. I didn’t even know if it works. I think code specifies that smoke alarms be hard wired into the house’s electrical. Additionally I could not find a single fire extinguisher.

Why are there no rules and standards for how these VRBO’s operate?
If a hotel or B&B have to meet safety standards why not the VRBO?
What will you say when someone dies because minimum safety standards are ignored for the sake of profit?

18 Greg March 11, 2011 at 10:40 am

benlindo – There are standards, they’re the same standards that all rental properties have to conform to.

19 benlindo March 11, 2011 at 11:17 am

Whom do I contact when the standards are not met for specific properties?

20 Elizabeth March 11, 2011 at 11:35 am

Greg/Benlindo The standards should be at least to a B&B, in my opininon. These are not homes they are operating as hotels. Currently there are no inspectors assigned and no regulations in force.

21 Elizabeth March 11, 2011 at 4:37 pm

Call 311. Thye take all non emergency reports. Tell them you suspect code violation, have dates and times when you call.

22 cathy April 11, 2011 at 11:19 pm

I’ve been in cra**y hotels that hjave been supposedly ok’ed by zoning and fire dept and wasn’t safe nor clean!!!At least with the house option I can afford to make my family and have a washer and dryer on site

23 Reid April 20, 2011 at 10:46 pm

Austin, TX isn’t exactly Honolulu, or Miami. I think people here getting property for “vacation rentals” are severely overestimating the potential market for vacation rentals.

24 Elizabeth April 28, 2011 at 12:44 am

” Do I want one next door to me? No, I’d rather not. ”
So Steve in your own words you do not want one next to you BUT you spoke in favor of @ the City of Austin BOA hearing. What gives?
It is OK for a VRBO to be next to me? It seems you are playing both sides of the fence. Don’t portray yourself as a neutral party standing on the sideline to see how it plays out when clearly that is not you.

25 Steve Crossland, REALTOR in Austin TX April 28, 2011 at 9:16 am

Hi Elizabeth,

Thanks for your comment.

I was speaking last night on behalf of the Austin Board of Realtors, which holds the position that the issue is best hashed out through a collaborative effort that will result in specific code amendments clarifying the rules and protecting the rights of property owners.

As far as playing both sides of the fence, I don’t think so. It’s a matter understanding how objectionable something can be, but still recognizing that the issue is complex is requires more than a knee-jerk ban on short term rentals, which is what almost happened last night. I can find something objectionable but still support the right for someone to do it. The example last night of the lady placing signs directly facing the STR on her street, that said “HomeAway, Go Away”, and “Vacations Not Welcome” (or something like that) I find completely objectionable and counter-productive, yet I understand her right to free speech and support that right.

I do personally bristle at the thought of someone opening a Vacation Rental home across the street from me or next door. It would suck and I wouldn’t like it. But as a defender of property rights, it’s not clear to me what I would say to that owner or where it’s clearly prohibited in city code.

At present, city code doesn’t adequately address the rights of either the property owners who wish to provide STR housing or the rights of the neighbors who are directly affected by the STR homes. That’s something that can be addressed through a comprehensive look at all the issues involved. I look forward to beig involved in the Working Group effort, either behind the scene through the ABOr Government Affair Committee, or as an actual member of the group representing the Austin Board of Realtor’s position that a fair balance can and should be sought.

26 Elizabeth April 28, 2011 at 11:01 am

I do not think it would be a knee jerk reaction to limit the number of times a VRBO can be rented out. The proposal voted on did not ban anything, it put limitations.
Currently it is an unregulated free for all with neighbors portrayed to be the bad guys. The VRBO/SRT are operating without rules, ignoring code, not paying taxes etc and City of Austin is looking the other way.

27 Steve Crossland, REALTOR in Austin TX April 30, 2011 at 2:05 pm

> The proposal voted on did not ban anything, it put limitations.

The limitations would have effectively banned most STR from operating as most do in fact rent out more than 5 times a year.

I found it rather frightening the the Adjustment Board, rather than simply voting up or down the specific question at hand, attempted to in fact write policy. It’s a complex issue that requires a lot more thinking that the board put into it. I agree with the city’s approach to correct this situation through the code amendment process, whereby a full and complete examination of all related issues can be taken into consideration.

