Short-Term Rental Ordinance Would Harm Small Businesses, Put End to Dallas’ Neighborhood Ambassadors
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By Jeff Veazey
Party houses and property rights — between the people who are for a reasonable short-term rental ordinance and the people who want to ban everything they disagree with, there are people who are impacted economically.
A local property manager for a small HOA, Blaise Genco, has no short-term rental property of his own, but has a member of his association who does have an STR.
“What the city is considering is ridiculous and will only hurt the city and property owners,” Genco said. “It will bring down tourism and much-needed money spent in our local shops. It seems particularly poorly thought out during this time period of the pandemic.”
An Austin business owner, Azure Grillo, considered what a restrictive ordinance, like the one Austin adopted and has been held unconstitutional by the 3rd Court of Appeals, would mean for her frequent Dallas business trips.
“I do not believe that I could effectively and financially conduct my business in Dallas. Due to the size of the team and especially during the pandemic, short-term rentals allow me to keep my costs low, and my team together,” Grillo said. “I look to the short-term rental as my primary lodging source when I come to Dallas.”
More importantly are the cleaners, contractors, and local businesses that serve STRs. Many of Dallas’ best businesses and a number of STRs are not in the central business or high tourist traffic areas. Coffee shops, restaurants, and small retail in neighborhoods like Oak Cliff, and the White Rock area, profit from people staying at nearby STRs.
”We’re a neighborhood diner, but we have benefited from the short-term rentals in our area,” said George Sanchez, owner of Goldrush Cafe in East Dallas. “Owners take our menu home and have it available to their guests. It isn’t a huge part of our business but every meal counts when you are small.”
An East Dallas host shared some of his guest reviews, which highlight how hosts feed the economic health of their neighborhoods acting as ambassadors for the city.
“…hosts were incredibly hospitable… communicated about local food places, such a peaceful experience in a quiet neighborhood…”
Tess
“We were new to Texas… [hosts] offered suggestions about where to find apartments, locations to visit, places to eat…”
Naveena
“…hosts… were welcoming and great with contact and information.”
Michael
Sometimes the short-term rental debate seems like another thing that divides us. It is important to remember that no one wants to live next to a party house and there are a lot of good people who get hurt when we target real problems with unreasonable, overreaching solutions.
The role of government is governance. That means not restricting private property rights or the economic activity of 99 percent of the people simply because Code Enforcement is not cracking down on the 1 percent.
Jeff Veazey is a retired housing lawyer, the former Directing Attorney of the Dallas Tenants Association, and a short-term rental owner/operator.
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A study by the Economic Policy Institute, a independent, non-profit think tank, found the economic costs Airbnb’s imposes on cities & its residents likely outweigh any economic benefits derived from short term rentals.
Key Findings:
– The potential benefit of increased tourism [from #STRs] supporting cities’ economies is much smaller than commonly advertised.” “2 surveys indicate that only 2-4% of those using Airbnb would not have taken the trip were Airbnb rentals not available.
– Rising housing costs are key problem for American families & evidence suggests that the presence of Airbnb raises local housing costs.
– City residents suffer when Airbnb circumvents zoning laws that ban lodging businesses from residential neighborhoods.
https://www.epi.org/publication/the-economic-costs-and-benefits-of-airbnb-no-reason-for-local-policymakers-to-let-airbnb-bypass-tax-or-regulatory-obligations/
For more information on why we should protect Dallas’s residential neighborhoods from commercialization by the STR industry, please visit:
https://www.txneighborhoodcoalition.com/
Please be specific about what parts of the proposed ordinance you find to be wrong. Simply demeaning others who have a differs viewpoint is poor journalism. I want the facts, and this is a highly emotional opinion piece. Quoting people who don’t live here but travel here is also silly in my opinion. Why do I care about their opinion when I am the one impacted 24/7? Show me why it’s in my best interests to be against this proposed ordinance. You mentioned various workers and they will have work if these STR are single owner. So that’s their best interest over the neighborhood who is impacted once again. How can you make neighborhoods buy your argument?
When STR operators talk about the economic impact of STRs, how come they never mention the long-term renters who have to pay higher rents due to the influx of STRs in their communities, the longterm renters who are evicted so their home can be converted into a STR, first time home buyers who struggling to buy a home because they are competing against STR investors for the few homes that are available in the current market, or the local taxpayers who are being forced to pay for all the 911 & 311 calls generated by unsupervised STRs?
