Type 2 Short Term Rentals in ADUs Resolution

#1

Another issue that we might want to consider weighing in on is the ban on Type 2 ADUs that the planning commission recommended. I’ve created an example resolution that I’ve been thinking about below.


Recently, the Planning Commission recommended banning short term rentals (STRs) in all accessory dwelling units (ADUs) and those recommendations were passed onto the city council for discussion. Friends of Austin Neighborhoods (FAN) does not support this policy and asks the city council to remove this requirement from the discussion about ADUs.

FAN recommends the following policies:

1) FAN suggests no changes to STR policies regarding ADUs

While FAN supports enhanced code enforcement to target the small number of problems STR properties around the city, FAN does not support taking the rights away from property owners to rent their homes out as STRs. For the 1,247 property owners who operate licensed and legally operating STRs few are problem properties. Banning STRs would not prevent STRs, but instead could drive them underground where they would remain unlicensed, unregulated, and untaxed (as seen in New York and other cities). The city of Austin would lose the hotel occupancy taxes paid on these properties. It’s estimated that $15 million in hotel occupancy taxes are collected yearly from STRs, according to the City and State Comptrollers reports.

STRs benefit our neighborhoods by providing a convenient place for neighbors to stay during remodels, provide housing for grandparents visiting their new grandchildren, provides local businesses temporary housing for their employees, provides housing for flood and fire victims, while allowing homeowners the ability to make additional income in order to help pay their increasing property taxes so they can continue to live in the Austin homes that they love.

2) If the city council decides to make changes, instead of a ban on ADUs, FAN suggests changing the licensing structure to change Type 1-Secondary into a Type 2 license.

Since Type 2 licenses are capped at a limited number of 3% per census tract, banning ADUs from being licensed as Type 2 short term rentals would free up those Type 2 licenses for other properties. More single family homes would then be allowed to be licensed as Type 2 STRs, so a ban on Type 2 STRs in ADUs would increase the number of Type 2 STRs that are single family homes. The city council would need to decide which is a better alternative - having the Type 2 STRs licenses in more single family homes or continuing to allow smaller ADUs to continue to have Type 2 licenses in place of those single family homes.

A better approach might be to make all ADUs that the owner does not reside directly in to be considered a Type 2 STR. Type 2 STRs are limited to a small number of licenses in each census tract. There is currently no cap on Type 1-Secondary STRs. Changing Type 1-Secondary licenses into Type 2 would mean that ADUs would be moved into this limited category and ensure that all STRs in full dwelling units are limited. This could address the concern that many have about STRs. Type 1 licenses would then only be for homes where the owner lives in them as their primary residence.

3) If the city council ultimately decides to ban Type 2 STR ADUs, FAN suggests grandfathering in all currently licensed and tax paying Type 2 STRs that are ADUs.

Licensed homeowners and property owners relied substantially on the regulatory framework that the City of Austin created with the short term rental ordinance. They invested their money, resources, and housing choices because of that promise and the city of Austin should owner that commitment for licensed and tax paying owners.

When originally passing the short term rental ordinance regulating multi-family STRs the city council passed similar language to grandfather in existing multi-family STRs that had been licensed and operating legally before the passage of the new regulations. The language for that has been included below. Language similar to this could be added to any new STR regulations regarding ADUs.

“PART 4. For 90 days following the effective date of this ordinance, a short-term rental
(Type 3) application submitted under Section 25-2-791 (License Requirements) is exempt
from short-term rental density caps if the director determines that use of the dwelling unit
or partial unit as a short term rental existed before September 26, 2013.”

From STR Ordinance: http://www.austintexas.gov/edims/document.cfm?id=199458

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#2

I made some changes. Please let me know if you have any recommended changes, additions, or anything to remove!


The Planning Commission recommended banning short term rentals (STRs) in all accessory dwelling units (ADUs) and those recommendations were passed onto the city council for discussion. Friends of Austin Neighborhoods (FAN) does not support this policy.

FAN Recommendation: No Ban on STRs in ADUs

While FAN supports enhanced code enforcement to target the small number of problem STR properties around the city, we do not support banning STRs in ADUs. For the 1,247 property owners who operate licensed and legally operating STRs, few are problem properties.

STRs benefit our neighborhoods by providing a convenient place for neighbors to stay during remodels, provide housing for grandparents visiting their new grandchildren, provides local businesses temporary housing for their employees that work near our neighborhoods, provides temporary housing for flood and fire victims, while allowing homeowners the ability to make additional income in order to help pay their increasing property taxes so they can continue to live in the Austin homes that they love.