Steve

Steve

28 Elizabeth April 30, 2011 at 6:47 pm

I do not think it is at all frightening that someone in the City takes a stand. If the BOA decided that a week was “transient” then that is fine it is a week.But for the City and BOA to declare we do not know what “transient” means but we use normal definitions in Code then the City looks really crazy.
Why do you think the City will correct this thru code amendment? They clearly said the working group may be formed but that they could take some, part or NONE of the working group suggestions. So they are asking folks to volunteer their time ( and money) to sit in a group that may not even be heard at all (their words.) I think that is a an attempt to placate.
How unfair is it to B&B’s that pay thousands to operate legally. That is why there are only 10 of them and> 250 SRT’s. If I had a B&B I would say, “Screw it I am now a VRBO, I can do what I want and not have to abide by ANY rules at all.”
VRBO’s need to be banned from operating as they have. Other cities our size have restrictions and limitations. There are no safety regulations in place. Do you know the one on Argentia had a fire, while it was rented? It has been operating mostly as a Frat party house. The owner does not care, does not return calls and repeatedly violates code. You bet the neighbors are unhappy. The City does nothing and when attempts were made to contact the owner he had two comments. One was “F### You” and the other was “Fires happen.”

29 Steve Crossland, REALTOR in Austin TX May 3, 2011 at 4:03 pm

Hi Elezabeth,

You make some valid points. Are you going to be part of the Working Group? I’m going to try to join. I think it’s an interesting problem to work through and I can see both sides of the issue. I always come down on the side of Property Rights though. But in this case, both sides have a legitimate case to make that their property rights are superior to and more important than the other. I think some sort of compromise will result that leaves at least some people on both sides of the issue unhappy. In other words, STR are not going to be banned completely, so somebody will still be living next to or across from them, but neither will they be unregulated and able to sprout up overnight either. That’s my prediction.
Steve

30 Elizabeth May 3, 2011 at 4:46 pm

I could happily debate either side if I was in high school.
The most aggravating thing is that the STR owners are not recognizing the really bad and serious problems that some owners are causing. So if the topic is “Property Rights” then the rights of the people living in close proximity are being completely ignored by the City, Code Enforcement, APD, Home Away and STR owners.
I do feel bad for the folks who bought a house that their budget could not handle and in order to keep it are now doing STR’s to meet mortgage but they started a business without researching code, getting proper insurance etc. I may join the working group but I feel the City has already taken their position, is being heavily lobbied by Home Away and is leaning towards them. So if I can clearly see that I will not waste my time and energy and will work at it from another direction. Since Home Away is a world wide company with most of their homes in resort areas they really do not need a dime of Austin money.
My position is that resident owners are fine. A commercial business in a residential neighborhood is not fine and should be stopped immediately. There is no way that someone owning 10-13 of these is properly screening renters.
Please name 3 other service businesses in this City that are not regulated, licensed etc at all.
Why did Austin Board of Realtors take that position? What concessions are they getting from Home Away?

31 Steve Crossland, REALTOR in Austin TX May 10, 2011 at 10:27 am

> Why did Austin Board of Realtors take that position? What concessions are they getting from Home Away?

The Austin Board of Realtors always comes down on the side of private property rights, it’s that simple. Within that overarching mission, there are nuances and other factors that come into play. The ECAD Ordinance is an example.

ABOR has no relationship and hasn’t even collaborated with HomeAway. We are two separate entities on the same “side” (against total banning) of the STR/VRBO issue.

At the first workgroup last night, it was made clear at the outset that that a complete ban is off the table. So is leaving it unregulated. I’d prefer zero to minimal regulation, but recognize that some regulation is inevitable and could be helpful in clarifying the rules and guidelines. At the same time, I worry that all regulation leads to more regulation, and that Austin home owners should always be given the most leeway possible, within code.

