Minus occupancy limits, new STR rules approved

City Council Member Don Zimmerman and Mayor Pro Tem Kathie Tovo have finally found something they can agree on: The city’s current regulations of short-term rentals and their enforcement are, as Zimmerman put it at Thursday’s Council meeting, “a train wreck.”

However, Council moved forward Thursday on tightening up those regulations but did not take action to prohibit more than six guests per short-term rental house. That is a major request from neighbors of homes turned into bachelor party pads and other types of party houses.
In the end, the vote was 10-0, with Zimmerman abstaining.

The new rules would require property owners to maintain a guest registry, to comply with noise regulations and to abide by building permits that prohibit occupancy of the structure, and also would authorize a code official to suspend or revoke a license “when false information is included in a license application and when the license is issued in error.”

That occupancy question and several others will return to the Council Planning and Neighborhoods Committee in mid-September, and whatever is approved at that time will come back to Council following that meeting.

Although Tovo was hoping that Council would establish firm occupancy limits to prohibit more than six persons per rental unit, the rest of the Council supported Council Member Ellen Troxclair’s amendment removing that item from consideration on Thursday. Tovo opposed the rules put in place by the previous Council as not sufficiently stringent, but she was in a minority there and she continued to be on Thursday.

Zimmerman predicted that the Code Department would not enforce the new rules. He reasoned that it would not do so because “they didn’t enforce the other rules.”

It is clear from a cursory look at the website for HomeAway, the Austin-based company that provides a wide variety of rental options, that it is quick and easy to locate accommodations for a property that can house up to 20 guests in the Austin area. One review for a five bedroom, five bath “luxury oasis in downtown Austin” included a statement from a man who wrote, “I rented this house for my bachelor party and it was awesome.”

Palmer Quaroni represented Austinites who have been impacted by short-term rental operators who do not abide by the rules. She told Council that people on both sides of the issue could all agree “that the current ordinance and its enforcement is a mess.”

Quaroni said, “Airbnb has 5,000 listings in the Austin area alone, and the city has issued only 1,200 licenses. The city’s 311 data on complaints is woefully inaccurate. I just heard a figure that Austin has a 72 percent STR compliance rate. … Those numbers don’t add up.”

No one has a problem with what are called Type 1 STRs, Quaroni said. “We can also agree that we support people who want to live in their homes and occasionally rent out their homes as a short-term rental.” The problem is with commercial short-term rentals, properties that are used strictly for rental purposes without an on-site homeowner, she said.

Paul Hilgers of the Austin Board of Realtors said his organization supported all the proposed changes to the regulations surrounding short-term rentals except for the occupancy limits. “ABoR does not support party houses or event centers in neighborhoods. We have been and continue to be a strong and vocal supporter of proactive enforcement of property codes in all neighborhoods.

“ABoR does not understand why the code enforcement department and the city legal department do not leverage all the tools at their disposal to effectively enforce the rules and regulations that are already in place,” Hilgers concluded.

Council Member Ora Houston asked Hilgers what ABoR was willing to do to assist the city with compliance. He responded that his members had been working hard to provide information to the city. However, he reiterated that the city is not doing the job it is supposed to do in this area.

Sandeep Nanda, a property manager, told Council the new rules were not going to have much impact. The solution, he said, is to move all the violations into the administrative court, which he said would give Code “the ability and tools” to enforce the rules it already has.

Darius Sitzman noted that he has five daughters and a Type 1 short-term rental. He said he was worried about whether the occupancy limit might limit his options if his daughters moved away and all wanted to come home to stay in a short-term rental at some time in the future.

Tovo also proposed that Council immediately suspend all new licenses for Type 2 short-term rentals and make sure that any regulations for accessory dwelling units include a prohibition on short-term rentals.

Kirsten Hotopp, who testified in favor of the new rules, said they are a good first step but do not go far enough to protect neighborhoods from Type 2 short-term rentals.

Council Member Pio Renteria said he was disappointed that Code employees can’t enter a house to check on whether occupancy rules are being violated. He said he intends to bring up that matter at the committee meeting on Sept. 13. Asked about the legality of entering the house without a search warrant, Renteria said these properties are commercial, like businesses, and so should be open for inspection.

Council Member Sheri Gallo, who provided the impetus for many of the new rules, delivered a challenge to Carl Smart, director of Code, and to City Manager Marc Ott, even though he was not there at the time.

First, Gallo thanked Smart for assigning a team to work during weekend nights to enforce STR regulations. However, she added, “But after spending the last three months on this issue of enforcement, I’m going to say to the director of the Code Department, it’s time to do your job now. Use the tools you have, and the tools that we’re getting ready to give you, and let’s get the enforcement fixed for these noncompliant and non-licensed owners that are becoming such a problem for the neighborhoods.

“To the city manager, who is not here — because I would’ve hoped that he would have been here to listen to this important discussion — I say, and I would bet the rest of the Council says, and certainly the community says, that we hold you responsible for enforcing the noncompliant owners, and we expect you to make sure that our city departments uphold and enforce our codes and ordinances.”