I personally don’t see a need for any limit on STRs, but the current limit seems reasonable and addresses any unrealistic fears that they could take over neighborhoods or the whole city will one day be STRs. The limits don’t seem to have been too burdensome on STR owners and addresses fears that opponents have. Generally, the STR ordinance that Chris Riley created has been effective and has been used as a model for cities around the country when they created their STR ordinance.
I’ve provided some information below that I wrote a few years ago that might answer some other random issues that come up when talking about STRs.
Myths Vs. Facts
STRs are “a commercial use"
Short-term rentals are being regulated under “residential” codes because the individuals using the properties are residents of the homes. That’s true whether you rent a home for one week or one year. That determination was made by the city’s Planning and Development Review Department in 2011 and is consistent with how we have always regulated other residential rental properties (those rented for longer than 30 days). Residential uses currently allowed under Austin city code under section 25-2-3 do include uses that provide “profit” and include nightly and weekly uses as permissible.
Short term rentals are not a commercial use of property any more than long term rentals are. They are generating income as a rental property the same way that someone would by renting their property on a long term basis. The length of the lease does not change the character of the home or its residential use. Renters and property owners should have the right to determine the length of their own leases. This should not be for the city to decide or for one neighbor to decide for another. They pay full property taxes just like everyone else and should have equal property rights. These legal rights have been upheld by court rulings throughout the country. Court rulings show that short term rentals are neither “commercial” nor a “business” and are in fact residential uses. http://www.jpatricksuttonlaw.com/page5/files/category-short-term-rentals.html
“Short term rentals are hotels”
Hotels house multiple families or people that don’t know each other under one roof, have a lobby, have onsite staff, provide meals, maintain exclusive rights to the property and do not offer legally binding residential leases to cover a room rental. Short term rentals have tenants with normal residential leases.
Short term rentals “have no on-site supervision,” they are “absentee landlords, ” “ The owners are corporations, out-of-state investors, or people are coming from out of the country to buy short term rentals”
The Short-term Rentals Audit (http://www.austintexas.gov/page/audit-reports), conducted compiled by the City of Austin, about short term rentals here in Austin shows that 92.1% of owners of short term rentals either live on the same property as their short term rental, live in Austin, or live right outside of Austin.
The Audit found that STR owners either live on the same property and if they don’t, they live an average of 3.5 miles away. Each owner only owns one rental on average. This shows the owners still live in the same neighborhood, which makes them just as invested in the neighborhood as other homeowners. They aren’t big corporations or people coming in to destroy the neighborhood. STRs require a lot of involvement from the owner, which goes against the argument that we are “absentee landlords.” The Audit did not find one example of someone from out of the country owning a short term rental in Austin.
Residential rental properties do not require on site supervision in any situation, whether a long term or short term rental.
“There will be many many more!”
The Audit only found 337 STRs properties where the owner doesn’t live on the same property (for the entire city of Austin). Non-owner occupied short term rentals are few in number and there’s no evidence that they are increasing in dramatic numbers from year to year as claimed. AirBnB’s Director of Government Relations says that over 90% of their clients are owner-occupants. Owner occupied homes are people that live in their home most of the time and just rent their house out on a short term basis a few times a year for events like SXSW.
“ Allows the loss of over 5500 single-family homes citywide - including over 3800 in AISD attendance zones - the equivalent of an entire small town.”*
“ Allows the loss of an unlimited number of apartment units citywide.”*
Council Member Riley’s proposal to limit the number of non-owner occupied short term rentals to 3% of the housing stock was simply a way to reach out to those that believed short term rentals were increasing in numbers and concerned about any potential problems in the future, however unlikely. These theoretical numbers are being used to make it seem like there are more non-owner short term rentals than there actually are. It avoids talking about the real numbers of short term rentals found.
"Drives up housing costs citywide.”
A report by the city organization tasked with creating and facilitating affordable housing, Austin’s Neighborhood Housing and Community Development, shows that STRs have no impact on housing prices in Austin. About 1/10th of 1% of houses in Austin are STRs. Out of all STRs in Austin the Audit only found 337 STRs where the owner doesn’t live on the same property. That’s not enough STRs in Austin to impact schools, change the value of homes, or displace families. There are currently thousands of homes listed on the MLS and any Austin family can purchase any one of them. I can see why people would be upset by the high property taxes, high home prices, and changing city demographics, but they are putting the blame on something unrelated.