We’ll see where this leads. It’s started and there were a lot of diverse opinions at the workgroup.
Steve

32 Elizabeth May 10, 2011 at 2:49 pm

What about property rights of the neighbors? When you sell a house do you disclose if there is a known VRBO on the street?
A complete ban is not off the table. What was made clear was that group was not going to discuss the legality of the issue. They may still be banned as there are many more steps in the process.
What is your onopinion on B &B’s? Deregulate them?

33 Steve Crossland, REALTOR in Austin TX May 10, 2011 at 3:52 pm

Hi Elizabeth,

Maybe I misunderstood what I heard last night, but I thought the moderator stated that we’re not there to discuss the meaning of “transient”, we’re not there to discuss banning STRs, and we’re not there to discuss leaving everything as-is. She even shut down the gentlemen who wanted to raise the “transient” discussion.

The purpose of the working group is to explore ways to solve the problems expressed by those living adjacent to and/or across or near a STR. What I found interesting was that a lot of the “problems” and complaints are actually universal in nature, and not specific to STR homes.

As M1EK mentioned in comment #3 above, parking issues happen everywhere, in all sorts of neighborhoods. Trash is a problem in areas of Austin that have no STR dwelling units. Noise, loud parties – also universal in nature, and they happen whether it’s a rental property or owner occupied. No neighborhood, even gated communities, can keep out all “strangers”. So many of the gripes are being attributed specifically to STR when in fact there is no guarantee the same issues wouldn’t happen with long term renters in the same house.

I think the main issue is that the code enforcement desired by many of the affected neighbors is not designed to respond quickly enough. Nobody even works on the weekends at city code enforcement, and the police often don’t respond quickly to noise complaints or other (what they deem to be) low level issues.

My opinion on Bed and Breakfasts is that it’s apples and oranges. A B&B, as mentioned in the meeting last night, accommodates complete strangers under the same roof and in the next room over, which really does beg for some sort of on site person to be there. B&Bs serve cooked food too, so the health department is probably involved. VRBO customers rent the entire dwelling unit and require no on site services or meal preparation. So, while they may be similar in some ways, I don’t think the code solutions will be interchangeable.

Finally, to answer your disclosure question, sellers of homes have no obligation to investigate or discover what other owners down the street are doing at their property. The disclosure is primarily about property condition.

That said, one does wonder what an unaware buyer might think if a seller remained silent and the buyer became outraged after the purchase (of a home with two STR/VRBO across the street or next door) and started suing everyone, claiming “I wouldn’t have bought the house had I known this”.

At present, it would be the buyer’s responsibility to investigate and discover and issue that might affect their decision to purchase a certain house in a certain neighborhood, with a few exceptions, and I think it will always remain that way.

Do you live next to a STR? What’s you’re main beef?

steve

34 Elizabeth May 10, 2011 at 7:44 pm

Ms Dealey did say last night and a few weeks go that it was not her commissions job ( not the word she used but the same thought) to decide the legal issues. It is also not her job to deal with the tax problems, (my thought.)
If Code Enforcement and APD had done their jobs and there were no problems, we wouldn’t even be there at all.
I don’t think the people of Allandale and Travis Heights, where the worst problems seem to be, stay up nights imagining things to spend LOTS of time, energy and money on.
Even though the problems may be universal and occur throughout the City I think VRBO’s concentrate them.
I do not think there are many homes in Allandale, let’s say a 3/2 that have 12-15 people living there every weekend. I do not think they are having “events” such as wedding showers or bachelor parties 2-3 x on a weekend. I do not think there is a party all day, into the night every single football game. You have basically dropped a party/event center/frat house in the middle of an otherwise quiet neighborhood. See the problem. Parking, noise and trash constantly, not just a few weekends out of the year. When I go on vacation I go to have a good time and so do a lot of the people renting. They are not all families and grandmas renting these houses.
If there is a “use change” or variance request everyone in 500 ft is notified with the proposed change and the name and info for the owner or at least a contact person is provided. This is not done when someone decides to start a VRBO. So you have no way to call and say, “Hey, there is a problem.”
B&B’s are heavily regulated and have to pay for registration and licensing. I think anyone renting for profit should have to pay similar fees and be inspected etc. Why not? Most other businesses do ie restaurants, food trailers, maid services (bonding and insurance,) massage therapist, oh and real estate agents. You are overseen by the TREC. It is a good thing, it protects the public, sets standards and educates. How do you propose to collect Hotel tax without registration? That is required by the State not the City. Currently the City is in violation by not collecting the Hotel tax from ALL of these folks.
My main beef is I had to follow City rules to build, get permits, have inspections etc. Now someone decides to open a totally unregulated business and not have to follow any rules. My tax dollars are chasing them. Problems are not enforced yet when my 80 year old neighbor has a carport 5 ft over the line it costs her over $600 to deal with City and Code. She is threatend with immediate fines. The City looks the other way and basically blows all VRBO complaints off. The owners expect Code and laws to be rewritten in their favor after the fact.
There is one across the street from one of our houses, it is a Frat house most weekends, all kinds of problems. In my opinion, they do not belong in SF2 or 3. We own 6 properties, live in 2 and do not want any more VRBO’s, the way it is now. A nice quiet B&B, fine. An owner on site, OK. Party house every weekend, and hey I like to have a good time too, NO. I say shut them down, write the rules, reapply and register within the rules and go from there. If I opened a restaurant/hotel or whatever and said, Oh, I’ll think of rules and follow them later, how would that go over?

