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City of Austin wants to stop unlicensed short-term rentals. Here's how the council plans to do it

The Austin city manager will prepare an amendment to make it against the law to get paid from an unlicensed short-term rental operator.

AUSTIN, Texas — Austin city leaders want to stop unlicensed short-term rentals (STRs) from operating.

“That is increasingly a conversation about how short-term rentals are taking long-term rental opportunities off the housing market because they're always more financially lucrative than long-term rental opportunities,” Kathie Tovo, District 9, said in a council work session on Nov. 29.

Austin code lists three types of short-term rentals. Type 1 is owner-occupied single-family, multifamily or duplex. Type 2 is not owner-occupied and is a single family home or duplex. Type 3 is for multifamily housing with either owner-occupied or not owner-occupied status.

Each type carries its own rules and applications.

The City allows up to 25% of units at multifamily apartments in a commercial zoning district to be short-term rentals if licensed. Licenses must be renewed annually.

The Austin code website shows there is an eight-to-10-week processing time for short-term rental applications "due to staffing challenges."

“We've talked a lot about making these changes to increase housing supply in our community, and, you know, whether or not a short-term rental becomes a party house, it does become a mini hotel rather than a more permanent housing opportunity for someone,” Tovo said.

City documents released in 2019 show only one out of four short-term rentals are licensed.

Credit: City of Austin
Source: City of Austin's Open Data Portal

The KVUE Defenders found most of those units with licenses are in District 9 covering downtown.

In an effort to enforce licensing, the council will go after those who get paid by an unlicensed short-term rental operator.

The council directed the city manager to create an amendment to bring before the council for a vote.

“I want to make sure that we're not doing anything that would not allow projects to get built, simply because we get mad at some of the enforcement or the lack of enforcement around short-term rentals,” District 8 Council member Paige Ellis said in the work session.

The city manager will evaluate other cities’ ordinances and get feedback from stakeholders including Austin Code Department’s STR Licensing and Registration Team.

The proposed amendment must be submitted to the council for consideration by March 23.

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