A neighborhood battle emerges amid Austin’s short-term rental rules


Highlights

Neighbors complain violations at some short-term rentals aren’t being policed adequately by the city.

Some short-term rental property owners say the city is being too tough on them.

One little street on the south shore of Lady Bird Lake has become a heated front in Austin’s war over short-term rentals.

On Edgecliff Terrace, Robert Reeves has spent years calling in complaints against two rental houses that sit across a cul-de-sac from him: a 1917 residence that is licensed for rentals and a 1923 one that is not. Reeves orchestrated a sting operation against the 1923 home two years ago, but he says it still brings cars and noise to the neighborhood. He’s sicced code enforcement officers on the 1917 house, saying it routinely exceeds the strict capacity limits City Council members passed earlier this year.

Now he’s suing both of his neighbors, claiming they are violating Austin’s short-term rental rules and ruining the neighborhood’s quality of life.

The dispute is a microcosm of Austin’s angst over such short-term rental properties. Rental owners say they’re harassed by city code enforcers. Neighbors complain that nothing stops the disturbances. City Council members with differing agendas have jumped into the fray — an aide to one likened city enforcement officers to Nazis, while another council member was concerned that the officers aren’t proactive enough.

Both of the Edgecliff Terrace houses sit lakeside, within walking distance of South Congress Avenue, with room to sleep dozens of people — perfect for big group getaways in Austin. But they’re running into Austin’s revamped short-term rental rules, passed in February after months of emotional debate. Among other things, the new rules ban more than 10 people from being in a rented house or more than six from being outside on the property together.

The rules also phase out such rental properties, prohibiting full-time short-term rentals in residential areas by 2022. Homeowners who live on-site will still be allowed to bring in renters if they are home or if they are temporarily out of town.

In the meantime, rising property values and Austin’s popularity has led to more people buying homes in neighborhoods to rent for hundreds or thousands of dollars nightly — investments they made before the city changed the rules, they say.

The battle on Edgecliff

Reeves, a 43-year-old tech entrepreneur, wants people to know that he’s a punk-rocking former University of Texas fraternity brother who’s not trying to give the impression of a guy yelling at kids to get off his lawn. But he’s sick of the newfound transience to his neighborhood.

He recounts stories of days when there were too many cars for him to drive down his street and one when a loud bachelorette party next door forced his young son to switch bedrooms for the night.

Getting a response to such issues in the moment is tough. Police tend to be tied up with more important things on Saturday nights. The city has only three code officers dedicated to short-term rentals, often not working at night, and they have to personally observe violations to take action.

Code enforcement officers had logged more than a dozen visits during 2014 to the 1923 home, but they never got to the point of taking formal action against the owner. So Reeves got his cousin to rent the house and let code inspectors in to see that it was operating without a license as a short-term rental property.

Austin Municipal Court sustained one ordinance violation against owner Bret Vance — for a $250 fine.

That’s less than half of the $600 the house rents for per night, according to its VRBO listing. The 1917 house next door to it, during the busiest times of the year, costs over $20,000 per week.

Paul Tracy, the owner of that 1917 house, bought it in 2013 specifically for short-term rentals, according to emails he exchanged with city officials. Throughout 2015, Tracy said, he pumped more than a million dollars into repairs as city code changed around him and he battled with the city to renew his rental license.

The renewal, delayed due to construction work and outstanding building permits from a previous owner, fell just as the city rules were changing, leading to confusion.

Zimmerman, Tovo enter fray

Meanwhile, as neighbors filed complaints claiming too many people were at Tracy’s house, he began to keep a “harassment log” of visits from code compliance and recorded surveillance video of code officers sitting outside for as long as an hour.

Enter City Council Member Don Zimmerman.

The lakeside neighborhood is nowhere near his far northwestern district, but Zimmerman was eager to find consequences of the rental restrictions his council colleagues approved, which he voted against. Zimmerman, who lost his re-election bid last month, has also been supportive of residents’ complaints against code enforcement.

In an email referring to city code officers as “brown shirts” — a slang term for Nazis — Tim Kelly, Zimmerman’s director of constituent services, asked Tracy to document the officers’ names. Kelly then emailed a list of seven code employees to Daniel Cardenas, an assistant director in code compliance, asking if they were properly certified. It’s unclear if he got an answer.

Council Member Kathie Tovo, who represents the district and supports the short-term rental rules, has opposite concerns. She said last week that she just recently received information on the Edgecliff Terrace situation, but is frustrated that violations of city ordinances appear to be continuing.

Vance, who owns the 1923 home, declined to discuss the situation, citing the litigation. Tracy, who eventually got his rental license renewed in June, mostly declined to comment as well. But he noted he had spent two years and a huge amount of money fixing up the house, only to have the rules change.

“Let’s be honest, it’s going to take me years and years to recoup my million dollars,” Tracy said. “I’m not just a greedy bastard. But I am someone who’s caught in a system that’s unfair and a moving target.”

A larger fight

Fallout from the rise of short-term rentals and the rules passed to govern them has left no one happy.

The Texas Public Policy Foundation sued Austin in June, arguing that the city’s rules are too stringent. Texas Attorney General Ken Paxton joined that lawsuit in October.

Others argue the city’s rules haven’t done enough. Mike Polston, a neighborhood and anti-short-term-rentals activist in northwestern Austin, wrote to the City Council in September urging greater enforcement of problem rentals. He decried that there is no budget to enforce the city’s short-term rental policies and said violations and neighborhood disturbances are frequent.

It’s unclear to what degree the new rules have changed conditions around problem houses. The number of complaints over short-term rentals zigzag by month, both before and after the council revamped the regulations in February. But at least a couple of summer months showed a decrease in 2016 from 2015.

Carole Price, an owner of several rentals in the city, maintains that most licensed rental owners are responsible. She owns four 1940s-era houses in the Zilker and Bouldin neighborhoods that she’s had since the 1990s. For years she rented them via long-term leases. But as the property values rose, rental income could no longer keep up with property taxes, she said. So she switched to short-term rentals.

“We’ve heard the argument that we’re taking long-term housing away,” she said. “There’s no real answer to that because, we may be taking long-term housing away, but we’re providing a service that’s needed.”

Price hasn’t had any issues with the city at her properties, she said. But she’s frustrated by rules that don’t make sense to her — for instance, that seven people can’t have a barbecue outside together — and the eventual elimination of her rentals. The previous City Council opened the door to short-term rentals with licensing rules in 2012 and 2013, only to have a new council overhaul them this year.

“You have one City Council that gave us a right and another council that took it away,” she said. “So that’s the outrage you’re seeing on our side.”



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