The Harvard Business Review found as the number of Airbnb listings in a city increase, so do rent prices for locals.
https://hbr.org/2019/04/research-when-airbnb-listings-in-a-city-increase-so-do-rent-prices
A recent audit of 1% of the 4110 Airbnb listing believed to be operating in Dallas found the over a period of 7 months, responding to 911 & 31 calls at just 41 STRs cost Dallas taxpayers over a half a million dollars. STRs privatize profits while outsourcing costs to cities and neighbors.
https://www.fox4news.com/video/914474?fbclid=IwAR11EZuBbDUzN_x884f0olEzzCjeAsKHFm6Ce5-Q7Palua92aEkIy3u7Iyw
Another recent study found an increase in the number of Airbnb listings in a neighborhood could be used to predict an increase in violent crime in that neighbor in the subsequent year and beyond.
https://poseidon01.ssrn.com/delivery.php?ID=004020091089127118025083015094003075120015077012021005105006110113075121101112108030041107053119007034112080088108122077029006053026022082043003067010115073064124004027040024008123116094025075126096100105007097110113094011081103008109119009080100017092&EXT=pdf&INDEX=TRUE
When true neighbors are replaced by commercial businesses whose entire business model is built around bringing a revolving door of non-resident strangers into a residential neighborhood, that brings with it a loss of community and safety that negatively impacts the residents in that community. According to the Dallas Police Department, “getting to know your neighbors’ habits and vehicles allows you to know when something is suspicious or out of the ordinary.” Short term rentals operating in residential areas make forming an effective neighborhood crime watch group that allows neighbor to look out for each other’s safety and the safety of their homes nearly impossible.
https://www.dallaspolice.net/division/northcentral/crimewatch
Property rights are not absolute. They are subject to zoning which has been recognized by the Supreme Court as a Constitutional use of cities’ municipal police power for nearly 100 years. Neighbors invested in their homes in reliance of existing residential zoning laws and the good faith belief that their residential zoning would protect them from having a commercial business pop up next door. STR operators in Dallas are seeking to circumvent those longstanding residential zoning laws in order to commercialize residential neighborhoods for their own personal profit and to the detriment of their neighbors.
Contrary to what Mr. Veazey stated, Texas cities have ample legal authority to regulate and zone short term rentals in order to protect the availability of housing for locals and the safety and quality of life of residents who invested in their homes in reliance on existing residential zoning laws that prohibit commercial businesses in residential areas. The Dallas City Council put the needs and best interests of residents ahead of transient tourists and STR investors seeking to profit off the commercialization of Dallas’s residential neighborhoods.
https://static1.squarespace.com/static/5bc37b7c755be2603ca0b7b3/t/606077a426611066ba4ebbee/1616934820662/TX+Cities+Have+Ample+Legal+Authority+to+Address+the+Problems+STRs+Create.pdf
For years I represented low income clients in housing matters. I don’t believe I argued anywhere in my opinion piece for the STR-entification of neighborhoods. I certainly am unprepared and unwilling to defend any “landlord” who is in any way “absentee”, negligent, disrespectful, uses any legal device to shield their identity or contact information, or any of the other sleazy landlord tricks that have been happening to renters for years without an outcry from the neighborhood.
I have a driveway big enough to accommodate two cars at most without anyone parking on the street. We can accommodate 4 people but at 400 sq feet 1 or 2 people is ideal. We host interns from Grad Schools and Universities here for three months (hard to rent places for less than a year) or the FEMA guy who was here 28 days working in support of disaster relief in Houston. (He has a mandate to find the cheapest adequate accommodation). We prefer longer term – less sheets to change – but we like to help out artists when they are here for Artfest or the vendors at Earth Day. They can’t afford hotels. So we are some time short term and longer term when we can get it. We thought we were doing the city a favor and we have not had one complaint or even a suggestion from our neighbors. When we ask, they say they never even notice we are having guests unless they happen to see a different car in the driveway.
I realize other people have unbearable situations because there is less direct property management of the property that is creating the disturbance. I do see that side and it is extremely important to me as an owner occupied, working in the spirit in which it was conceived, to help rid my neighbors of the folks who are an extreme nuisance.
Losing the option of short term (owner occupied ban is still on the table in Dallas) would cause my wife and me a lot of anxiety and retirement income. Maybe we’ll rent the 1500 sq ft house out and move in to our bungalow.