35 Cathy May 13, 2011 at 8:49 am

I don’t live in Austin but the problem is becoming universal. Elizabeth’s point is well-taken. We regulate everything but VRs . If you want to run a 20-room hotel you have a gazillion rules to follow. If 10 people buy 2 units each in a condominium complex and rent them out as VRs, they’ve created a 20-room hotel. Why does one have to be regulated and not the other?

The example of the “Pro-VRBO” view is flawed.

First, many VRBO owner have deep pockets and see these homes as a business. They’re not struggling to hang on to their property. It is easier and far more lucrative to set up a VR than a long-term rental.

Second, if we want to keep deserving people from losing their homes, why do this at the expense of others? If John starts a VRBO, he’s causing pain and a loss of property values to his neighbor Paul. is John more worthy than Paul?

Finally, suppose Jphn wants to hang on to his home by starting a business. The law regulates many things he can’t do. He can’t set aside one room of his home to breed Siamese cats, even if there is zero impact on the neighborhood. He can’t grow marijuana. He can’t start baking cookies and selling them. But he *can* bring hundreds of noisy people into the neighborhood via a VRBO. Where’s the logic?

36 J May 13, 2011 at 1:01 pm

Cathy –

How is it easier to set up a VR than a long term rental? I’d say it’s harder, rather than screening tenants on a yearly basis, you’re screening them say on a weekly basis. Furnishing a house and keeping it clean isn’t easy either. Also VRs are covered by the same requirements that long term rentals are (ie smoke detectors, door locks, occupancy restrictions, etc)

Where does the loss of property value argument come from? I’ve stayed in short term rentals before and they’ve all been very nice. I bet if you had an appraiser take a look at a short term rentals, they’d be valued higher than the average home in their respective neighborhood.

Side note, in Austin it is legal to bake and sell cookies from a home kitchen. I don’t know the particulars of the law, but I think its something that was passed recently.

37 Lee May 17, 2011 at 9:43 pm

I have been a resident of the Allandale and Crestview areas for 13 years and own a short term rental in Allandale. It is a home I bought a few years ago with the intention of living there but as many of you know, things in life change – I ended up renting the home out as a long term rental.
After 4 years of seeing a home I adore not maintained by long term renters, I decided to rent the home out as a short term rental. I take great care to preserve my home – I speak with all my renters, meet some of them as I check in on the home, do not allow parties of any kind, require personal information (including ages) on all of renters, and require a signed contract.
In the 1 year that I have rented the home out, 92% of my renters have been small families (4 people of less) visiting other family members living in Austin. 84% of my renters are over the age of 55, most of whom let me know that they are visiting children and grandchildren living in the area. A few grandparents chose my home versus a hotel because they wanted their grandchildren to be able to walk and bike to the home. Others wanted the coziness and warmth of a home versus a hotel when they are staying for a couple of weeks visiting family. They take out the trash, they do not party, they do not have more than 1 car on the property, and they have all been very friendly. They take care of the home – I have even had 2 of the month long renters plant flowers in the yard. I have never had a complaint from any neighbor.
Please remember that when you are vilifying short term renters, you are vilifying good people as well as family members of your neighbors.

