Richardson City Council is considering implementing restrictions on the use of short-term rentals in the city.

A short-term rental is defined as a residential property that is rented wholly or partly for a fee for a period not longer than 30 consecutive days, according to city officails. Richardson is not allowed to prohibit short-term rentals, but can regulate them under local regulations.

Council discussed potential guidelines for short-term rentals during its May 16 meeting. No decision was made during the meeting, but city staff is expected to bring an ordinance back for consideration by council before the end of the fiscal year.

Under the proposed regulation, property owners would be asked to register their properties with the city in person or on a website dedicated to short-term rentals.

The application for registration would require a list of all owners, operators and agents with their addresses, e-mail addresses and current phone numbers.

In addition, the city would require the name of a 24-hour contact, a depiction of the floor plan with the locations of all fire extinguishers and smoke detectors, and a sworn statement that the owner has met all items required in the ordinance.

A non-refundable registration fee will also be required with the short term rental registration application. Rental operators would be responsible for paying the fee on an annual basis at the beginning of the calendar year. Failure to pay the fee could result in the issuance of citations or the right to operate a short-term rental being revoked.

In addition, Richardson officials said they are looking at requiring hotel occupancy tax rates to be paid by short-term rentals upon request from the city. Officials said the hotel occupancy tax should be required since the function of the rentals is the same as a hotel and motel.

The hotel occupancy tax is a state mandatory tax applied to guests who rent a hotel room that costs $15 or more each day, according to the Texas Comptroller website. The state hotel occupancy tax rate is currently 6% of the cost of a room, while the city charges a 7% rate. Rental owners must pay and report hotel occupancy taxes within 30 days of receiving a notice, according to city officials.

If the guidelines for short-term rentals are approved, registration will be revoked for repeated violations of any part of the proposed ordinance. If approved, Community Services Administrator Lindsay Turman said short term rentals would likely be required to register in October, with the first registration fee to be assessed in January 2023.

City Manager Don Magner said, if the regulations are approved, the city would develop a comprehensive communications plan to raise awareness about the rental regulations in advance of its implementation.