- Allows commercial uses to cluster in a single school attendance zone, exacerbating enrollment impacts.
- Contributes to student mobility.
Opponents of STRs use the 78704 zip code and say that “schools in this area have already lost an estimated 132 students.” This is intentionally misleading. They don’t say that short term rentals were the cause of this loss. They simply imply that this loss has been from short term rentals because there is no evidence the two are related. Schools in central Austin are losing school children. That’s not in dispute, but according to Austin City Demographer Ryan Robinson it’s because of long term changes in population growth and demographic changes that are happening in cities and not because of STRs (http://www.abor.com/broker/Ten_Demographic_Trends_PDF.pdf). People are able to get more for their money and more room for their children in homes in the suburbs and so they are choosing to move there instead of in central Austin.
This claim about schools also assumes that short term rentals don’t add children to our schools, which does happen. Some STR owners would not be able to live in central Austin without the additional income that they provide for their families. Tenants often need to provide an address in order to enroll their children in the schools here during their stay. Some families need to bring their children with them during their short stay here in Austin and send them to school during that time. Some families need a house to stay in for a few months because they are just moving to Austin and either their new home isn’t ready to move into yet or they are in the process of searching for a home here.
“Nuisances, like noise and trash, are rampant in short-term rentals.”
“Short term rentals increase crime”
Short term rentals Makes “child safety zones” unenforceable.
According to the Short-term Rentals Audit, this is false. The audit shows that short-term rentals were the source of a very small number of complaints, including only 0.4 percent of 311 calls (to report non-emergency issues); 0.2 percent of 911 calls (for emergencies); and 0.2 percent of code compliance citations in Austin.
Tenants that rent STRs are not scary or dangerous people. They are generally people that have family in the neighborhhod that they rent in or they already live there. A large percentage of tenants stay for several months while renovating their homes. Their parents stay when they have a new child because their home is too small. Some Austinites either move to or purchase homes in the neighborhoods they stayed in after experiencing what it’s like to live in that neighborhood.
“The idea of a homeowner renting out rooms or their entire home occasionally is not the issue.“
When opponents talk about the number of short term rentals in Austin, they usually include all short term rentals whether owner occupied or non-owner occupied to make the numbers look bigger than what they really are. Opponents originally started their campaign to ban all short term rentals. Then they wanted to limit short term rentals to only 90 days a year and only owner occupied homes would be allowed to do this. Now they are saying that they are ok with owner occupied homes without a limit. It’s not clear why they changed their messaging, but it might have been because of push back from a lot of owner occupied homes and they now can target a small segment of Austin homeowners that don’t have as much power to fight back against a ban on their rental property.
“This is not about a few neighbors wanting to make some money.”
STRs have been attacked for wanting to “make money.” Unfortunately, people might not understand the nature of short term rentals. STRs do make more per month than long term rentals, but this additional income goes directly into the home and the monthly profit is roughly the same or less than long term rentals after expenses. Feel free to visit any short term rental in Austin or view pictures of them online through HomeAway.com. These homes are in amazing condition and fully furnished with expensive furniture. A lot of the time they are in better condition than owner occupied homes in the area. The owners are able to keep the homes in exceptional condition that they wouldn’t be able to do otherwise as a long term rental. Long term tenants just might not be the owner’s tenant preference. Long term tenants might not take care of the homes during their stays and owners aren’t able to notice and make repairs immediately when they are needed. These owners love their homes and spent a lot of time and money restoring them.
“Short term rentals are bad for Austin”
On top of property taxes STRs are also required to collect a 15%tax from tenants (http://www.austintexas.gov/department/hotel-occupancy-taxes). The city uses this money to fund the arts and other improvements that benefit everyone in the city (http://www.austin360.com/arts/boost-in-hotel-occupancy-tax-revenue-is-good-1885412.html). Short term rentals currently provide millions of dollars a year to the City of Austin through this tax. If short term rentals were banned, then all or part of this money would be lost. Taxes would either need to increase to cover the loss of revenue or funding for the arts would have to be cut to make up the difference. You can visit this website to see the list of organizations that officially support short term rentals (http://visitorsbenefitaustin.com/) because of the huge benefit that they provide to them in the way of funds. The list includes the Austin Children’s Museum to the Austin Gay & Lesbian Film Festival to the Austin Film Society. Many other organizations benefit from this money such as the “Austin Symphony, Ballet Austin, Conspirare, Zach Scott Theatre, and over 200 additional community arts groups.”