City of Dallas Studies Home Rental Regulations

Published March 20, 2020

The Dallas City Council directed city staff to form a task force to explore options to regulate short-term rentals from sites like Airbnb or Vrbo, on February 18.

The action comes after an appeals court in Texas struck down parts of Austin’s restrictions on short-term rentals within the city, calling them unconstitutional. The regulations, aimed at companies like Airbnb, banned so-called “Phase II Short-Term Rentals,” in which the rented property is not occupied by the owner. Other parts of the ordinance limited the number of guests per room and banned “assemblies,” like parties or weddings, on rental property.

The City of Austin requested an extension of time to file a motion for reconsideration of the Third Court of Appeals opinion, which could eventually end up before the Texas Supreme Court.

Targets Property Owners’ Rights

Property owners have always had a right to rent their homes, says Robert Hennecke, the General Counsel and Director of the Center for the American Future at the Texas Public Policy Foundation.

“The target [of Austin’s ordinance] is on private property owners’ right to lease their homes, which has been a common practice for many decades,” Hennecke said. “This practice has become more prevalent since websites like Airbnb and Vrbo made it easier for owners and guests to connect via the email. This continues the trend by cities of seeking to regulate the sharing economy without any meaningful evidence or data to justify the increased regulatory focus.”

By striking down parts of the ordinance, the Third Court held that property rights are fundamental, says Hennecke, and the right to lease is inherent to those property rights.

Creating a Nuisance?

Members of the Dallas City Council heard complaints from some property owners about short-term rentals. “We don’t have a neighborhood anymore,” Emil Lippe stated, The Dallas Morning News reported on February 19. “People think, ‘Oh Airbnb is cool.’ It’s OK if it’s next to your house, not next to me,” Lippe stated.

Simply leasing one’s property doesn’t create a common-law nuisance, says Hennecke. “The act of leasing your property—whether it be for three days or three months—does not inherently present a nuisance,” Hennecke said. “Cities should focus their attention on actual instances of public disturbances, not by seeking to infringe upon private property rights.”

Airbnb has had great benefits for consumers, who often find cheaper and more comfortable accommodations through the service than they do at hotels, says Hennecke. Government should have no say in “where people sleep” while visiting a city, says Hennecke.

“The practice of vacation rentals has proven able to provide a benefit to persons seeking a short-term stay long prior to city attempts at regulation,” Hennecke said. “It should not be the purview of government to regulate where people sleep or what legal activities they conduct within a private residential setting.”

The Dallas taskforce report is expected this summer. No hearing date had been set on Austin’s case as of press time.

Ashley Herzog ([email protected]) writes from Avon Lake, Ohio.