Austin Short Term Rental (STR) Update

by Steve Crossland, REALTOR in Austin TX on December 4, 2011 · 14 comments

Almost a year ago I wrote about the Austin Short Term Rental (aka STR, Vacation Rental, VRBO) issues surfacing in the Austin community. That blog article generated 57 comments and a lot of heated back and forth. I eventually had to close the comments for that article because I felt everything had been said that could be said at that stage of the process. This article is an update on what has happened with STRs in Austin since the last blog post, and what will happen next.

The issue has moved forward through a “Working Group” process which concluded last August. City Staff is currently reviewing a draft set of regulations. The full Planning Commission will consider the recommendation after City Staff finishes the review. From there, a Code Amendment and set of new rules will be sent to Austin City Council. That probably won’t happen until 2012.

The Working Group Process
I participated in the Working Group process in the role of a Government Affairs Committee member of the Austin Board of Realtors. The Austin Board of Realtors involves itself in any local issue which could affect the private property rights of home owners. In many ways, ABOR is somewhat of a “Silent Knight’” working for the benefit of Austin homeowners, though most home owners are probably unaware that they are served in this manner.

ABOR seeks to protect the rights of property owners and opposes rules or laws that would diminish the private property rights of Austin property owners. The ABOR position on Short Term Rentals in Austin is, in short:

The Austin Board of REALTORS® supports preserving the character of Austin neighborhoods and protecting the quality of life of its residents. ABoR also believes homeowners have a right to lease their homes, regardless of the length of the lease, without municipal licensing requirements or registration fees. We also believe that the City of Austin should hold formal stakeholder meetings to address the issues concerning short-term rentals and develop a solution that balances the needs of neighborhood residents and residential property investors.

The stakeholder meetings did occur, a middle ground was determined which, as predicted in my earlier article, didn’t give either side the warm fuzzies, but that’s how these things go.

The Board of Adjustments Decision
Meanwhile, those opposed to STRs in Austin used the Board of Adjustments process to have one STR in Allandale declared in violation of a newly made-up-on-the-fly 10-day rule. The Austin Board of Adjustments essentially decided, capriciously, that since the word “transient” was not defined in City of Austin Code as a specific number of days, it would make up a number. It came up with “10″. Meaning, the rental of an Austin home for 9 days would be a “transient” use of the property, whereas 10 days would not be “transient”.

The City of Austin ignored and continues to ignore that ruling. As reported in the Austin Statesman August 2011:

“The City of Austin is allowing short-term, or vacation, rental homes to operate for now in residential areas despite a city Board of Adjustment’s ruling that rentals for a period of less than 10 days violate city code.

The Adjustment Board’s decision, which overturned a city staff decision earlier this year, has triggered a lawsuit by five owners of rental homes who contend that if upheld, it would deprive them of constitutionally protected property rights.

Meanwhile, the city’s decision to defer enforcement is drawing the ire of critics, including some who live next door to short-term rental homes and who want the city to enforce the Adjustment Board’s decision now.”

The anti-STR group continues to press on, having now passed a reolution through the Austin Neighbors Council. That resolution was voted down by the Zilker Neighborhood, which contains the highest concentration of STRs in Austin. Other neighborhoods did sign on though. ANC states that the support of the resolution was better than 2 to 1.

The ANC Resolution for Short Term Rentals would impose an outright ban on STRs, except for homestead owners. The language is:

Be It Resolved that the Austin Neighborhoods Council supports the following Resolutions:

That the Land Development Code’s definition of permissible residential uses in single family zoning districts be expanded to allow properties that are homesteaded as defined above and are the owner’s primary residence to be rented on a transient, short term basis, defined above as a residential rental of between one and thirty days, for a maximum total of 60 days per calendar year.

