What’s Next for Short-Term Rental Operators in Dallas And Their Neighbors?
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Now that the City Plan Commission has voted to define short-term rentals as a lodging use, what exactly does that mean for the future of these properties?
At first glance, it means simply that the CPC, a recommending body appointed by the 14 Dallas City Council members, agreed to define short-term rentals, such as Airbnbs, in the same category as hotels, meaning they would have to go in areas that are designated for such use.
It also means they could not continue to operate in residential neighborhoods.
Upon further inspection, however, there are a few more issues at play. One is that the Dallas City Council hasn’t even placed the item on an agenda and isn’t likely to in the immediate future.
The majority of the sitting council members, along with Mayor Eric Johnson, are seeking re-election in May. STRs are a political hot potato that no one wants to touch until after the election, city officials have said.
Will The City Take Action Against STRs?
Once council action is taken, if it results in removing STRs from neighborhoods, it’s been suggested that those who operate an STR will “go underground,” and try to stay off the radar. That could work for those who live on-site or closely monitor the activity of their renters. It’s been said that one could live down the street from a properly-functioning short-term rental and not even know it.
Those who are operating party houses and dens of illegal activity can be sure if restrictions are approved by the Dallas City Council, they’ll be promptly reported and could be fined or taken to municipal court.
But, again, there’s no immediate consequence for current STR operators and no immediate relief for those who live near them.
Here’s what residents on both sides of the issue have to say.
Neighbor Feedback on Short-Term Rentals
Many residents reached out to CandysDirt.com and told us the rental properties shouldn’t have been operating in residential neighborhoods in the first place, according to city code.
District 14 resident Olive Talley said during the Dec. 8 CPC meeting that the matter has become about investor profits versus the sanctity of people’s homes and a sense of community and safety that comes from knowing one’s neighbors.
“STRs are commercial lodging businesses, period,” she said. “They unravel the fabric of neighborhoods. They worsen our housing shortage and the commercialization of homes across Dallas. As full-time residents and property owners, we stand together to ask that you uphold existing zoning by defining STRs as a lodging use that’s already illegal in residential zoning.”
A District 13 resident said she was assaulted and robbed by a party bus driver outside an STR in her neighborhood. Other residents said they’d been approached by drug dealers and saw evidence of prostitution and human trafficking at STRs in residential areas.
“You can save this city,” a District 3 resident told the CPC. “Please pull us back from the gates of hell.”
Are Short-Term Rental Owners Being Good Neighbors?
But they are operating in residential neighborhoods. At least 2,628 STRs are active in the City of Dallas, according to city data. Some say there are as many as 6,000.
Additional data showed more than 88 percent of Dallas STRs generated zero 911 or 311 calls this year. The data is not particularly useful, however, because by the time a code enforcement officer or police officer arrives to address a nuisance, it’s too late, thus deterring neighbors from calling at all.
“When I hear all these horror stories about party houses, to me, it is not a zoning issue, it is a regulation issue to shut them down,” said Plan Commissioner Brandy Treadway, one of four who voted against the lodging use definition. “How do you shut down a party house? You have really good resources. The better the regulatory regime you have, the more resources you have to cut down the bad actors.”
Grady McGahan, a member of the city’s Arts and Culture Advisory Commission, said he’s able to afford his home in District 5 because of the income generated through his STR.
“I know my neighbors,” he said. “I bring cookies when they move in. A solution to which we work together to solve issues is the only path. Multiple task forces have recommended regulation without zoning. Don’t throw the good out with the bad. A war on all STRs won’t work. The only solution is one that creates additional city police and resources, and makes partners of us all.”
What’s Next For Short-Term Rentals in Dallas?
Director of Housing and Neighborhood Revitalization David Noguera said short-term rentals provide much-needed affordable housing.
“You have many people who come to a city for a short-term basis, whether it be a traveling nurse or one of my colleagues who is shopping for housing or taking on a short-term job,” he said. “If you look at their options, they can either sign a one-year lease or they can take on a hotel, which is very expensive. Short-term rentals provide that interim balance at a much more affordable level.”
They’re not typically market-rate apartments; they’re homes that have been rehabilitated and are owned by investors or rooms that homeowners are renting to supplement their income, Noguera said, adding that he can’t point to any particular city that has figured out an appropriate balance.
“If you just ban them, you force the industry to go underground,” he said.
It’s difficult to determine the impact STRs have on the housing market, Noguera added.
“If you look at the overall numbers, it’s easy to say from a percentage perspective, those numbers are very small,” he said. “But then you have to hone in on where those short-term rentals are. It’s possible that they could be concentrated in certain neighborhoods and non-existent in other neighborhoods. One of the things I see as being very valuable with short-term rentals is being able to assess fees for allowing them to exist, so you can track them and understand the patterns that are forming. To a large extent, we’re operating in the dark.”
