Council gives final approval to short-term rental rules

After two years of heated debate, which came close to a boil this week, the City Council approved regulations on short-term rentals (STRs) properties last night, voting 5-2 to allow both owner-occupied and the more controversial non-owner-occupied short-term rentals in residential neighborhoods. Those regulations are slated to go into effect Oct. 1. 

The vote, on second and third readings, was exactly the same as the Council’s first-reading vote on June 7. Council members Laura Morrison and Kathie Tovo were the only nay votes on the plan put forward by Council Member Riley.

Under the terms of that plan, both owner-occupied short-term rentals (defined as single-family homes rented out for 30 or fewer days at a time) and non-owner-occupied short-term rentals (called “commercial STRs” by opponents) are allowed in residential neighborhoods. However, the number of the second type cannot exceed 3 percent of the total number of single-family homes in a census tract.

In the original proposal that passed on first reading, that 3 percent number related to the number of homes in a particular ZIP code, but Riley made an amendment to his own resolution last night to make it about census tracts, which represent smaller areas.

“Shifting to census tracts has the effect of distributing (STRs),” said Riley, thereby diminishing the potentially deleterious effects of clustering in particular areas of the city.

The issue of clustering has been a major source of contention in the debate over short-term rentals and continued to be last night. Morrison, who has been against allowing commercial STRs in residential areas, told her colleagues that she would be willing to vote for the Riley resolution provided certain amendments were included to cut back on clustering and saturation, issues she and other commercial STR opponents said will lead to fewer residents in certain central city neighborhoods, less affordable housing, and lower school enrollment.

Morrison’s substitute motion, which mirrored amendments that had been presented earlier by neighborhood advocate Susan Moffat, included requiring 1000 feet between non-owner-occupied short-term rentals, capping the total number of those properties allowed in a single region (ZIP code or census tract) to 1 percent, rather than 3 percent, of the total number of single-family homes, requiring all properties to be compliant with the Americans With Disabilities Act, and prohibiting commercial short-term rentals in multifamily buildings.

Riley rejected those provisions when presented individually as friendly amendments by Tovo.

Council’s vote ends a long and contentious debate in the city over the role of short-term rentals in residential neighborhoods (see In Fact Daily, August 2, 2012).

That debate was in full force again last night after Council voted unanimously to reopen the public hearing on the original Riley proposal. Judging solely by the volume of applause, it seemed that the pro-STR crowd in attendance was larger than the anti-, but both sides got their licks in.

Speaking directly to contentiousness of the debate, Nikelle Meade, a lawyer representing short-term rental company HomeAway, said, “For the first time in my life … I’ve witnessed people personally attack their neighbors, personally attack our elected officials, and personally attack the public servants on our city staff. I’ve witnessed people so infuriated and beside themselves that they’ve lost all self-control and have resorted to threats, slurs, lies, and attempts at intimidation. … Are we really trying to teach our children that anybody unlike them or different from them or that they don’t personally know is unwelcome and unwanted?”

But Susan Moffat, in a 20-minute presentation, countered that allowing commercial short-term rentals in residential neighborhoods could have enormous negative impacts on the Austin community.

“What this (ordinance) allows is the removal of over 5500 homes citywide, allows the removal of a completely unlimited number of apartments citywide, squeezes the housing market, increasing costs citywide, decreases the viability of our public schools … and erodes traditional bonds between neighbors and weakens our community,” Moffat said.