New Austin, Texas Zoning Regulations Target Airbnb, Property Rights

Published April 11, 2016

Austin city lawmakers approved new zoning regulations targeting companies such as Airbnb, a peer-to-peer economy company connecting tourists seeking short-term housing and hosts who provide places to stay.

The Austin City Council voted in February to enact new regulations on short-term rental (STR) housing in the city, phasing in the new restrictions over the next six years.

The new ordinance targets peer-to-peer economy businesses such as Airbnb and HomeAway, a similar company headquartered in Austin. The law, which took effect in March, bans “type-2 rentals,” short-term rentals in which a homeowner is not present, by restricting the number of adults allowed to reside in a given property.

Small Problem, Big Regulations

Austin City Councilwoman Ellen Troxclair says the ordinance was driven by economic ignorance.

“There was a perception among STR opponents that houses used as short-term rentals were taking away housing options for Austin residents, when in reality short-term rentals represent a tiny fraction of available housing,” Troxclair said.

Troxclair says fears of abusive tourists invading neighborhoods do not reflect actual experiences with peer-to-peer economy lodging businesses.

“Our neighbors who own and operate STRs here in Austin are largely lawful, considerate, and responsive citizens who use their short-term rental income to afford to continue living in Austin,” Troxclair said. “A blanket ban on short-term rentals punishes the vast majority of responsible owners by destroying their ability to earn this income and infringes upon their property rights.”

Existing Problems ‘Magnified’

Troxclair says the new ordinance will make things worse for Austin residents, instead of improving quality of life in the city.

“The existing issues will be magnified, and more time and money will have to be spent on enforcement of an unrealistic and potentially unlawful ban,” Troxclair said.

‘Carpet-Bombing the Problem’

Allegra Hill, an analyst at the Texas Public Policy Foundation’s Center for Local Governance, says the new ordinance piles new regulations on top of existing ones.

“The new ordinance is just carpet-bombing the problem instead of actually fixing it,” Hill said. “There is a lot of different occupancy restrictions that are overlapping. You cannot have an outdoor assembly of more than six people between the hours of 7 am and 10 pm, even if there are more than six people legally using the house, because you can have [only] six unrelated people or 10 related people or two per bedroom plus two adults, whatever is less.”

Legal Ambiguity, Overreach

Hill says the new ordinance, which also bans homeowners from holding an “assembly” between 10 pm and 6 am, is ambiguous and could have unintended consequences for Austin residents and visitors alike.

“Any two adults speaking with one another [or] having their own ‘party’ would be considered an ‘assembly’ under this definition, and you’re not allowed to have those at all starting at 10 pm,” said Hill. “Even if you wanted to stay up late and watch a movie or wake up early on Christmas morning to open gifts with your family, it seems like [those activities] would be excluded under this definition, and this applies to all short-term rentals.”

Luke Karnick ([email protected]) writes from Indianapolis, Indiana.