The state of Texas is calling on a district court of appeals to take up a lawsuit against the city of Austin’s short-term rental ordinance. 

An earlier trial court sided with the city.

The ordinance regulates what properties can be used for short-term rentals, attempting to protect neighborhoods from large profit-driven investment properties. Owners for new STRs must live somewhere on the property with the ordinance in effect. 

Texas Attorney General Ken Paxton and the conservative think tank Texas Public Policy Foundation teamed up to saying Austin is violating the state constitution. 

By limiting the number of people who can be outside and requiring a curfew just makes what’s bad worse, they say.

“City governments do not have the authority to trample Texas constitutional rights and protections for property owners and their guests,” said Paxton. “The city of Austin’s short-term rental ordinance is not only bad policy, but also unlawful and must be struck down.”

“This court has long protected the notion that a person’s home is their castle, whether they be an owner, tenant, or guest,” said Robert Henneke from the Texas Public Policy Foundation. “None of the appellants have ever had a complaint made against them related to their short-term rental, nor does the data show that short-term rentals within the city of Austin present a public nuisance.”

City lawyers will see them in court. 

A spokesperson for the city of Austin said, “The City successfully defended the short-term rental ordinance in the trial court. Against the backdrop of a favorable trial court decision, we will continue to defend the ordinance in the appellate courts and look forward to the court’s review.”

Owner’s Rights

“I like to provide a doormat to Austin. And say, ‘Hey this is a great place to explore our fine city that I grew up in,'” said Jay Reynolds, a property owner and manager. He rents out his south Austin home month to month.

Reynolds says his renters are families on vacation, retirees during the winter and people just moving to town. 

“I have more business like that than these mythical party houses that everybody thinks that every short-term rental is,” said Reynolds.

The problem is he doesn’t live at the house. The city is phasing out exemptions, so in 2022 he’ll have to stop.

“It’s actually about stranger danger. It’s this whole idea about this boogie man that could be there or could not be there,” said Reynolds.

Ordinance protects against commercial investors

“We want to preserve those housing opportunities for Austin families whether they are renters or owners. And what I heard increasingly from community members is that they didn’t want to live next door to a mini hotel,” said City Council Member and Mayor Pro-Tem Kathie Tovo, who pushed for the rules along with Council Member “Pio” Renteria.

Renteria says the appeal is another example of outsiders telling the city what to do. 

“I see that [Paxton’s] supporting investors, especially investors from out of town,” said Renteria.

The council member pushed for the rules to stop commercial business from pushing longtime neighbors out. Zoning laws, he says, allow for reasonable limits on property rights. You can still rent out your home, if you live there. 

“We hope the courts will rule in our favor because if they don’t I see a disaster coming, especially for all the central core houses,” said Renteria.

There are just under 2,000 short-term rentals in the city now. Scrapping the rules could bring many more.

The outcome of this case could affect other cities. The city of Kyle is debating whether to regulate short term rentals. A public hearing is scheduled next month. 

Last July, the city of San Marcos took steps to regulate STRs. Since then, eight property owners applied for and received permits. Online though, we found hundreds of rentals listed on home sharing websites like HomeAway and AirBnB.