Austin’s short-term rental ordinance needs stronger enforcement tools

We look forward to learning the results of the city of Austin’s pilot program monitoring dozens of the city’s short-term rentals, also called vacation rentals. That initiative, which started last week, continues through July. Those results should help inform the Austin City Council about the strengths and weaknesses of an ordinance that has been cited as a national model.

But even without those results, which are expected in August, there are visible — and significant — cracks that need to be patched in the nearly 3-year-old ordinance, the worst of which is the city’s apparent inability to enforce the ordinance. The problem is twofold: The ordinance as written lacks teeth, with no penalties for vacation rentals that don’t obtain or renew licenses. But even if it had such bite, it still would be feckless, as the city lacks the staff to enforce its provisions.

When it was passed by the previous City Council, the short-term rental ordinance was billed as a compromise that would allow homeowners to exercise their property rights while upholding the integrity of residential zoning that generally prohibits commercial enterprises in single-family-zoned neighborhoods. All of those things could work hand-in-hand, Austin residents were told. At a time when property taxes soared, short-term rentals were seen as a viable way for homeowners to offset cost-of-living expenses.

Without adequate enforcement, however, that balance has been disrupted. City officials told us violations that routinely occur include loud music, traffic congestion, illegal parking, over-occupancy abuses, drunken revelers and excessive littering in residential neighborhoods. Council Member Sheri Gallo, whose District 10 is home to many short-term rentals, passed a resolution recently instructing City Manager Marc Ott to investigate enforcement problems. That was a wise move, given the growth of short-term rentals in Austin.

Austin, ranked by industry experts as one of the top markets in the nation for short-term rentals, has more than 1,100 licensed vacation rentals, with another 164 pending. Frankly, the city’s Code Department has not kept pace with the program’s growth. There are just two Code Department staffers tasked with monitoring all of Austin’s licensed short-term rental properties, which range from owner-occupied homes, condos and apartments to commercially owned or run properties.

This month’s pilot program should help determine the right staffing level needed to keep up with the city’s burgeoning short-term rental market. During the first weekend in July, the pilot program team conducted 51 inspections of 37 properties.

It’s obvious that the ordinance needs to establish penalties for short-term rentals that operate without a license, which cost $285 the first time and $235 to renew annually. That should be fixed quickly.

Also, the ordinance requires revisions in how violations are handled. Currently, they must be proven in municipal court, which in many cases is expensive and inefficient, since violators often live outside Austin and Texas. That means the city must pick up travel and court costs. We endorse a Code Department proposal to shift violations to administrative hearings, where the charges would move from criminal to civil proceedings.

Though such problems with the ordinance surfaced almost immediately in certain parts of Austin, they got lost in the shuffle of a previous council that was elected citywide, and thus, more focused on growth, big business, environmental and other issues with strong voting blocs. But with the new 10-1 council structure — in which 10 members are elected from districts and the mayor is elected citywide — the issue gained momentum with Gallo and other council members who heard from numerous constituents about problems with short-term rentals in their respective districts.

Given the popularity of short-term rentals, it’s in the city’s interest to strengthen enforcement and monitoring of its ordinance. Austin’s short-term rentals have become a popular option for families and younger adults who want a different, and in some cases, less-expensive experience than a hotel or bed and breakfast. Renting a home, for instance, gives visitors access to cooking, laundry and other facilities associated with a house or condo. Their popularity has been helped by online listings on Austin-based HomeAway Inc. and AirBnB. On the financial side, short-term rentals generate income for Austin in the way of licensing fees, and in hotel occupancy taxes, which go to the city and state.

Fortunately, most short-term rental owners have voluntarily abided by the ordinance. But those who aren’t are turning neighborhoods into full-scale party zones. They are the biggest threat to a hard-fought compromise that gave Austin an ordinance lauded by the U.S. Conference of Mayors and the National League of Cities. Balance needs to be restored to keep the peace between neighborhoods and short-term rentals.

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