About a month before Austin’s largest influx of vacation home renters, the city has yet to take action against suspected scofflaws who have not registered such rentals as required by a 4-month-old law.
Meanwhile, the city isn’t on pace to collect the $350,000 in fees that were expected to pay for enforcement officers and other staff to run the short-term rental program.
By Thursday, 195 rentals had been registered with the city, each homeowner paying $285, $235 of which goes to the code compliance department, meaning the city has collected just 13.1 percent of what it costs to run the program.
But the city has done little to publicize the new rules, which are an attempt to regulate a burgeoning industry. The outreach effort, such as it is, has consisted of two half-page advertisements in the American-Statesman, announcements on the city’s Channel 6 and inserts with Austin Energy bills.
And, with no full-time staff hired for the program, city officials say there are no plans to ramp up enforcement ahead of next month’s South by Southwest music, film and interactive festivals, when two-bedroom homes in neighborhoods near downtown can fetch $500 a night.
Instead, two temporary workers are trolling websites such as Craigslist.org and Airbnb.com for rentals that might not be registered with the city. This month, the department plans to send letters to those potential renters, asking them to register with the city within two weeks, said Matthew Christianson, who oversees the rental program for the city.
Otherwise, code enforcement officers have responded to fewer than 20 complaints related to short-term rentals since the law took effect in October, and they haven’t written a ticket, Christianson said.
Operating a rental without a license is a Class C misdemeanor, punishable by a fine of up to $2,000 per day.
“At this point, we’re not really pushing the enforcement. … We’re really pushing hard on compliance, and we really want to give people the opportunity of complying with the law,” Christianson said.
City officials say they still don’t have a firm grasp of the number of homes being rented out on a short-term basis. But they now say they suspect the number is something less than the estimate of 1,500 that the city auditor provided last April. That number was based on a search of rentals advertised on the Internet.
The program’s budget was set based on revenue expected from that 1,500 figure.
The City Council passed the short-term rental law — requiring registration of all single-family homes that are rented out for periods of 30 days or less — in August, after two years of often contentious debate. It went into effect Oct. 1. Neighborhood groups raised concerns of creating large transient populations in areas with clusters of the rentals and that some rentals were host to noisy parties and other nuisances. A city audit found, however, little difference in police calls to short-term rentals homes compared with other homes.
Those who rent their homes are required, now as before the ordinance, to pay a 15 percent hotel occupancy tax, which goes into the city’s general fund.
The city collected $3.1 million in hotel taxes in the last fiscal year, which ended Sept. 30, from at least 267 short-term rental homes. Figures from the first quarter of this fiscal year, the first period the new law was in effect, aren’t yet available.
The council also created two categories of rentals: those that are the homeowner’s primary residence and those that operate as commercial rental homes. The latter can comprise no more than 3 percent of the homes in a census tract, according to the city’s new ordinance. Citywide, there are 106 commercial rentals registered.
Only one census tract, in Travis Heights, has reached the cap. Sandy Bowman, who operates one of the rentals in the full Travis Heights tract, said the venture has been successful for her since she started short-term renting the 1920s home eight years ago. “We went out on a limb, knowing the town is desirable, and were one of the first short-term rentals in the area,” Bowman said.
Bowman said she registered her three-bedroom home within two months of the law taking effect after clearing some issues with a permit. The house, which typically goes for $350 a night, is booked for SXSW at $750 a night, she said.
Joel Rasmussen, president of the Austin Rental Alliance, which represents people who operate short-term rentals, said most of the professional renters he knows have registered with the city, but said the registration process is too complicated for smaller-time renters.
“For people that are doing it professionally, we’ll go through the time and effort to jump through the hoops and play by the rules. For people doing it just once or twice a year, that’s a lot to ask,” Rasmussen said.
The city is currently reviewing those rules, after the council asked authorities to do so in October, and is expected to suggest any changes this month.
To learn more about registering a home with the city of Austin as a short-term rental, visit austintexas.gov/STR.