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Conservative group sues Austin over short-term rental rules

One of the state’s most powerful conservative lobby groups, the Texas Public Policy Foundation, sued the city of Austin on Monday over its short-term rental ordinance, charging the measure violates state constitutional protections of property rights.

The lawsuit, filed in Travis County state District Court, is the latest salvo aimed at Austin City Hall. Conservative lawmakers and activists have also fought the city over its plastic bag ban and are pressing for legislation to overturn Austin’s rules on ride-hailing companies.

“Austin is ground zero for the Californization of Texas,” said James Quintero, director of the group’s Center for Local Governance. “When you look at the policy landscape here in the Capital City, what you see here are a series of nanny-state rules and restrictions.”

The lawsuit asks the court to strike down the short-term rental ordinance as unconstitutional on several grounds:

  • The city’s rules allow no more than 10 people to stay in each short-term rental property, limit gatherings outside of them to just six people and ban outdoor activities between 10 p.m. and 7 a.m. The foundation calls these rules a violation of the right to assemble, noting it “prohibits lessees from hosting a group activity, such as a Bible study, past 10:00 p.m., gathering a group of retirees for a bingo night, bringing home a date after dinner, (or) hosting a slumber party for their children.” Supporters said the restrictions were needed to crack down on party houses that were disrupting neighborhoods.
  • The rules allow for city inspectors to enter the short-term rentals, which the foundation calls an invasion of privacy.
  • The strict rules on short-term rentals, which are leased for less than 30 days at a time, include other provisions that don’t apply to apartments or homes leased year-round, which the foundation says violates state laws requiring equal treatment. Austin’s ordinance requires “Type 2” short-term rentals, in which the homeowner doesn’t live on the property, to be phased out of residential areas by 2022.


The group brought the suit on behalf of seven residents who own short-term rentals: Ahmad Zaatari, Marwa Zaatari, Jennifer Gibson Hebert, Joseph “Mike” Hebert, Lindsay Redwine, Ras Redwine and Tim Klitch.

A spokesman for Mayor Steve Adler, who was named as a plaintiff in the suit, said the mayor’s office hasn’t had a chance to review it.

While Council Member Kathie Tovo declined to address the lawsuit’s specifics, she defended the ordinance as an important effort to maximize the city’s strained supply of housing and preserve quality of life in its neighborhoods.

“It’s very clear that in the intervening years there have been very significant problems from having what are minihotels in residential areas,” Tovo said.

That ordinance is just one of several Austin measures long disliked by business groups and developers.

“Plastic bag bans, which impose on consumers; you have ride-sharing regulations, they are so onerous they are driving out companies like Uber and Lyft; you have impervious cover restrictions, which are making it hard to grow and develop; and, of course, you have your short-term rental ordinance, which infringes on property owners’ rights,” Quintero said during a conference call Monday with reporters.

His organization was friendly to Uber and Lyft during the companies’ Proposition 1 ballot fight with the city, hosting prominent ride-hailing supporters — including state Sen. Don Huffines, R-Dallas, and Council Member Ellen Troxclair — for a panel.

The invitation for the event read, in part: “Do you care if your Uber driver is wearing shorts? Does it bother you if the hubcaps on your Lyft don’t match each other? Is it even the government’s job to make these decisions? These are the types of regulations that are driving ridesharing out of cities, while simultaneously stifling the free market.”

The Texas Public Policy Foundation is not without its own controversies. It has been accused by critics and a former executive of operating a “pay-to-play” policy shop, pitching research tailored to corporations and other wealthy interests while soliciting them for donations.

Under federal tax laws, it isn’t required to disclose its donors. When asked Monday if Airbnb or any other major short-term rental companies had donated to the organization, a foundation spokesman declined to answer.

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