First Alternative Recommendation: Change Type 1-Secondary to Type 2

While FAN recommends no changes to STRs in ADUs, an alternative to banning STRs in ADUs would be to change the Type 1-Secondary license (where the owner lives on the property, but not in the ADU or structure) into a Type 2 license. Currently, Type 1-Secondary STRs are not limited in number. Since Type 2 licenses are capped at 3% per census tract, this change would guarantee that ADUs being used as STRs would be limited in number like other STRs. Existing licensed Type 1-Secondary ADUs would then count towards the 3% cap for Type 2 licenses and take up licenses that would have otherwise gone to other dwellings. Those concerned about new ADUs being used as STRs could be assured that they are limited in number.

Second Alternative Recommendation: Grandfather Existing Type 2 STR ADUs

While FAN does not recommend banning Type 2 STRs in ADUs, FAN suggests grandfathering in all currently licensed and tax paying Type 2 STRs that are ADUs, if there is a ban.

Licensed homeowners and property owners relied substantially on the regulatory framework that the City of Austin created with the short term rental ordinance. They invested their money, resources, and made housing choices based on the City of Austin STR ordinance. The city of Austin should honor that commitment for those homeowners that already have a STR license.

When passing the short term rental ordinance regulating multi-family STRs the city council passed similar language to grandfather in existing multi-family STRs that had been licensed and operating legally before the passage of the new regulations. The language for that has been included below. Language similar to this could be added to any new STR regulations regarding ADUs.

“PART 4. For 90 days following the effective date of this ordinance, a short-term rental
(Type 3) application submitted under Section 25-2-791 (License Requirements) is exempt
from short-term rental density caps if the director determines that use of the dwelling unit
or partial unit as a short term rental existed before September 26, 2013.”

From STR Ordinance: http://www.austintexas.gov/edims/document.cfm?id=199458

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#3

Possible simplified resolution:


The Planning Commission recommended banning Type 2 short term rentals (STRs) in accessory dwelling units (ADUs) and that recommendation is being considered by the Planning and Neighborhoods Committee on August 17th. Friends of Austin Neighborhoods (FAN) does not support this policy.

FAN Recommendation: No Ban on Type 2 STRs in ADUs

While FAN supports enhanced code enforcement to target the small number of problem STR properties around the city, we do not support banning STRs in ADUs. For the 1,247 property owners who operate licensed and legally operating STRs, few are problem properties and a ban on STRs in ADUs would not address these issues.

The current STR ordinance limits Type 2 STRs to a small number of 3% of dwellings per census tract. Since there are a limited number of licenses for Type 2 STRs, the practical impact of banning Type 2 STRs in ADUs would be that those limited licenses would be freed up to be used for single family homes instead.

STRs benefit our neighborhoods by providing a convenient place for neighbors to stay during remodels, provide housing for grandparents visiting their new grandchildren, provides local businesses temporary housing for their employees that work near our neighborhoods, provides temporary housing for flood and fire victims, while allowing homeowners the ability to make additional income in order to help pay their increasing property taxes so they can continue to live in the Austin homes that they love.

Alternative Recommendation: Grandfather Existing Type 2 STR ADUs

While FAN does not recommend banning Type 2 STRs in ADUs, FAN suggests grandfathering in all currently licensed and tax paying Type 2 STRs that are ADUs, if there is a ban.

Licensed homeowners and property owners relied substantially on the regulatory framework that the City of Austin created with the short term rental ordinance. They invested their money, resources, and made housing choices based on the City of Austin STR ordinance. The city of Austin should honor that commitment for those homeowners that already have a STR license.

When passing the short term rental ordinance regulating multi-family STRs the city council passed similar language to grandfather in existing multi-family STRs that had been licensed and operating legally before the passage of the new regulations. The language for that has been included below. Language similar to this could be added to any new STR regulations regarding ADUs.

“PART 4. For 90 days following the effective date of this ordinance, a short-term rental
(Type 3) application submitted under Section 25-2-791 (License Requirements) is exempt
from short-term rental density caps if the director determines that use of the dwelling unit
or partial unit as a short term rental existed before September 26, 2013.”

From STR Ordinance: http://www.austintexas.gov/edims/document.cfm?id=199458

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#4

Thanks for starting this discussion and kicking it off with some draft language for a resolution that FAN members could consider.

I myself am not particularly knowledgeable on short-term rentals (STRs), the different types, and what the pros and cons are. And what happens when we look at them through the lens of FAN’s vision?

Some opponents of STRs contend they constrict housing supply, because visitors occupy them instead of residents living in them. Is this argument valid? Is it short-sighted?