Taxpayers in Dallas are subsidizing short-term rentals by paying millions of tax dollars to respond to the multitude of complaints made to 911 and 311. (We’ve got the data.)
State tax law defines STRs as HOTELS. We did not purchase our homes to live next door to a commercial hotel.
About 75 percent of the 4,118 Airbnb listings in Dallas (the majority of which are whole houses and whole apartments) are run by people who have 5+ properties each. (Data from Murray Cox, internationally known analysis with InsideAirbnb.)
The STR industry tried, but failed in its effort to spin this as a bunch of small homeowners trying to pay their taxes. That may be true for a small percentage, but the majority of owners and operators here in Dallas and nationally have multiple listings. Can YOU afford to own and operate 2 or three homes, much less 5 or more? (We have this data, too.)
Please look at the facts.
The bottom line is that STRs are a commercial business. Most of them are NOT occupied by their owner, many of whom are investors who don’t even live or work here. We don’t have a neighbor. We have a HOTEL next door.
If we allow hotels to operate here, what’s next? It’s a land-use question of operating a commercial business in a residential neighborhood. Let them flourish in commercial zoning and mixed-use areas, where they belong.
OT – Thanks for your comment. I am a mom and pop operation. One unit attached to my house. In almost 4 years, no complaints and my next door neighbor, with two children under the age of 4 sent me a message the other day: “I would not want to live next to a party house or a hotel. Your Airbnb though, is a compliment to the neighborhood. You all are so respectful and all your guests have been, too. We hardly notice and have never been disturbed.” I have lived in the neighborhood off and on since I was 14. I have lived on the east side of the lake most of my life. I would never do Short Term Rental without being on site. My place is about 400 sq. ft., no kitchen. Here is who I rent to: families of neighbors who are in town and want to be near their family, State Fair goers, artists who are vendors at an event at the Arboretum who need to stay close and old high school (Bryan Adams) friends in town for Dallas Blooms, and because we are small, on site, and stress the beauty and quiet of the neighborhood, we get people looking to discover the side of Dallas that those of us who have lived here for 50 plus years enjoy. You make important points. I am trying to keep my house in retirement and would never do anything or allow anything that would disturb my neighborhood.
Airbnb & Vrbo use hosts like you who only have 1 short term rental where they are on-site as human shields in order gain to favorable regulations for their commercial operators who own multiple whole house listings that they don’t live in.
Rent Responsibly, the organization that put together and is coaching the Dallas STR group has 5 paid employees, none of whom live in Dallas. Who do you think Rent Responsibly gets their funding from? Whose interests do you really think they’re looking out for? Hint – it’s not the little guy. In recent years, most of Airbnb’s growth & profits have come from multi-unit STR operators.
https://www.ft.com/content/1afb3173-444a-47fa-99ec-554779dde236
I highly recommend you read this report about Airbnb is infamous for propping up and funding local host groups to do their dirty work for them.
https://www.ft.com/content/1afb3173-444a-47fa-99ec-554779dde236
Jeff – Your response here is quite odd. You fight hard for STRs in general, and that’s clear by your many public posts on the topic, but when questioned you back away and claim you are just a little guy. You know that STRs don’t belong in single-family neighborhoods, and you know that any answer other than ‘no STRs’ leaves loopholes for party houses. You know it, I know it and anyone who lives within an earshot of an STR knows it. As an attorney in this field, I’m certain you understand the unfortunate nuances within City of Dallas leadership and its lack of resources, so I’m certain you can make the connection that party houses are rarely responded to in a timely manner. As an OLH resident, I appreciate you keeping your property quiet and understand it’s comparatively a very small operation, but you are running with the beast and not against it. I’m disappointed in your position on this topic. You should be fighting against the hosts who will inevitably ruin your AirBnB venture/retirement plan, not spouting off general support for STRs while your fellow neighbors are suffering.
