Austin staff propose moving short‑term rental rules from zoning to business code; citizens voice safety, housing and enforcement concerns

City staff on Feb. 4 presented a draft ordinance that would move most short‑term rental (STR) regulation from Title 25 (the land development/zoning code) into Title 4 (the city business code), add host and platform requirements, and expand enforcement tools to address unlicensed listings and neighborhood nuisance complaints.

The proposal, presented to a joint meeting of the Austin City Council and the Austin Planning Commission, is intended “to promote responsible STR ownership, to help manage affordability issues, and to improve our hotel occupancy tax collection,” Trish Link of the city law department said during the briefing.

Why it matters: The changes would alter where STRs are regulated, tighten licensing eligibility and enforcement, and shift some tax‑collection responsibilities to online platforms — all steps city staff say are necessary because recent court rulings limited Austin’s prior zoning‑based restrictions. Supporters argue the package improves compliance and levels the playing field; opponents say it could reduce housing supply, insufficiently protect neighborhoods and impose new costs on long‑time local hosts.

Key provisions

- Code location and status: Daniel Ward, Assistant Development Services Director, said the draft would move the “majority of the short term rental regulations from title 25 — the zoning code — to title 4, which is the city's business code.” The draft would retain only one zoning element: STRs would be classified as an accessory use in residential zones if the operator obtains a license.

- License eligibility and limits: The draft would limit license eligibility in single‑family (three or fewer units on a lot) contexts to “individuals” defined three ways: a natural person, a trust whose beneficiaries are all people, or an LLC whose members are all natural persons. Corporations or LLCs with non‑human members would be ineligible for single‑family STR licenses. Owners operating more than one STR in single‑family contexts would need to space their properties at least 1,000 feet apart. In multifamily buildings (four or more units), an owner could operate up to 25% of units they control as STRs; individual condo owners may operate their own unit, but a single owner holding multiple units would be capped by the 25% limit.

- Grandfathering and changes in ownership: Ward said operators who already hold active STR licenses may continue operating provided they renew on time, do not become nuisances and their ownership structure does not change. Staff said the city cannot adopt a blanket prohibition on existing STRs because of court rulings.

- Host requirements: The draft would require hosts to complete an online training course, submit a self‑certified life‑safety checklist (smoke detectors, carbon monoxide if applicable, operable egress windows, posted evacuation plan and fire extinguisher location) and maintain at least $1,000,000 in liability insurance. The ordinance would require designation of a local contact able to respond within two hours; failure to respond could be a revocable licensing offense.

- Platform obligations and taxes: The draft would require platforms to include a mandatory field for the city license number in listings and would require platforms to collect and remit Austin hotel occupancy tax for bookings made through their systems. Platforms would be required to delist advertisements on request from the city when a listing lacks a valid license; a safe‑harbor provision for platforms would presume compliance if the platform displays license numbers and delists upon city request.

- Enforcement tools: Staff proposed new enforcement powers including the director's authority to impose mitigation measures as a condition of license renewal (for example, requiring larger trash containers) and to declare properties nuisances and deny or revoke licenses. Ward described practical enforcement challenges: platform listings often hide addresses and present mainly interior photos, and staff sometimes must catch guests at check‑in to prove an unlicensed STR is operating.

Staff data and outreach

Ward said the city has about 2,200 licensed STRs and believes a majority of STRs operating in Austin are unlicensed. He said 94% of 3‑1‑1 complaints involving STRs concern properties without a valid license. Staff has held four community information sessions (one Zoom session on Jan. 21 with about 215 attendees and three in‑person meetings that together drew about 36 people) and posted a public input webpage where residents can submit feedback. Ward said the planning commission will consider the item on Feb. 11 and the earliest City Council action could come on Feb. 27.

Public comment highlights

- Safety and enforcement concerns: Rose Ballard, a District 1 resident, said a shooting occurred in front of her home at an STR and that licensing staff did not appear to have been notified by APD. “Our quality of life is diminishing when we have shots fired in the street, right in front of our house,” Ballard told the panel.

- Neighborhood impacts and housing: Craig Naser, a member of the Zero Waste Advisory Commission (District 7), and Monica Guzman, policy director at Go Austin, Vamos Austin, described recurring problems of trash, noise, traffic and volunteer capacity in neighborhoods. Guzman urged a 24‑7 reporting mechanism so neighbors can reach someone who can respond quickly: “Neighbors of the STR should not have to function as management, code and law enforcement over the STR next door,” she said.

- Grandfathering and enforcement cost questions: Barbara McArthur, a District 7 resident, asked how the city will monitor and enforce rules for unlicensed listings and questioned a fiscal note the presentation described as having no fiscal impact. “If you haven't been able to control the unlicensed STRs in the past, how will you be able to control them now?” she asked.

- Industry response: Jacqueline Turway, regional manager of government affairs for Expedia Group, said Expedia and its Vrbo brand support “responsible short term rental regulations” and praised provisions requiring platforms to post permit numbers and remove listings on city request, while noting ongoing discussions with staff about tax language. Michael Whelan, also representing Expedia Group, echoed that a well‑regulated market benefits hosts, travelers and neighbors and said Expedia is prepared to collect and remit hotel occupancy tax.

- Host perspective and local income: Roland Robinson, a District 4 resident and long‑time host, said his licensed backyard ADU helps him pay property taxes and that stricter restrictions would push small local hosts out of the market. “These amendments will funnel our hard earned dollars to hotels,” Robinson said.

- Privacy and practical concerns: Darryl Guest, a District 9 host operator, asked that the city consider privacy and safety if license numbers are displayed prominently in listing pages and requested a “justifiable excuse” provision for local contacts who may be traveling and cannot respond within two hours. He also suggested third‑party host liability (Airbnb’s host protection was mentioned) could factor into the $1,000,000 insurance requirement.

Legal and procedural context

Link reviewed the legal background staff relied on in drafting the proposal, including a Third Court of Appeals decision in Zatari, which limited some earlier Austin restrictions, and a federal Fifth Circuit decision out of New Orleans that found certain homestead requirements unconstitutional. Link said those cases constrain the city's options — for example, staff cannot impose a blanket prohibition on existing STR licenses or limit ownership to residents of Austin — and explained why staff is proposing changes that focus on licensing, platform cooperation and enforcement rather than sweeping prohibitions.

What’s next

The Austin Planning Commission will take up the item at its Feb. 11 meeting at 6 p.m. in council chambers; the City Council is scheduled to consider the ordinances on Feb. 27. Staff provided a public input and Q&A webpage at services.AustinTexas.gov/budget/landdevcode25.index.cfm, and said staff will post answers to questions submitted through the process.

No formal votes were taken at the Feb. 4 joint hearing; the session was a public hearing and informational briefing.

Ending

Council and commission members urged continued public input and staff said they would consider stakeholder feedback and return with revised drafts and fiscal information as the item moves through the planning commission and council schedules.