38 Elizabeth May 17, 2011 at 10:39 pm

You may me doing a good job but many others truly aren’t and it is not just one or two. There are problems ( and bad ones) in your neighborhood as well as Travis Heights and others. Do you think your neighbors are imagining parties, fires and other problems?
Without regulation and registration there is no way for the COA to get a handle on this real and serious problem.
I think a lot of the STR owners are worried about the extra cost but running a business does involve costs.
If you have never had a complaint, really what are you worried about?

39 Lee May 18, 2011 at 9:26 am

- – - “If you have never had a complaint, really what are you worried about?” – - –

Why wouldn’t I be worried?!? Have you seen the circus that is going on around us?

I am VERY worried that a handful of extremist neighbors will badger the city so much that the city takes equally extreme measures and ends up banning STRs, limits rental stays, or regulates them so heavily that I am unable to keep a home I love dearly and a rental that is causing no problems. Many short term rental owners feel this way.

I know quite a few of the STR owners and they are responsible owners like me – they also maintain their property, check in on renters, get information and identification beforehand, stop by to make sure trash is removed, etc… They also have quite a few families staying in their homes, people visiting family in Austin, people coming into Austin for hospital treatment, etc… Even my own parents stay in my short term rental home when traveling to see our family – are they not welcome either?

Elizabeth, you frequently mention all the “fires, parties, and other problems”. There has been 1 fire – no one was hurt. This accident could have happened at any home – any owner occupied home, any long term rental, or any short term rental. Any home. This goes for parties, noise, trash, etc… It could happen at any home.

So what happens if the city regulates short term rentals? Then do they start regulating long term rentals? Then maybe they move on to regulating owner occupied homes? My home, your home?

There are proposals for inspections of STRs that include lists of items, like checking to make sure the bathtubs have enough caulk. Why does someone care if my bathtub is properly caulked?

Some of the inspection items are more logical – fire extinguishers, smoke detectors, water heaters up to code. But if we are so concerned about the safety of a short term renter, then why aren’t we just as concerned about the safety of a long term renter or an owner? Why not have code inspections for every home? Where do we draw the line?

Everyone wants the right to tell their neighbor how to live and maintain their home, but no one wants their neighbors telling them how to live and maintain their own home. You can’t have both.

40 Steve Crossland, REALTOR in Austin TX May 18, 2011 at 9:48 am

I have new clients driving to Austin from out of state this weekend. It’s a family, and I’ll be picking them up Monday at a vacation rental home in Austin that they’ve rented until they can find a suitable home to lease long term while getting to know the city and eventually buying a home. Meanwhile, they don’t want to be stuck in a hotel room with kids for an undetermined amount of time. STRs fill this need perfectly. I’m starting to wonder if the term “Vacation Rental” isn’t actually a misnomer, based on the demographic of the vast number of actual users. That’s why I’ve started using Short Term Rental (STR) in describing these homes.

In this instance, the client is also bringing a business to Austin and will start hiring once settled. It’s not in Austin’s best interest to lay out a NOT WELCOME mat to incoming new resident families such as these who are the “consumers” of the STR product.

I doubt my people will be having parties or causing any trouble, but I did warn them that some neighbors have become hostile toward STR guests, with at least one I know of directing “Go Away” signs at the STR home. This shocked/surprised the client, and we just hope they haven’t rented a home next to an angry neighbor.