That the City Council of Austin, Texas specifically enact an ordinance disallowing short term residential use in single family zoning districts as being a transient use, unless exempted by the property being homesteaded and the owner’s primary place of residence. This ordinance, by the definitions and wording above, would emphasize that STRs have always been and continue to be in contradiction with the permissible residential uses allowed in single family zoning districts, and that the current use of a property as a CSTR is not a legal nonconforming use and that this use shall not be grandfathered.

This proposal, which ANC is pushing at City Council (ABOR and HomeAway are also pushing our separate but similar positions as well) would shut down existing STRs in Austin except for homestead properties. So, if you owner-occupy your homestead, I guess ANC is OK with you renting it out to overnight guests 30 weekends a year while you leave town. The “strangers” that you rent to would somehow be “acceptable” or “different” strangers than the ones renting non-homesteaded houses, and presumably pose none of the problems or issues that are used as the basis of complaint for outlawing STRs in non-owner occupied homes.

Sorry, but I call B.S. on that. Come on. It’s dumb. Makes no sense. It’s intellectually indefensible to say that a class of renter can be split into “problematic” and “not problematic” categories based solely on the homestead status of a home.

Meanwhile, I’ve personally been drawn into the argument in another way via my previous blog article. Anti-STR people have taken to passing around and posting snippets of my earlier blog comments out of context. I guess this is as close as I’ll ever come to understanding what politics is like.

The first article I wrote was written intentionally to acknowledge the concerns and feelings of those opposed to STRs in Austin. It was written as a balanced presentation of both sides. For example, all things being equal, I said in the article that I personally would also prefer to have a family next door rather than an STR home. That’s still true. I’d also not want to live next to a fire station or a school, or a middle school tuba student, or a Harley owner who leaves for work at 5:30AM each morning. But I don’t want those situations banned or outlawed either.

To be clear, I would not object or complain if my neighbor converted his home to an STR. That would be his right as the property owner.

The anti-STR people apparently don’t understand that, as humans, we can hold nuanced positions about things. I can fully understand and even sympathize with the feelings of someone with whom I disagree. In this case, written expressions of that understanding and sympathy have been cut and pasted into cherry-picked excerpts used to exclaim, “Look! Crossland said he wouldn’t want to live next door to and STR!”.

What is this, Middle School? Good grief people. Context.

Yes, I understand your position. I agree with your right to feel upset. I get it. And I happen to have the ability to relate to your position and am willing to state as much. And I am 100% against the banning of STRs in Austin. Any quotes attributed to me need to be read inside the paragraph and article in which those quotes were written, not plucked out and used out of context in an attempt to discredit me and/or ABOR.

What’s Next?
We’ve (ABOR) met will all the Austin City Council members and stated our position, as summarized above. The other side is doing the same. We’re now just waiting to see what comes up from Planning Commission. At these meetings, my role was to point out, as I have all along, the lack of data to support any of the anti-STR complaints, and to relate some facts and realities about to STRs that can’t be ignored.

The 99 Percent
Short Term Rentals in Austin, in terms of property condition and appearance, are in the 99th percentile of homes in excellent condition. Want to drive randomly through Travis Heights or Zilker and try to pick out which homes might be STRs? You’ll be zeroing in on the prettiest, most well kept properties in those neighborhoods. Yard of the Month candidates. STRs make neighborhoods more attractive, helping support property values of the surrounding homes.

On the inside, these homes have to be in excellent operating condition, clean and safe with good furnishings. Guests will not tolerate anything less. The STR industry lives or dies by online reviews. Any owner trying to make a go at it with a subpar property in poor condition will be out of business quickly because they will get killed with bad reviews. In this way, the STR industry in Austin self-regulates and naturally weeds out the bad operators. Nobody will rent one of these places without first checking the online reviews, and if you want to be a successful STR owner, you better pull out all the stops to create a great experience for your guests.

No Evidence of Code Violation Problems
With regard to code violations, it follows that it’s statistically impossible that 1/10th of 1% of the single family housing stock in Austin (about 300 out of 330,000 homes in Austin are STRs) could be responsible for anything even close to a statistically significant portion of code complaints.