Replying to all the critics here, I would ask how much does the city spend going to non-STR disturbances? Did you audit that? You do realize that you might be able to get an ordinance that gets the city in a protracted legal fight for several years. And then lose like Austin did. Did you audit the cost of that? You might be able to get zoning changed in 2 or 3 years. STR owners in Dallas want a well-regulated industry. STR owners are helping the city shut down party houses and register all owners. There are almost no major cities that have completely banned STR’s. I have stayed in STRs in New Orleans, Los Angeles, NYC, Cambridge, MA, Amarillo, Austin, Cortez, CO, Albuquerque, Annapolis, Providence, RI, and Brunswick, NJ and my choice is to travel and not stay in hotels. I was a low-income housing lawyer for years. My STR doesn’t have a kitchen. How is that impacting low income housing? It is important for Anti-STR people to think this through. Are we zoning people from having guests visit and stay in their home if they are out of town? They’re strangers. You do realize it is pretty well settled that I can keep using Airbnb as my platform and rent for an entire month to one person, and the next month rent to someone else, etc.? Finally, if STR’s are banned then we’ll start renting our house out. Now, the people who helped make this neighborhood great will be at Grand Canyon out of cell phone range when the people we rent to on a one year lease start having parties. How is it helpful to squeeze out long time residents who are trying to stay in their neighborhood and respect the neighbors, and need a little extra income? BTW, almost 4 years of STR, 4.9 rating out of 5, Super-host, never had a complaint, never had a rowdy guest, always been present on the property whenever we had a guest. Further, have had 6 rentals from people in the neighborhood who needed extra room for relatives. Provided 3 families free places to stay when they lost heat, power, or water during the big Feb freeze out, have provided shelter in emergency situations for free to others. Dallas used to be the “All-American City” and a “Can Do” City. Dallas has a Street racing problem. Should we ban all cars? Get rid of the bad, keep the good.
Dallas STR hosts keep referring the Zaatari case without actually understanding the Zaatari case. Zaatari v. the City of Austin has an unique set of facts that are not applicable to Dallas. In 2012, Austin passed a misguided short term rental ordinance that allowed STR 2’s (full-time, whole house STRs that are not the owner’s primary residence) to operate in residential areas. In 2016 when the city realized that neighborhoods were being overrun and absentee-investor owned STRs were causing tons of issues, they passed a new ordinance that would have phased out all STR 2’s by 2022. The 3rd Court of Appeals said the city couldn’t retroactively phase out the STR 2 licenses THAT HAD ALREADY BEEN GRANTED, but Austin is still not required to grant any NEW STR 2 licenses. In Dallas, the city has never granted STR operator’s permission to operate in residential zones, so there is no issue of retroactivity. You’re belief that an ordinance zoning STRs would be thrown out by the courts in misguided. A group of STR operators tried to get an injunction against Arlington’s STR ordinance citing the Zaatari case and their injunction request was denied because like in Dallas, STRs were never a permitted land use in residential zones. Two years after it’s passage, Arlington’s STR ordinance is still in full effect. Arlington is only one of many Texas cities that restrict investor-owned STRs in residential zones. Others include Galveston, Port Aransas, Fort Worth, College Station, Fredericksburg, New Braunfels, Grapevine, Hurst, Southlake and Coppell.
Btw, I’m not sure if you realize this but many of the cities you mentioned including New Orleans, New York City and Los Angeles all have STR ordinances that prohibit non-owner occupied short term rentals in residential areas in order to preserve residential housing stock for locals, prevent residential areas from being overrun by short term rentals and protect residents safety and quality of life.
Austin did not lose, Veazey. You are misrepresenting the facts. Parts of our ordinance were found to be unconstitutional but the part about no longer having non-owner occupied short-term rental in residential zones remains. We are appealing the rest. Worth every penny to protect our neighborhoods from commercialization.
About these great jobs cleaning the STRs…paid $15 per hour? Benefits like insurance and 401k? Seriously doubt it.
And lastly you are missing the point as so many STR operators do. Well-behaved or not, the non-owner occupied short-term rental is a commercial use of the property. It has no place in residential zones. They should absolutely be banned from there. Allow them in mixed use, central business district, commercial areas. Like where the Goldrush Cafe is.