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#5

The market doesn’t allow for many Type 2 short term rentals in Austin, which from knowing the industry is over saturated as it is and wouldn’t provide for many more Type 2 STRs. Even if it did, the current STR ordinance has a set 3% cap on the number of licenses in a given census tract guaranteeing that STRs can’t be more dense in one specific area. There are only a few licenses available for Type 2 STRs in each census tract. The number of Type 2 STRs has actually remained stable over the last few years also, showing that there has been no increase in the number of new Type 2 STRs.

There are 5 census tracts capped at the maximum number of STRs, showing that the STR ordinance is working how it was intended to work. Once the cap is reached, owners go on a waiting list and as soon as a license becomes available then the next person on the waiting list gets the license. The ordinance has been effective at keeping the number of Type 2 STRs down in these few census tracts like around Zilker where they might be more popular.

From all of the hype, people would probably think there are thousands of Type 2 STRs (where the owner doesn’t live there), but there are only about 367 in all of Austin according to code enforcement (https://www.austintexas.gov/article/austin-code-quarterly-reports). Code enforcement says that Type 2 STRs have near 100% compliance with regard to registration, so almost all Type 2 STRs are registered. There are 337,391 housing units in Austin so the 367 Type 2 STRs is just one thousands of one percent of housing. I would say the restrictive land development code is far more of an issue than 367 houses or dwellings being used as STRs.

Most registered STRs are Type 1 - the type for homeowners that rent their houses out for festivals, so those couldn’t even be considered taking away housing stock.

Traditional short-term rentals generate ~$150 million in economic impact to the Austin area, and directly contribute an estimated $15 million in hotel occupancy tax. That tax benefits the Cultural Fund – which funds more than 200 local culture groups - according to the City and State Comptrollers reports and the economic impact calculator published by the US Conference of Mayors.

In regards to code complaints, short term rentals were actually found to have a lower rate of complaints and violations than owner occupied homes when the city did an audit (http://www.austintexas.gov/sites/default/files/files/Auditor/au12115.pdf)

You can see here the number of licenses in each census tract. Most census tracts only have one STR license. It also shows how many Type 2 licenses are allowed in each census tract.

http://www.austintexas.gov/page/percent-strs-issued-census-tract

Here’s a map of the census tracts in Austin to get an idea of how Type 2 STRs are capped:

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#6

Roger, are there other issues that the resolution should address?

My wife and I stayed in a STR while we were looking for a house when we first moved to Austin. We really wouldn’t have had another temporary option for a few months while we did that. A lot of people that stay in my STRs are in similar situations. Some end up moving to Austin after staying in a STR or decide they want to live in a certain neighborhood after staying there for a month or so. It seems like being welcoming to everyone would also include those visiting our neighborhoods. =) Temporary housing options could also fit into the diverse housing category!


The Planning Commission recommended banning Type 2 short term rentals (STRs) in accessory dwelling units (ADUs) and that recommendation is being considered by the Planning and Neighborhoods Committee on August 17th. Friends of Austin Neighborhoods (FAN) does not support this policy.

FAN Recommendation: No Ban on Type 2 STRs in ADUs

While FAN supports enhanced code enforcement to target the small number of problem STR properties around the city, we do not support banning STRs in ADUs.

There are 337,391 housing units in Austin and there are approximately 367 Type 2 STRs - or one thousands of one percent. Type 2 ADUs make up only a few of these 367 Type 2 STRs. The current STR ordinance limits Type 2 STRs to a small number of licenses - 3% of dwellings per census tract, making sure that no one census tract has too many Type 2 STRs (addressing “clustering” concerns) and limiting their number city wide (addressing housing stock concerns). The current STR regulations in place provide sufficient limits.

STRs benefit our neighborhoods by providing a convenient place for Austinites to stay in their own neighborhoods during remodels, allow temporary housing for people relocating to Austin, provide housing for visiting family, provides local businesses temporary housing for their employees that work near our neighborhoods, provides temporary housing for flood and fire victims, while allowing homeowners the ability to make additional income in order to help pay their increasing property taxes so they can continue to live in the Austin homes that they love.

STRs generate ~$150 million in economic impact to the Austin area, and directly contribute an estimated $15 million in hotel occupancy tax. That tax benefits the Cultural Fund - which funds more than 200 local culture groups, according to the City and State Comptrollers reports and the economic impact calculator published by the US Conference of Mayors.

Grandfather Existing Type 2 STR ADUs

While FAN does not recommend banning Type 2 STRs in ADUs, FAN suggests grandfathering in all currently licensed and tax paying Type 2 STRs that are ADUs, if there is a ban.