How could 1/10th of 1% of homes that are in the top 99% of good condition be deemed a “problem” that Code Enforcement needs to address through new laws or regulations? Existing Code rules and occupancy laws already cover STRs the same as every other home in Austin. STRs are not a source of Code problems.

No Evidence or Data Support Increased Crime
With regard to noise, crime, etc., if we ask Chief Acevedo if STRs are a source of problems for Austin Police, he won’t have a clue what we’re talking about. The guests who stay in STRs are less “vacationers” than we first knew. In fact, a great percentage of them are relatives of people in Austin who want to avoid a hotel during a visit. Many are families. As a subset of people coming to Austin, the ones choosing to reside in a Short Term Rental home instead of a hotel cannot be proven or characterized to be troublemakers or people here to disrupt the vibe of the neighborhoods in which they are staying.

So, neither the Code Violation or Criminal Troublemaker argument hold water. In fact, there is absolutely no data that describes any sort of problem that is not a universal issue existing in non-STRs. Giant parties, such as the Halloween Party every year in Travis Heights that drew 500+ people this year, are thrown by home owners, not weekend visitors. So there is no “party avoidance” to be had by banning STRs in Austin.

Finally, the city will probably want some sort of registration system identifying which homes are Short Term Rentals. While some of the STRs may remain STRs for many years, many more will phase in and out of that status rather quickly. Some may be placed into service only until the real estate market improves. Others are routinely rented alternately to long term renters. So, at any given time, the answer to “which homes are actually being used as STR?” is a moving target.

I’ll continue to follow this process. By early next year we should know what the Planning Commission is proposing. It will no doubt be “too much” and we’ll fight to par it down while the other side will fight to make it more restrictive, per the ANC proposal. But in the end, I do believe we have to fight these fights lest we allow the slippery slope of over-regulation to creep into the property rights we enjoy as property owners. That said, I do believe that both sides of this argument care about Austin and have chosen the position that they believe to be in Austin’s better interest. In that regard, we all want the same thing, a better Austin. But we’ll continue to disagree over what that looks like.

{ 14 comments… read them below or add one }

1 Charles December 4, 2011 at 9:21 pm

The ANC vote was 22 in favor, 3 against and 8 abstaining. Zilker voted to abstain.

2 Steve Crossland, REALTOR in Austin TX December 4, 2011 at 9:57 pm

Hi Charles,

Thanks for that info.

Is there a list anywhere online of which neighborhoods supported, opposed and abstained? Just curious to know the breakdown.

Steve

3 Charles December 4, 2011 at 10:13 pm

Not that I know of, they just take a count, it was a clear majority.

4 M1EK December 5, 2011 at 9:22 am

Wow, hard to believe Zilker abstained.

I sympathize with your treatment by ANC. It’s exactly what I got from them during both the Wal-Mart at Northcross fiasco and the McMansion ordinance process.

5 Steve Crossland, REALTOR in Austin TX December 5, 2011 at 10:37 am

Hi M1EK,

Actually, Zilker voted down the proposal at the actual Zilker Neighborhood meeting. It was a close vote from what I understand. Subsequent to that the Zilker rep for ANC voted to “abstain” at the actual ANC meeting instead of “no”, probably because the Zilker vote itself was close.

Steve

6 David December 5, 2011 at 11:57 pm

Steve,

I find your article biased and disingenuous:

1) You give the ABOR position on STR’s as: “The Austin Board of REALTORS® supports preserving the character of Austin neighborhoods and protecting the quality of life of its residents. ABoR also believes homeowners have a right to lease their homes, regardless of the length of the lease, without municipal licensing requirements or registration fees.” These two sentences contradict each other, show hypocrisy and dissembling, and expose ABOR for what it is–profit-mongers who will pollute the neighborhood environment at the expense of the people who live in Austin.

2) The fact that the City ignores and refuses to enforce the BOA ruling shows corruption plain and simple.