Numerous residents encouraged the CPC in the Dec. 8 meeting to take a vote so the matter could move forward to the Dallas City Council.
The CPC did move forward with a vote, and the city council has many options on what to do with that recommendation.
District 14 Councilman Paul Ridley has been vocal in his support of the “Keep It Simple Solution,” which is what the CPC approved on Dec. 8. Other council members have expressed interest in allowing STRs in neighborhoods with heightened regulations. If the vote takes place after the May election, District 10 Councilman Adam McGough and District 3 Councilman Casey Thomas will be out due to term limits. The filing deadline is Feb. 17, so it’s not clear yet who’s running, but several have announced their intent.
Because the city is facing a housing shortage, some elected officials have appeared reticent to take homes off the market that could be used for long-term residents. However, there are options such as special use permits, accessory dwelling units, and STR availability in planned developments.
Residents on both sides of the issue encouraged appointed and elected officials to engage residents and reach a compromise.
“It shouldn’t be about winning or scoring political points,” McGahan said. “It should be about solving the problems. I don’t know where we got away from that three years into this process.”
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I invested in house near Bishop Arts that I rent out on airbnb. It’s my pride and joy. I would never tolerate a party house. It was a knock down and instead I had the foundation repaired so it gets a second life.
The next door neighbor loves it, he actually meets everyone. (I went to stay in it and he came out and met me at my car, and proceeded to tell me about all the other renters he met.) On the other hand, the people two doors down have an anti-airbnb sign in their yard so I guess they hate it.
I thought it would just be people wanting to get away to Bishop Arts (my middle-age mother is the target audience I had in mind). But I actually get a lot of people going to the medical center there who say having a house made things much less stressful.
I think the partyhouse thing is completely made up by nasty neighbors. Everyone has an iPhone in their pocket and if there were parties going on we’d see videos (from neighbors and/or participants). I grew up in a small town and know these sort of “bless your heart” sanctimonious self-appointed neighborhood guardians. Just sad to me that Dallas isn’t better than this.
It will be a financial setback if airbnbs are banned. I’ve tried to rent it as a long term rental on Zillow and no takers. Meanwhile it’s usually rented on airbnb. But I’ll be fine and move on to bigger and better things.
If Dallas City Council is worried about STRs going underground, the best thing for them to do is to enact STR regulations that include platform accountability provisions that allow the city to fine STR platforms like Airbnb & Vrbo for collecting fees from listings that don’t have STR permits from the city. Denver added platform accountability to its STR ordinance in 2020 & now has a compliance rate of over 90%, one of the highest in the country. It’s amazing how the STR platforms can suddenly follow the rules & police their listings when they know they’ll get hit in the pocketbook if they don’t. https://dpo.st/3HbCAAp
I personally don’t operate any Air BNB’s, but I love them. I always stay in them when I travel so I get to experience the city I’m in. Plus they tend to be cheaper than hotels. I’d much rather my money go to a small mom-pop than a large corporation.
Tyrell Johnson, You might want to do a little more research into who is actually operating Airbnbs these days. Over 84% of the almost 6000 Airbnbs in Dallas are entire homes/ apartments. Over 66% of hosts have MULTIPLE listings in Dallas. A good number have more than 20. More than 1/2 of Airbnb hosts with listings in Dallas live somewhere other than Dallas.
http://insideairbnb.com/dallas/
Airbnb may have started out as mom & pops renting a spare room for extra money, but they are now a SMALL minority. The STR industry has been commercialized by big corporations & absentee investors.
“Investors Chasing Housing Target Massive Pools of Airbnbs”
https://www.bloomberg.com/news/articles/2021-06-25/investors-chasing-housing-target-massive-pools-of-airbnb-rentals
“That Vacation Homes Listed on Airbnb Might Be Owned by Wall Street”
https://www.wsj.com/articles/that-vacation-home-listed-on-airbnb-might-be-owned-by-wall-street-11644930000
Wow! Neighbors who have tried to take pictures & videos of issues at STRs have been assaulted. Others who have filed legitimate complaints with the city & Airbnb have been threatened with lawsuits by greedy, selfish STR owners who don’t care about the impact their UNSTAFFED LODGING BUSINESS is having on residential neighbors. Others have been afraid to take pictures or videos because they can see the guests at the STR who they don’t know from Adam & who Airbnb can’t guarantee they’ve checked ID or run a background on are armed. You have some gall to accuse these neighbors who are being intimidated & threatened & no longer feel safe in their own homes of lying.
I am a DFW local and have begun investing in real estate with my sibling the past several years. Having all long term rentals was not cutting it to help us pay for our mothers nursing home, so we diversified into some STRs. It has been great being able to host people who are visiting to move here or coming to work, or coming to adopt a baby. I have a day job but I’ve loved being an ambassador to DFW.
