The setup
Since local leaders last updated short-term rental, or STR, rules in 2016, the city has faced various licensing and enforcement challenges. A series of lawsuits over policies in Austin and elsewhere have limited city regulations on issues such as occupancy limits and the location of owner- versus nonowner-occupied rentals, effectively allowing STRs anywhere in town.
Additionally, while STRs must be licensed by Austin, city staff believe a vast majority of the thousands of rental spaces operating today are unlicensed. Despite previous reviews and plans for enforcement, unlicensed rentals remain a target for the city due to concerns over nuisances in neighborhoods, lost city tourism revenue and housing affordability.
Austin officials formally requested some changes to STR rules in 2022 and with the passage of "HOME" Phase 1 in late 2023, leading to the draft rule revisions now on the table. The current process also comes after some of Austin's cultural and tourism commissions recommended their own STR policies.
“The goals of this ordinance are to increase our compliance with the licensing requirement, improve the collection of hotel occupancy tax that’s owed to the city, and encourage responsible short-term rental ownership, and bring the short-term rental platforms into the process," Daniel Word, assistant director of the Development Services Department, said in an interview.
What's happening
The new proposals would adjust how STR owners and operators, as well as the various platforms that list rental units, do business in town—but are unlikely to affect anyone looking to rent a short-term space in Austin.
Assistant City Manager Veronica Briseño said the changes would shift local regulations from a system based on zoning and land-use to a "business regulation framework" tied to the owners and platforms. Some of the updates include:
- Requiring platforms to display STR license numbers in online listings to ensure all advertised units are officially registered
- Having platforms delist spaces that don't feature valid licenses at the city's request
- Creating new "density caps" for STR operators by requiring a 1,000-foot buffer between their units, and limiting STR operations on properties with three or less units to individuals rather than business entities
- Making platforms collect Austin's local hotel occupancy tax, or HOT, during rental booking and then submitting those funds to the city to ensure full payments—a process Airbnb already has in place elsewhere in Texas
About 2,220 STRs were licensed in Austin as of Jan. 16. The city has no exact estimate of the number of unlicensed units in town, although staff said in 2022 that number could be close to 10,000. The STR database Inside Airbnb currently reports more than 15,000 total active rental listings across the city.
Of licensed units in the city, most are located around downtown and nearby neighborhoods in East and South Austin.
Word said the spread of unlicensed units is a challenge for city staff, who can have a hard time identifying homes as STRs or getting in touch with owners and operators when there's a problem with compliance.
“[Difficulties with unlicensed units] creates a barrier to us pursuing enforcement against those that are advertising, and there’s currently no obligation from the platforms to police that for us," he said.
Unlicensed units are also likely costing Austin significant funding for tourism promotion and cultural programming. Word said about $7 million in HOT revenue is generated from licensed STRs annually, a total he'd "certainly expect" to see increase under new regulations.
Offering input
Representatives with some major STR platforms said they're continuing to look over the new city proposals this winter.
“We are reviewing the proposed changes and look forward to working with the city of Austin to develop fair, balanced short-term rental rules. We have long advocated for platforms to collect and remit local tourism taxes on behalf of hosts in Austin and support all efforts that respect the rights of Austin residents to earn extra money by sharing their home," Airbnb Senior Policy Manager Luis Briones said in a statement.
A spokesperson with Vrbo parent company Expedia Group said the platform supports "balanced short-term rental laws."
"We are proud to be part of the Austin community and appreciate the progress the city of Austin is making to balance community needs, including a diverse and healthy tourism economy," they said.
The city hasn't gotten specific feedback from any platforms since the draft rules were released, Word said, although he expects they'll be involved before any changes are made.
"They are certainly part of the process, and their input and participation will certainly be valuable going forward," he said.
Get involved
Austinites are invited to learn more and weigh in on the new rules before they're finalized.
The city will first host several informational sessions about the revisions in late January. Registration is available online for the events:
- Jan. 21, 11 a.m.-1 p.m. via Zoom
- Jan. 22, 6-8 p.m. at the Montopolis Recreation and Community Center, 1200 Montopolis Drive, Austin
- Jan. 23, 6-8 p.m. at the Permitting and Development Center, 6310 Wilhelmina Delco Drive, Austin
- Jan. 27, 6-8 p.m. at the Austin Central Library, 710 W. Cesar Chavez St., Austin
- Feb. 4: Joint Planning Commission and City Council meeting
- Feb. 11: Planning Commission meeting
- Feb. 27: City Council meeting