3) Any comment about STR properties being “gussied up” reminds me of what hookers do, but it’s still a sleazy business treading on the property rights of permanent residential property owners/renters expecting the “quiet enjoyment” of their properties and the stability and safety of long-term neighbors. Gussying up a property does not make illegal use of that property–to the detriment of neighbors–any more palatable.

5) When you call STR renters “guests”, you finally reveal the true nature of STR’s as commercial public accommodations in our neighborhoods.

6) If just one out of 100 STR renters prove to make neighbor’ lives hell one weekend, is that okay? Why don’t we have a zero-tolerance policy to protect residential residents (just as Code promises)? {MODERATOR EDIT: Removed inappropriate reference}

7) The number of STR’s in Austin has grown exponentially in just a few years, and will continue to do so. People fall for STR scams even in NYC. And most STR owners evade the Hotel Occupancy Tax (according to the City Controller), so they have already shown how shady their business really is.

8) If you really want to know what someone thinks, watch their feet, not their mouths. As DeepThroat said, “follow the money.” STR owners can make two to four times as much money from their “business” as can long-term rental landlords. They do it by diminishing our quality of life and removing housing stock for permanent residents.

David

7 Steve Crossland, REALTOR in Austin TX December 7, 2011 at 1:08 pm

Hi David,

Thanks for your comments. We obviously disagree on this issue. There is no “corruption”, just different points of view on how STRs in Austin should be handled. I don’t fault anti-STR people for being against STRs. I understand all the arguments against STRs. I just find the arguments to be without merit and unsupported by any facts or data.

I was at the Travis Heights presentation to SRCC the other night, where HomeAway presented. Afterward, I hung around to listen to the RPP (Residential Parking Permits) issues and the applicants for for RPPs describe the parking problems they are experiencing with the commercial encroachment of parking into the neighborhood.

Those testimonials, complete with data of actual parking counts at specific times of day, documented accidents, etc. are the kind of arguments/evidence that I find persuasive when someone is trying to argue a point or a cause.

There is no similar set of data or facts surround STRs that describe any actual problem. Just a bunch of people unhappy with the concept itself, yet not unhappy with the concept if the “strangers” happen to be staying in a “homesteaded” property. I’m still not even able to comprehend the reason that you anti-STR folks are not anti-STR if it’s a home owner leaving town for two weeks and letting others stay in the home.

Maybe you can explain the difference to me.

Steve

8 Ray December 7, 2011 at 5:55 pm

I’m confused. Do hotels (as opposed to home owners) pay property taxes per room that are in any way equivalent to those of individuals renting out their Austin homes, homestead or not homestead e.g., $4000+ per year per room – I think not as that would put the property tax bill at $400K per year for a 100 room hotel? If not (I think quite to the contrary some bizzarly get tax payer funded tax breaks to come to town) then why are they getting off easy in comparison? None of this makes much common sense and I agree appears to pose constitutional problems with regard to ownership rights of property. While a house is ‘being considered a hotel’ does the owner get a tax incentive or a property tax break? So, a crazy long term renter throwing parties every night and harassing the neighborhood for a year is better than a once in a very long while equally crazy short term renter? I think not. Is renting one weekend per 30 days e.g., for ACL actually any more of a burden on the neighborhood and any more or a hotel setup than renting 30 days straight at a time? Again, the anti STR logic is as consistent as swiss cheese. The rental rates of STRs are sufficiently high that troublesome guests are very unlikely to pay to be disruptive. These higher rentals lift property values not deflate them. I could go on.

9 vi December 13, 2011 at 1:38 pm

I dont really have an axe to grind here; but coming from the west coast I know several cities have similar restrictions on STRs. The common refrain seemed to be that STRs increase population density (think spring break groups renting houses), create traffic and parking problems like street cleaning issues and could even be dangerous if there were tsunami evacuations. Many of these coastal cities rely on neighborhood watch programs to complement the limited police presence. Homeowner is allowed a small number of STRs to account for time shares and also to allow for house sitters or for relatives/friends to stay when homeowner is on vacation.