Being able to stay in an Air bnb short term or a couple nights gives me the privacy and accommodations I want. Forcing STRs to operate outside of residential neighborhoods is basically asking them not to exist. Because I don’t think I’d be comfortable in a factory or warehouse area, as a host or a guest. Upset neighbors should join the “party” instead potentially damaging someone’s livelihood.
Hi Georgia, what has your experience been with short-term rentals? I have a family of 5 plus a dog. When we travel, STRs make the most sense for us and are FAR SUPERIOR to a hotel.
From an investor perspective, the STR model is preferable in large part because the property is better maintained than it would be as a long-term rental. Do you also take issue with long-term renters? Are you against property owners who buy vacation homes?
Airbnb verifies ID and runs a background check. In addition to that, they have implemented other guest screening protocols to mitigate parties and unsavory activity. Also, any quality STR operator has their own systems for screening guests: security cameras, noise monitoring software, ID verification, rental agreement, etc.
To your point about Airbnb not being able to check if guests are “armed.” I assume you mean they cannot check for a weapon? Do you know who of your neighbors is armed? Probably not. Hotels do not check if guests are armed either, just FYI.
Most of the profiles you see on Airbnb with multiple listings are management companies. They are providing oversight for the mom and pop who own the property but so who may not have time to run the day-to-day. Are you against people who invest in real estate in order to build wealth for themselves and their family? And larger corporations with multiples listings typically acquire apartments in large buildings to house business travels and traveling health care workers.
All this to say, STRs are not the problem. Every industry has some bad actors. The city is taking steps to address those bad actors, and will hopefully use common sense in creating and implementing regulations.
My rental was purchased so that I could spend time in Dallas with grandchildren. Dallas is a very expensive place to live so I rent my property out when I am not there. I pay my HOT taxes to Dallas. I have built relationships on my block. I have invested thousands of dollars on the property to make it attractive to guests. I have welcomed opera stars, new grandparents, visitors for weddings, graduations, funerals, etc. I have hosted families waiting for a new house to be finished. I have hosted remote workers interested in moving to Dallas. I have a cleaner, a handyman, a helpful neighbor, and my grown children’s assistance when needed. I visit every month to make sure things are working well. When the time comes I will move into the property full-time. I truly believe that my rental is an asset to the city of Dallas.
All of my STR’s were at one time LTR’s. Due to the cost to maintain these historic homes, I had no choice but to switch them to STR’s. Also, with the protections that are lost to tenant rights, having STR’s ensures that no bad characters stay for too long.
I have never been assualted or berathed by a guest. I wonder what these people were doing to get attacked?
Noise, trash, and parking issues are not specific to STRs, and neither are disruptive parties or rude people. In my neighborhood in SE Dallas, the worst offenders on my block own their home. Every weekend, they pump music outdoors late into the night, shoot guns, and drunkenly speed up and down my street. Code enforcement and DPD don’t do anything, despite my numerous complaints, but you don’t see me trying to ban all parties in Dallas.
Simply put, a zoning ban won’t work. The only path forward is one in which the good STR operators pay to create additional resources that police the system, creating code officers who respond at night for example. It’s myopic to think that a residential ban will make STRs go away. Making all drugs illegal didn’t stop that industry either! What will happen is that bad operators, whose listins will not be taken down by the platforms, will continue, those with the most properties and the most resources (the major investment firms) will make the occasional violation fee a part of their top-line business expense, and the smaller, good operators will spend their resources helping launch lawsuits against the city rather than joining with concerned neighbors to police the STR system. Don’t believe that? Try to find a residential listing on Airbnb in Fort Worth that’s available next month. Again, the only path forward is together, which is where were started years ago when everyone was working together. A lot of the issues that became unbearable in a few select neighborhoods during COVID don’t exist anymore, as events now are banned by Airbnb, groups are headed back to bars and event venues, and the problem properties that initiated these complaints have been kicked off the platforms.
There is no going back. STRs are here to stay. They provide a ton of cultural benefits to the city, hosts, and guests, as well as financial benefits to individuals and neighborhoods. A diverse set of good people in unique situations depend on using their property, or part thereof, as an STR. Regulation is the only intelligent path forward.
zone them out. they do not belong in neighborhoods. the people that post about how good their STR is have never had to live next to one like the “ultimate texas residence” located at 8334 Banquo dr. I lived next to this terror for 2 years and can without a doubt speak from experience to the degradation that STRs such as this are causing to the community. Mr. Arrant could care less, he is profiting by charging $900 a night. He is one of those people who isn’t even involved in his properties.
You good apples out there need to go after the bad apples in your community of STR owners.
I certainly am and I will not stop until the KISS solution is in place.
Expect me.