Licensed homeowners and property owners relied substantially on the regulatory framework that the City of Austin created with the short term rental ordinance. They invested their money, resources, and made housing choices based on the City of Austin STR ordinance. The city of Austin should honor that commitment for those homeowners that already have a STR license.

When passing the short term rental ordinance regulating multi-family STRs the city council passed similar language to grandfather in existing multi-family STRs that had been licensed and operating legally before the passage of the new regulations. The language for that has been included below. Language similar to this could be added to any new STR regulations regarding ADUs.

“PART 4. For 90 days following the effective date of this ordinance, a short-term rental (Type 3) application submitted under Section 25-2-791 (License Requirements) is exempt from short-term rental density caps if the director determines that use of the dwelling unit or partial unit as a short term rental existed before September 26, 2013.”

From STR Ordinance: http://www.austintexas.gov/edims/document.cfm?id=199458

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#7

@Pete_Gilcrease This is an amazing write-up and helpful info. I hope it serves as the initial draft of a resolution that FAN members can consider.

All, I think we still need a more basic primer and discussion of the difference between type 1 and type 2 STRs. And we need to be able to answer the following questions:

  1. Should there be any limits on STRs in the city? If so, why? If not, why not? Which types? Why does the type matter?
  2. What are the economic effects, beyond providing additional income for homeowners and tax benefits to the city, of STRs on housing supply and household affordability?
  3. What’s the one, two, or three sentence “pitch” for STRs (unrestricted, or with limited restrictions)?

If we want informed and passionate consideration of this issue by FAN members, they need both a “wonky” and a simple “emotional” grasp of it.

All are welcome to jump in!

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#8

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.”

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#9

After seeing the drafts of the other two resolutions a shorter resolution for this would probably be better.


FAN Does Not Support a Ban on Type 2 STRs in ADUs

The Planning Commission recommended banning Type 2 short term rentals (STRs) in accessory dwelling units (ADUs) and that recommendation is being considered by the Planning and Neighborhoods Committee on August 17th. Friends of Austin Neighborhoods (FAN) does not support this policy.

Out of all new ADUs permitted in Austin between 2004 - 2014 there are approximately 12 ADUs that are Type 2 STRs showing that there is not an abundance of Type 2 STRs in ADUs. The current STR ordinance limits Type 2 STRs for all dwelling types to a small number of licenses - 3% of dwellings per census tract, making sure that no one census tract can have many Type 2 STRs (addressing “clustering” concerns) and limits their number city wide (addressing housing stock concerns). The current STR regulations in place provide strict limits and even without the limits the data suggests there would be few Type 2 STR ADUs in Austin.

FAN supports abundant and diverse housing in Austin; including temporary housing options. STRs benefit our neighborhoods by providing a convenient place for Austinites to stay in their own neighborhoods during remodels or between houses or between leases, allows temporary housing for new Austinites relocating to Austin, provides housing for visiting families, provides local businesses temporary housing for their employees that work near our neighborhoods, provides temporary housing for flood and fire victims, while allowing homeowners the ability to make additional income in order to help pay their increasing property taxes so they can continue to live in the Austin homes that they love. FAN does not support the policy that would ban Type 2 STRs in ADUs.

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#10

Peach and I are out to the country till Monday, but having skimmed through all of Pete’s postings, we agree with him on this issue. We like the shorter resolution, but will have to look into the details when we get back next week. Thanks for taking this issue up, Pete.

Cynthia

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#11

I feel that STR 1’s need to be clarified. They cannot just be characterized as homes that the owners rent out only for special events. They are OWNER-OCCUPIED and a designated homestead. Here is the definition from the COA: “TYPE 1 - owner occupied, a designated homestead. Type 1 Rentals Must:
 be rented for periods of less than 30 consecutive days
 be owner-occupied or associated with an owner-occupied principal residential unit at least 51% of the time
 be a designated homestead
 include the rental of an entire dwelling unit”

Our garage apartment on our property is an STR-1. And we had to go to great lengths during construction to provide additional parking for guests. So, I’m having trouble understanding why everyone wants to build an ADU for their aging parents who no longer drive…so they don’t have to comply with parking requirements. If the ADUs are on an owner-occupied property, wouldn’t they be an STR-1 and not fall under the STR-2 cap? If an owner wants to build an ADU on his or her property that is NOT owner occupied, that is just another way to avoid the compliance issues other STR-2 owners have AND provide another apartment that competes with those under the STR-2 cap. If every STR-2 property had an additional ADU…doesn’t that double the number of STRs in a census tract?

