Editor's note: This story has been updated to clarify that Lakeway's updated short term rental ordinance was passed in February 2024, rather than 2023, as was previously stated by City Manager Joseph Molis.

The Lake Travis region has long been known as a vacation destination, but with the creation of homestay apps, such as Airbnb and Vrbo, short-term rentals have come under increasing scrutiny by local governments.

Texas does not issue state-level permits for STRs. Instead, they are regulated at the city or county level, and policies vary widely.

The breakdown

Bee Cave
  • STR definition: No definition exists in the city’s code.
  • Policy: No policy exists in the city’s code.
  • Violations: No violation exists in the city’s code.
  • Latest update: According to a city spokesperson, no updates to the city’s code regarding STRs are planned.
  • STR definition: the rental, tenancy or similar nonowner occupancy of residential property, by any form of compensation, for a period of one to 27 consecutive days
  • Policy: The city code of ordinances provides only 25 STR permits to single-family residential properties over 1,000 feet from each other and an unlimited number of condo permits. The code stipulates a two-night minimum stay for STRs and orders permitted properties to comply with city noise, trash and parking regulations.
  • Violations: Code violations can be reported to nonemergency police at night and code compliance during the day.
  • Latest update: Previously, the approval process for an STR involved City Council, and the zoning and planning commission. However, in February, the existing ordinance was adopted to better track the approval process, Lakeway city officials said.
  • STR definition: the rental of any (residential) property for a period of less than 30 days
  • Policy: The city’s code of ordinances states STRs are prohibited and considered unlawful.
  • Violation: A violation of this article is a misdemeanor punishable by a criminal penalty of up to $2,000 per day. Residents can report suspected code violations to the city administrator.
  • Latest update: The city first approved its STR policy in 2010 and adopted updates to the violations portion of the ordinance in August 2019.
West Lake Hills
  • STR definition: renting or leasing a dwelling or a portion of a dwelling owned by a resident of the city to a guest for a period of 30 consecutive days or less
  • Policy: The city’s code of ordinances outlines criteria that short-term rentals must meet to be approved for a permit by the city administrator. The city is required to notify other property owners within 300 feet of a permitted property. The criteria for STRs includes, but is not limited to the following:
    • Guesthouses cannot be used as STRs.
    • Trailers and RVs cannot be used as STRs.
    • The minimum rental period for an STR is two consecutive nights.
    • STRs cannot pose a traffic hazard or noise nuisance, or impede the development of a neighboring property.
  • Violation: The code also outlines a complaint procedure for STRs. A property that receives three complaints in a one-year period will have its permit revoked. Building and Development Services Director Jennifer Bills said written complaints can be directed to the city administrator.
  • Latest update: Previously, the approval process for an STR involved City Council, and the zoning and planning commission. Now, since the new ordinance was adopted in December 2021, the process goes through the city administrator.
What else?

Austin was among the first cities in the state to introduce regulations for STRs in 2012, but a federal court case in August rendered the city’s ordinance unconstitutional.

Additionally, in recent years, state lawmakers have looked to further restrict a city’s ability to prohibit STRs, but no such laws have passed.

“We're doing what we can to not be the [legal] precedent that other cities look at when they're creating their code,” Molis said of Lakeway. “We have to walk that tightrope of preserving Lakeway’s culture, which was founded on vacationing, and protecting our residents.”

City staff for Lakeway and West Lake Hills said they have not observed a large issue of unpermitted STRs.

Residents within unincorporated areas of Travis County are still required to file state hotel occupancy tax reports, according to Texas law.