East Dallas short-term rental operators sue city over new regulations

In June, City Council voted 12-3 to approve new rules that restrict where short-term rentals can operate in the city and require property owners to apply to register their homes to rent. The rules effectively ban most short-term rentals from most parts of the city by making them illegal to operate in single-family neighborhoods.

Under the new regulations, short-term rentals, such as those listed on Airbnb or Vrbo, will still be allowed in areas that are zoned for multifamily use, but each unit must include at least one off-street parking space. Short-term rental operators will be required to annually register their property with the city; pay related fees and taxes, including a $248 registration fee; and follow occupancy and noise limits, among other rules.

Before the new rules were passed, code compliance officials said they lacked the staff and resources to enforce the new rules, which are expected to go into effect Dec. 14 unless a judge halts the change while the lawsuit proceeds. In late September, City Council allocated $1.4 million in its fiscal year 2023-24 budget to create a short-term rental registration program and inspection team.

Representatives from the code compliance department declined to comment on regulation enforcement, due to the pending litigation.

Council member Paul Ridley, who represents Uptown and parts of east Dallas, said “the lawsuit changes nothing” about his stance on regulating short-term rentals, adding that City Council expected to face litigation after their vote. Ridley has been a staunch advocate of strict short-term rental regulation, and his district is one of the most densely populated with the rental properties, according to council documents.

“I stand by my earlier position steadfastly in supporting the city’s efforts to prepare for enforcement starting on Dec. 14,” he said.

Council members Paula Blackmon and Kathy Stewart—who represent Lakewood and Lake Highlands, respectively—did not respond to requests for comment. Blackmon voted in favor of the regulations, but Stewart was not yet in office when the vote was cast.

A date for the case’s court hearing had not been set by time of publication.

The backstory

Since at least 2020, many Dallas property owners—including members of the Dallas Neighborhood Coalition, an organization formed to “fight the proliferation of short-term rentals”—have called for stricter regulations on how short-term rentals are allowed to operate in the city. Many neighborhood residents have complained about noise, trash, crime and traffic being linked to properties that operate as short-term rentals.

While many residents favored an outright ban on short-term rentals, operators asked for greater oversight from the city instead of a zoning change to ensure that “only the bad apples” of short-term rental owners wouldn’t be allowed to continue operating.

Ridley said pursuing a zoning ordinance was “the only way” to make short-term rental regulation enforceable. He said the city would have needed “an army” of code compliance officers to patrol the city’s neighborhoods and monitor noise, litter and crime complaints relating to short-term rentals if they were to remain in single-family neighborhoods.

Some of the new rules include:

• No short-term rentals allowed in single-family neighborhoods
• One off-street parking space per unit
• Respond to noise complaints within two hours
• Annual registration application

Tim Sigler, a member of the Dallas Neighborhood Coalition who lives in Lakewood, said short-term rentals have disrupted his family’s life since one started operating across the street from his home in 2020. He, his husband and their children have been forced to put up with noise and trash from rowdy parties, and often can’t play in their front yard because of “inappropriate” behavior from short-term renters.

Sigler said the rental property robs him and his husband of the quiet, community-driven neighborhood they signed up for when they moved to Lakewood. They don’t want to live in a neighborhood with “random people coming and going” like in a bar and entertainment-driven area like Uptown, he said.

“Having these strangers come in and out of the neighborhood every day, whether or not they’re throwing parties, is just disruptive,” Sigler said.

On the other hand, Patrick Block, a member of the Dallas Short-Term Rental Alliance, has rented out a bedroom in his Junius Heights home since 2015. The decision to do so was essential, he said, to help pay for assisted living for his mother, who recently died, and for renovations to his home. The house, which was built in 1917, was “literally falling apart,” but he didn’t want to sell the home he grew up in with his single mother, he said.

The impending ban on a large source of his income will make it hard to pay off the debt incurred from those expenses, he said.

“Unfortunately with this ban, I can’t rent that room out anymore,” Block said.

The estimated count of short-term rentals in Dallas is

• 1,800 registered short-term rentals
• 1,300 unregistered short-term rentals
• 48 existing short-term rentals legal under new rules

Until enforcement starts in December, short-term rental operators and opponents alike are waiting hopefully.

Opponents like Sigler are “eagerly” looking forward to not having to see or interact with the short-term rentals in their neighborhoods. And operators like Block and Veazey are hoping that their lawsuit halts the regulations and that they’re able to continue renting out their homes as they see fit.

Both sides feel confident in their position.

Members of the Dallas Short-Term Rental Alliance feel that a judge will side with them on the basis of property rights. Property owners should be able to manage their property as they see fit, they say.

“As long as what I’m doing doesn’t intrude on my neighbors’ quiet, peace and enjoyment of their property, I should be free to do pretty much whatever I want to do [on my property] as long as it’s not against the law or dangerous to anyone,” Jeff Veazey said.

East Dallas resident Olive Talley, a member of the Dallas Neighborhood Coalition who has helped lead the charge against short-term rentals, said in an email that the city’s process was “fair and thorough,” and she expects the ordinance to be upheld in court.

“We have high hopes that neighborhoods can be reclaimed for residential—not commercial—uses,” Talley said. “This always has been and continues to be a land use issue.”