10 etasch December 13, 2011 at 5:03 pm

“Homeowner is allowed a small number of STRs to account for time shares and also to allow for house sitters or for relatives/friends to stay when homeowner is on vacation.”

Seems like an extraordinarily reasonable solution.

11 Brett December 14, 2011 at 8:50 pm

Good conversation Steve. Excellent points Ray. It seems that the Allandale agitators would
rather fight than accept that they do not need to control the city. If there is corruption it likely
flows between the agitators and board members who were once on neighborhood councils,
etc. Check out Austin Rental Alliance, especially under MYTHS and FACTS…..it is pretty
enlightening.

12 Sue December 15, 2011 at 4:24 am

The actual vote at the Zilker Neighborhood Association meeting the month before the ANC vote was 19 to 17 Against the ANC Resolution. I am a Zilker resident and I was one of the 19 and a strong supporter of my beliefs on the issue. At the ZNA meeting, before the vote, I had suggested that Zilker should abstain from the ANC vote in order to more thoroughly study an issue on which the neighborhood was clearly divided. My suggestion was talked down by the Zilker officers, all of whom are staunchly anti-STR. I am sorry I do not remember their exact arguments, but they insisted, in the end, on a vote of For or Against the resolution.

I naively assumed that the 19-17 vote Against the ANC resolution meant that the Zilker representative to ANC would have to vote Against it. Imagine my shock when the Zilker representative abstained from the ANC vote. I felt betrayed. After the ANC meeting, when I asked the Zilker representative why he had voted that way, he told me in front of six witnesses that he “had been told to abstain.” Another Zilker officer told me I should be happy because it was what I had asked for.

With the neighborhood split on the issue, an abstention might be an appropriate interpretation of the neighborhood feelings on STRs. HOWEVER, I have a big problem with the ZNA officers interpreting this (forced Yes-No) vote on their own as an abstention with no public discussion with, or notification to, their neighborhood members at the meeting where the vote was taken or on their e-mail list afterward.

Why even vote on issues in the neighborhood if, in the end, the officers or the ANC representative is going to go off on their own and decide how to interpret that vote? If voting is interpretive instead of literal, then how much of a majority needs to win a vote for our officers to “interpret” that as a win? How much will their personal feelings on an issue sway their interpretation? (Would they still have abstained if the 19-17 Zilker vote had been For the ANC resolution?) Have other past votes in the organization been canceled and changed? How often does something like this happen in other neighborhood associations?

13 Jones August 1, 2012 at 8:31 pm

Great write up, and I appreciate the approach you take on this issue.
My concern first and foremost with the ordinance as proposed is this: as a parent I simply do NOT want to raise my kids next to a property with transient tenants. It would be one thing to allow neighborhoods to choose if they want to participate, but the ordinance as written gives no controls at all in that regard.
Color me paranoid, but I do suspect other parents feel the same way.
In the long run I fear this will have a very detrimental effect on community in Austin as people come to realize that they are better off just raising their kids in the ‘burbs.
I think there would be a lot less polarization on the issue if people felt like there was a little control of their community. As it stands I feel like Austin is changing the rules under me now.
So tell me from your perspective how you feel about my position? Am I justified in my feelings? Was I just wrong about what residential zoning means?

Thanks

14 O.M. Rust October 2, 2012 at 3:27 pm

Homes zoned SF1,2 or 3 should have some type of protection from neighbors that rent out rooms to individuals for longer than 30 days.
A couple that lives in another city bought a next to mine. It is not a homestead. They installed their 2 children, one who is a student at UT. The kids in turn rent out rooms. There are now 3 cars and a truck and trailer next door. Rather than using their “street frontage” they occupy mine and that of others. The yard is un kept, the back yard is full of “scat” up to the dog’s dew claws. It’s a bad scene with all the flies…
What to do, you’re damned if you do and damned if you don’t.

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