Steve

41 Elizabeth May 18, 2011 at 10:28 am

STR owners and Home Away have been at the COA. Home Away’s lawyer has been visible and vocal. Apparently Austin Board of Realtors has also decided to side with the STR’s. They essentially have a lobby.
Most STR’s are not following the few rules that are in place such as registering with the State Comptroller and paying their HOT taxes.
Long term rentals DO have restrictions as do owner occupied homes. There is a city “Code” here that is supposedly for safety. If you don’t think COA is not regulating homeowners ask the Fairview neighborhood. If I don’t mow my lawn or store an RV in my driveway that is a code violation. I just built a house, I had to get permits and build it to code. There had to be fire alarms and egress from the bedrooms. There had to be tempered glass in the bathrooms etc. It was inspected I was issued a Certificate of Occupancy. I found no problem with that althought it was sometimes difficlut to navigate the City process.
You want to operate a business. You want to make money. You are not doing this for altruistic/self actualization purposes. You are not renting to low income or needy. You do not house anyone for free.
You have a business and it is for profit there should be rules and regulations. Do you want to eat in a restaurant not inspected by the health dept? Do you want food and drugs not regulated by the FDA? What other businesses in this town opeate totally free of rules, regualtions and inspection?
I am all for tourism and the dollars they bring but not at the expense of neighborhoods.
If the neighbors are angry it is because they have had problems. It is not all wine and roses like some STR owners make it out to be. You would be bitching if the house next to you had a party three nights a week every weekend. You would be upset if the traffic went from 2-5 to 12-15 people at a time with all the problems that would bring (more cars, more noise, more trash) OR what if that happened next to your STR? How much money would you make then? The grannies and families you claim to rent to would no longer want to rent from you. In your scenario you would have to one to complain to or enforce the peace and quiet you are currently enjoying.
The one person with the signs is the one person next to where the one fire was at.

42 maddie May 18, 2011 at 11:24 am

I am also a Realtor and over the years I have had clients relocating to Austin who have opted to stay in a short term rental while they search for a home to purchase. I have also had clients decide to purchase a home in Austin because they stayed in short term rentals and visited family in Austin so frequently.
I agree with Steve that we should not lay out a “NOT WELCOME” mat to future residents who bring business, income, and help our Austin economy.

43 Elizabeth May 18, 2011 at 12:04 pm

That is a good point.
If they have a bad experience and stay in an STR that is next to another that parites all weekend, their car gets blocked in and they can’t get out of the driveway, there is trash blowing all over and a drunk passed out the yard in @ 3 AM they might not buy.
Regulation would be good for everyone.

44 lee May 18, 2011 at 12:20 pm

Elizabeth, I completely disagree with almost everything you have said in your posts and see that you have little to no first hand experience or knowledge of STR rules, regulations, renter demographics, renter contracts and rules, actual violations, STR facts, etc…

Since we can’t seem to agree on facts, I do have a question for you and would love to hear your opinion…should long term rentals be subject to the same rules and regulations that you are wanting for short term rentals? Possible ban, registration, annual fees, inspections, etc…? After all, long term rentals are a business and owners typically make a profit.

By the way, my short term rental makes no money each month – I usually break even each month. I continue to own this home because I love the home and area, a STR gives me flexibility in my choices and it provides my parents with a home nearby when they come to visit our family in Austin each month.

45 Bill May 18, 2011 at 12:20 pm

Elizabeth – Lee brings up some great points (copied below). Are you able to address them?

“Elizabeth, you frequently mention all the “fires, parties, and other problems”. There has been 1 fire – no one was hurt. This accident could have happened at any home – any owner occupied home, any long term rental, or any short term rental. Any home. This goes for parties, noise, trash, etc… It could happen at any home.

So what happens if the city regulates short term rentals? Then do they start regulating long term rentals? Then maybe they move on to regulating owner occupied homes? My home, your home?

There are proposals for inspections of STRs that include lists of items, like checking to make sure the bathtubs have enough caulk. Why does someone care if my bathtub is properly caulked? “

46 maddie May 18, 2011 at 12:58 pm

In reference to your post –
If they have a bad experience and stay in an STR that is next to another that parites all weekend, their car gets blocked in and they can’t get out of the driveway, there is trash blowing all over and a drunk passed out the yard in @ 3 AM they might not buy.
Regulation would be good for everyone.

There are very few short term rentals in Austin, especially when compared to long term rentals. What you said above is more likely to happen living next to a long term rental. Should we regulate long term rentals in the same way you want short term rentals regulated? Doesn’t too much regulation infringe on property rights?