Help me understand why ADUs should even be allowed on STR-2 properties. And NOT have to comply with the parking requirements for another dwelling unit on the commercial property, and be exempt from the cap?

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#12

Quick Question:
1247 STRs purportedly yield $15M in hotel taxes - the $10K+ per STR per year seems pretty high…

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#13

It definitely is a lot! Most people don’t know how much in hotel occupancy taxes that STRs contribute and benefit our city. That’s probably why a lot of arts nonprofits support short term rentals, including Austin Children’s Museum, Austin Creative Alliance, Austin Film Festival, Austin Film Society, Austin Gay and Lesbian Film Festival, Austin Music Foundation, Austin Studios, Austin Theatre Alliance, Fun Fun Fun Fest, Paramount Theatre, State Theatre (now known as Stateside at the Paramount), the Austin Film Society and Austin Studios. About how the occupancy taxes benefit the arts (http://www.austin360.com/news/entertainment/arts-theater/boost-in-hotel-occupancy-tax-revenue-is-good-new-1/nRft5/)

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#14

Tovo is introducing a possible ban on STRs in all new ADUs in the future on Oct 15th.

While I don’t believe there needs to be further regulations and restrictions on STRs since the data shows there are only a few STRs in ADUs city wide of any type (possibly as few as 24 of any type - 12 Type 1A and 12 Type 2), instead of a ban on STRs in new ADUs, an alternative could be to roll Type 1A into the 3% cap like all other STRs. If the city council requires STRs in all ADUs to count toward the 3% cap, there’s no reason to ban STRs in new ADUs for any type.

What will happen if new ADUs are banned from being STRs?

1) Homeowners may not be able to afford to stay in their homes

  • Providing some homeowners the ability to have an STR in their ADU behind their home might mean the difference between being able to stay in their homes or having to sell the homes that they love and move out of Austin. With increasing property taxes homeowners need options in order to stay in their homes. Homeowners building new ADUs should have the same rights as those that already have ADUs.

2) Housing stock may be reduced in Austin

  • Many owners may only build an ADU if using it as an STR is an option for it to make sense for them financially. We need to encourage building new housing stock whenever possible. Today’s ADU being used as an STR will be tomorrow’s long term rental or owner occupied unit, similar to filtering with newer long term rentals. Most STRs aren’t STRs for long and have a high turnover rate of only a few years until they are converted into a long term rental or owner occupied residence. STR licenses don’t transfer and so the next owner wouldn’t be able to use the ADU as an STR if the census tract is capped. Few could take advantage of this if STR licenses are limited to 3%, but every new housing unit we can get in Austin is valuable. There’s no reason to take this option away from a certain housing type over others.

3) More single family homes will become STRs

  • Since there is a limited number of licenses available per census tract (3%), the STR licenses that would have gone to ADUs will then be taken up by single family homes instead. What policy does the city council want to encourage? Should the limited STR licenses of 3% per census tract be exclusively single family homes or should they be spread out over several housing types so not one housing type is being exclusively used for STRs?

Friends of Austin Neighborhoods opposes banning type 2 short term rentals in accessory dwelling units.

Resolution (http://www.atxfriends.org/votes/):

The Planning Commission recommended banning Type 2 short term rentals (STRs) in accessory dwelling units (ADUs) and that recommendation is being considered by the Planning and Neighborhoods Committee on August 17th. Friends of Austin Neighborhoods (FAN) does not support this policy.

Out of all new ADUs permitted in Austin between 2004 – 2014 there are approximately 12 ADUs that are Type 2 STRs showing that there is not an abundance of Type 2 STRs in ADUs. The current STR ordinance limits Type 2 STRs for all dwelling types to a small number of licenses – 3% of dwellings per census tract, making sure that no one census tract can have many Type 2 STRs (addressing “clustering” concerns) and limits their number city wide (addressing housing stock concerns). The current STR regulations in place provide strict limits and even without the limits the data suggests there would be few Type 2 STR ADUs in Austin.

FAN supports abundant and diverse housing in Austin; including temporary housing options. STRs benefit our neighborhoods by providing a convenient place for Austinites to stay in their own neighborhoods during remodels or between houses or between leases, allows temporary housing for new Austinites relocating to Austin, provides housing for visiting families, provides local businesses temporary housing for their employees that work near our neighborhoods, provides temporary housing for flood and fire victims, while allowing homeowners the ability to make additional income in order to help pay their increasing property taxes so they can continue to live in the Austin homes that they love. FAN does not support the policy that would ban Type 2 STRs in ADUs.

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