A Closer Look at How Other Texas Cities Deal With Short-Term Rentals

Dallas has been wrestling with the issue of whether to change the code allowing short-term rentals in residential areas, but it’s not the only city that’s had to evaluate the matter.

When Airbnb announced in June that party houses and “open-invite gatherings” of more than 16 people are permanently prohibited following a trial period due to the COVID-19 pandemic, many local STR owners breathed a sigh of relief, figuring that the problem was solved. After all, the primary complaint about STRs in neighborhoods is that they create noise, and nuisances, and attract criminal activity  — although proponents say such gripes are rare. 

But opponents of STRs in neighborhoods haven’t changed their minds, maintaining that the Airbnbs and Vrbo homes should be zoned out of residential areas and confined to places where hotels are permitted. 

Dallas’s Zoning Ordinance Advisory Committee meets at 9 a.m. Tuesday for more discussion on the city’s development code, and will consider amending the section related to “lodging uses” and define a new use called “short-term rental lodging.” 

Party Cities

Austin has been at the forefront of the STR issue and court cases since the early 2010s, according to TX Neighborhood Coalition, a group that advocates for restricting STRs in residential neighborhoods. While pre-existing Type 2 STRs (whole home, owner absent) are allowed, the city has successfully maintained a moratorium on new Type 2 STRs in residential areas. 

Austin has about 17,000 STRs, while Dallas has about 6,000. In both cities, more than 80 percent of the STRs are “whole home” rather than a private room. 

That policy of grandfathering in the existing neighborhood STRs but not allowing new ones to be licensed appears to be working, says David Tyler, a Realtor with Austin’s Vista Real Estate. 

“From what I know and what I’ve seen, yes, that’s working,” Tyler said. “There are people that don’t like STRs in their neighborhoods, but what we’ve seen is that people tend to take better care of a property when they stay in it for more than one night.”

Summer and fall music festival season is heating up with events from Miami to San Francisco. Downtown Austin “becomes” South by Southwest in March, and has traditionally welcomed groups of friends from across the country to stay in town for the nine-day gathering. And the two-weekend Austin City Limits festival kicks off on October 7 this year.

“Play by the rules,” cautions a video produced by the Austin Code Department. “Renters, respect the neighbors by keeping noise levels down and by knowing and following the rules of the property and the neighborhood.” 

For such occasions, it’s cheaper to rent an Airbnb house than stay in a hotel, and the occupants can take turns shopping for groceries and planning meals for the group. But what does that mean for neighbors who have to deal with late-night noise and criminal activity?

The answer, according to proponents of STRs in neighborhoods, is to report bad behavior and rest easy in knowing it’s not tolerated by the city, the hosting property owner, or the Airbnb platform. In short, a loud party could happen once — as it could on a weeknight at an owner-occupied home — but it won’t likely happen again once it’s reported. 

Or it may not even happen in the first place. More than 1,600 potential partiers in Austin were deterred from renting an Airbnb last July 4 because of the party ban, the platform reported. 

Beni Aguirre, a Realtor with Austin-based The Listing Firm, said it’s understood that there’s going to be more activity in the city during festivals, conventions, and home football game weekends. 

“My clients rent out smaller condos and they have not had a problem,” Aguirre said. “It’s kind of similar to the rental market where the [longtime homeowners] don’t want to be surrounded by renters.” 

In Austin, however, homeowners know what they’re getting into when they choose to live in a particular location, Aguirre added. 

“In our local community, when it’s time for ACL, South by [Southwest], or a UT football game, unless that’s something you actively want to participate in, you just stay away from those areas,” Aguirre said. “Those who live there complain about events and noise, as the economy in Austin is blowing up. If that’s the area you’re going to live in, you know that’s what happens. If you live near the ocean, you have to expect saltwater might damage your home.” 

Plenty of non-residential STRs are available in the Austin area, such as a $455-per-night treehouse on Lake Travis. 

It’s the responsibility of the STR owner to know the local government code, provide clear rules to the renter, and take action when those rules aren’t followed, said Andrew King, director of public relations with Bastion Elevate marketing agency. 

“Property owners and managers, now more than ever, are needing to balance the evolving rules and regulations that not only come from the platforms they use but from the local and state governments they operate within,” he said. 

The Austin City Council has had more discussion lately on the matter of hotel occupancy tax collected by STRs than neighborhood nuisances. Other issues such as STRs affecting a city’s affordable housing shortage, also have been raised, but advocates for the rental sites say that’s a red herring.

“Short-term rentals, hosted by companies like Airbnb, have divided many neighborhood residents throughout Austin,” according to a 2019 Austin American-Statesman article. “Some have complained that homes hosting tourists or visitors for one-off events like bachelor parties are a nuisance and change the character of neighborhoods. But other homeowners say they have the right to rent out their own private property.”

Sound familiar, Dallas? 

To Zone or Not to Zone

Zoning can be an effective tool in minimizing party houses, but eliminating STRs in residential neighborhoods doesn’t solve problems of code enforcement or criminal activity, according to Nolo online legal encyclopedia. Nolo suggests first having an informal conversation with the property owner to see if noise and nuisance issues can be abated. 

Many STR owners have told the Dallas City Council they impose their own rules for their properties above and beyond what’s required by Airbnb, including curfews and limiting the number of people who can stay overnight in a home. If Airbnb’s party ban is violated, the homeowner can be fined and removed from the platform.  

Houston doesn’t have zoning, and city codes don’t govern land use but do address how property can be subdivided. Bryan, the town-and-gown community adjacent to College Station’s Texas A&M University, has had Residential Neighborhood Conservation Districts since the early 2000s, where no more than two unrelated adults can live together in a home. Residents within the neighborhood can petition for the R-NC zoning, which officials say is difficult to enforce, but minimizes party houses of several unrelated college students living together in a neighborhood. 

A homeowners’ association also can use restrictive covenants to govern STRs in their neighborhood, but that won’t supersede a city code, Tyler said. 

“There are laws that prohibit sub-authorities from restricting land use past a certain level, and HOAs are not the governing bodies of the real property in the end,” he said. 

Fort Worth bans STRs in residential areas, and Southlake doesn’t allow them at all within the city limits. College Station allows them but they must be owner-occupied in certain areas. 

Check CandysDirt.com for coverage of Tuesday’s Dallas Zoning Ordinance Advisory Committee meeting.