47 Elizabeth May 18, 2011 at 1:32 pm

Actually the house I just built had the caulking inspected. I am not sure why but if water leaks that leads to rot which lead to termites? I don’t think that particular item will make it on the list for inspections and it was mentioned as an extreme example.
Bill -do you read the previous posts? How about the very first, 2nd paragraph at the top of this page? “The Anti-VRBO Point of View” and mine dated 05/10
I am trying not to be repetitive and I addressed every point.
You live in a City, a City has rules, codes, police, animal control, parking, noise, on and on. If you just want to do whatever you want with no regard to anyone else move out of the City, move to an island. If you decide to move here, Seattle, Chicago or any other City there is an applied contract that you will abide by the rules. Some are simple (speed limits) others are more nebulous (be a good neighbor.)
Lee- The only rules currently in place for STR’s are what the individual owners choose to make. The City has none. That is THE problem. If there is a “Rule Book” or regulations please post the link. I am talking about a City rule not some suggested guidelines posted by Home Away.
Do you think the City would be spending the money and man power on this issue if there were no problems.There are at least 3 City departments putting a lot of time and effort into this.Our tax dollars.
I do have first hand knowledge and are aware of all the points you mention. It is a FACT there was a fire. It is a FACT that some STR’s are being used as event centers. It is a FACT that some are rented out as party houses for every football game. I am not ignorant on this subject.
I do really feel for folks like yourself.But others are not so responsible as you hold yourself to be.
The rules currently in place for B&B’s would be fine with me with some modification.
As for long term rentals, Steve addressed that in a previous post. That is not the topic here though. If there are code violations, like I already said, they do get inspected, even owner occupied homes.

48 lee May 18, 2011 at 1:47 pm

There ARE rules for STRs – short term rentals are bound by the same rules and regulations in place for long term rentals. Locks, smoke detectors, city codes, building codes, taxes, etc….A rental is a rental is a rental.

49 Elizabeth May 18, 2011 at 2:07 pm

Lee and Maddie,
If there are no regulations the STR’s will be defined by the worst not the best.
Meaning, good regualtions and reasonable standards will help and not hurt the industry.
A rental is a rental is not necessarily true. A boarding house in East Austin, rented by the night is not the same as a B&B in Travis Heights or Judges Hill.

50 lee May 18, 2011 at 2:17 pm

I restate my post again….
There ARE rules for STRs – short term rentals are bound by the same rules and regulations in place for long term rentals. Locks, smoke detectors, city codes, building codes, taxes, etc…

In addition to the above mentioned, STRs are like any other LTR or owner occupied home in that they are held to noise ordinances, occupancy codes, building codes, trash ordinances, and more.

Why are you continually stating that there are no rules for STRs?

51 Elizabeth May 18, 2011 at 3:41 pm

Lee, since you said that 3x I thought it was clear, those rules are in place.
I think there should be additional regualtions for STR’s due to the nature of the buisness. I would like to see a minimum 3 night stay. That would help some with a new party every night. At least they might be tired by the 3rd night!
The things you say you do “check in on renters, get information and identification beforehand, stop by to make sure trash is removed.” Why not have some sort of standard for identification and information? It is required by hotels, apartments ,car rentals, to fly a plane and buy a house.

52 Lee May 18, 2011 at 4:16 pm

Elizabeth, I had to reiterate my point 3x because you were erroneous in your “facts”:
And I quote: “The only rules currently in place for STR’s are what the individual owners choose to make. The City has none.”
I appreciate you finally admitting that there are rules in place.

I do have a 3 night minimum, I do have rules, I do get renter information, I do not allow parties, and more. Most short term rental owners also have similar self-imposed rules IN ADDITION to all of the city ordinances and regulations stated above. I know many of the owners in Central Austin and there is not a single STR owner I know who allows parties. We put a lot of money and love into our homes and do not want to see them destroyed by parties.

Regardless, I do not agree with imposing my personal values or rules on other STR owners, LTR owners, or owner occupants. There are already city and state regulations and ordinances in place. I agree with Maddie – too much regulation infringes on our property rights.