Thanks for your comment. I am a mom and pop operation. You are correct, I only stay in owner-occupied STRs. I only run one owner occupied unit attached to my house. In almost 4 years, no complaints and my next door neighbor, with two children under the age of 4 sent me a message the other day: “I would not want to live next to a party house or a hotel. Your Airbnb though, is a compliment to the neighborhood. You all are so respectful and all your guests have been, too. We hardly notice, other than a different car sharing your driveway, when you have guests and have never been disturbed.” I have lived in the neighborhood off and on since I was 14. I have lived on the east side of the lake most of my life. I would never do Short Term Rental without being on site. My place is about 400 sq. ft., no kitchen. Here is who I rent to: families of neighbors who are in town and want to be near their family, State Fair goers, artists who are vendors at an event at the Arboretum who need to stay close and old high school (Bryan Adams) friends in town for Dallas Blooms, and because we are small, on site, and stress the beauty and quiet of the neighborhood, we get people looking to discover the side of Dallas that those of us who have lived here for 50 plus years enjoy. You make important points. I am trying to keep my house in retirement and would never do anything or allow anything that would disturb my neighborhood. You have no idea the time and effort, our gardens, our small private patio and separate entrance behind a seven foot fence, that create countless reviews from a couple or a small family that all express gratitude for how restful, peaceful and quiet, our place is. If forced out of our house by an ordinance that bans owner occupied, we’ll just rent out the main house and the ADU month to month. Is that really better than having an owner-occupied unit and an occasional STR guest? There has to be a middle ground.
Jeff-
It would be easier to take you and the other STR owners seriously if you would stop lying and misrepresenting the truth. No one ever said it would take 2 to 3 years to enact STR zoning regulations. I listened to the most recent Quality of Life Committee meeting where the various STR regulation options were discussed. They estimated it could take around a year to get a STR zoning ordinance through ZOAC, however when Omar Navarez asked if a STR zoning ordinance HAD to go through ZOAC, the city attorney said no. The city attorney said a STR zoning ordinance could be sent to CPC instead and that could considerably fast track the process.
Bless your heart….as attorney, I am disappointed what a weak and generally personal argument you make. In fact, it’s so weak that I move from neutral to probably support a ban. You provide no data on how these STR benefit a neighborhood or the city. And your suggestion that a long-term tenant yields a poorer owner engagement is simply ridiculous. Your “opinion” which I’m disappointed Candy Evans printed, lacks any useful background information (the ordinance proposed) and only personal or anecdotal data which contributes little to anyone being enlightened on the subject. I hope you were a better lawyer than you are a journalist. Maybe it’s time to simply enjoy retirement.
You are obviously not following the issue closely, so bless your heart right back at you. there is no proposed ordinance. Instead the City announced 8 options, ranging from do nothing to complete ban. A Task Force of people handpicked by the two council members pushing some kind of ordinance, recommended a number of options and there were only 3 votes on the task force for banning STRS (18%), the lowest percentage of any of the two dozen or so options.
Jessica Black – “In Dallas, the city has never granted STR operator’s permission to operate in residential zones, so there is no issue of retroactivity.” Dallas decided not to license but, instead to require registration and TAX. If you don’t think a higher court like the Texas Supreme Court would find that to be a settled interest and therefore, subsequent action, could be a “taking” of a property interest, you may be underestimating Texas long tradition of property rights.
Like Dallas, Arlington collected voluntary HOT tax payments from STR operators who were illegally operating in residential zones and that alone wasn’t enough to invalidate its STR ordinance. Just because something is taxable doesn’t mean it’s legal (for example, drug tax stamps).
Other courts around the country have examined whether ordinances prohibiting STRs amount to a regulatory taking and have found that they do not. https://www.jdsupra.com/legalnews/short-term-rental-law-survives-18031/
Question about these great jobs. Do the cleaners get paid $15 per hour? Do they get 401(k) and health insurance?
What do you think about allowing Amy Davis who lives in Oak Cliff to operate a hotel/event center in the middle of Prospect? It is ruining life for the residents. In the 5900 block of Prospect there are four full time non-owner occupied STRs. One poor homeowner has one on either side. That is completely unreasonable and unfair to give away the residential zoning we all bought into to a special interest group.
I think all party houses should be shut down. Yesterday. I think that was clear from my op-ed. I am not clear why you had a hard time understanding it. Actually, the Dallas Short Term Rental Alliance is working to get these things shut down – doing a lot more than the city of Dallas at this point. If a restaurant fails an inspection do we shut down all restaurants? If street racing is a problem do we ban all cars?
You admit in your own blog that your short-term tenants violate the rules you set forth, including unruly animals and nuisances. You admit this gives you “host fatigue,” yet you want to continue subjecting your quiet neighborhood to STRs for your own financial gain. STRs do NOT belong in single-family neighborhoods. There may be a place for them elsewhere, but why does my right to peaceful enjoyment of my property have to be compromised because you, a retired attorney, allegedly can’t afford your own property taxes? You should have planned better, sir.