53 Steve Crossland, REALTOR in Austin TX May 18, 2011 at 4:33 pm

I think the problem Elizabeth is that there is little to no DATA supporting the fears and concerns expressed by you and other anti-STR folks. I hear a lot of opinion, judgment, feelings and wants, but no actual data that doesn’t also apply to any rental home or even owner-occupied homes.

Tell me the address of a Vacation Rental / STR in Austin for which noise complaints, parking, trash, illegal activity, parties, people, vehicle trips, etc. have achieved outlier status in the data records of Austin Police and/or City of Austin code compliance department. Has even one of these properties achieved a “nuisance” status, other than by the subjective dislike of a neighbor?

By “outlier”, I mean statistical evidence of a property producing greater than normal instances of common neighborhood nuisances that manifest in complaints to police or code enforcement. There may be a house or two, but so will there be vastly more examples of non-STR homes producing the bulk of said complaints.

In other words, if we have 300 or 400 STR homes in Austin, do these homes statistically produce more police calls and code violations, percentage-wise, than a comparable sub-set of owner-occupied and/or long term rentals in the same zipcodes? There has been no evidence or data produced that says it’s so.

All of the red herrings/fears thrown out by the anti-STR crowd are things that exist without STRs and which are not statistically increased with the presence of STRs, in my opinion. I am certain the data will back me up once examined properly.

In short, a lot of what I hear is neighbors just not happy that “those people” are in their neighborhood. And they don’t even know who “those people” are, except to say that they are not permanent. That is to say, that all temporary or short term guests to Austin who would like to reside in a furnished home instead of a hotel somehow, as a class of visitor to the city, represent a threat that demands immediate action by the city of Austin.

I call B.S. on that notion. Show me the data and facts that support the accusations. Otherwise, it’s starting to seem like nothing more than an old fashioned witch hunt instead of a reasonable conversation. The city has no business imposing a set of new regulations on an entire group of private property owners just because a smattering of what seems like a dozen or so complainers don’t like the type of tenant a private property owner chooses to rent to.

Convince me with data, not suppositions and aspersions. I’m all ears and ready to listen.

Steve

54 Lee May 18, 2011 at 5:21 pm

Very well put.

55 Elizabeth May 18, 2011 at 5:36 pm

There is data, it was given in volumes to the BOA. If there were no problems the COA would not be proactive on this issue. Mandy Dealey stated that Monday night. The data diligently collected has been turned in to the City. This problem did not just start a few weeks ago.
Listen to the hearing from the Audit Committee on HOT taxes not being paid. The City Auditor has data.
There is plenty out there if you spend the time to find it.
Why are there rules and regs for B&B’s? Did they cause problems? Were the neighbors fearful?
Why are you regulated by the TREC,Steve? Is is because of red herrings or a witch hunt against realtors?
Why don’t you take the time to go find data proving that all the STR’s are registered with the comptroller? If not they are breaking the law, which is clear and on the books.
I am not paranoid or fearful, just realistic. I would like to find a compromise that is fair to both sides. It would reassure the neighborhood folks yet not put an unrealistic burden on the STR owners.

56 Elizabeth May 18, 2011 at 5:59 pm

Steve,
Westlake and Rollingwood have banned STR’s were they on a witch hunt? I assume they had a reasonable conversation before taking that action.
It is not setting imposing a set of new regulations on private property owners but an attempt to regulate a business,

57 Steve Crossland, REALTOR in Austin TX May 18, 2011 at 7:27 pm

With almost 60 comments I think this thread has run it’s course, many opinions have been shared and heard, and there isn’t anything new to say or add. I’ll post a new blog article focusing on how the city WorkGroup process unfolds and where it looks like things are headed when that time comes. Thanks to everyone who contributed to the discussion.

Steve

58 Steve Crossland, REALTOR in Austin TX December 4, 2011 at 8:47 pm

I’ve posted an update blog article regarding the Short Term Rental process in Austin.
Link: http://wp.me/pd1HO-DD

Comments on this entry are closed.

Previous post:

Next post: