Tourism Commission joins staff in push for agreement with short-term rental companies

The Tourism Commission appears ready to push the city to come to an agreement with short-term rental platforms that will allow some regulation of the industry and allow the collection of millions of dollars in Hotel Occupancy Tax revenue each year.

Last week, the commission voted to form a working group focused on the long-standing legal impasse between the city and companies such as Airbnb and VRBO, which help an estimated 11,000-plus STRs operate in Austin, with only 10 percent of those registered as legally required by the city. The work group will conduct its research in collaboration with city staff from three departments that are working toward a resolution on the matter for City Council consideration.

Assistant City Manager Veronica Briseño said that resolution is not “fully baked” at this point in part because of recent changes in state law concerning STRs.

Commissioner John Riedie said the city has missed out on substantial sums of hotel tax revenue, much of which is required to be spent on tourism-related programs for live music, cultural arts and historic preservation.

“As a resident of a neighborhood flush with STRs, I think they’re bad for the urban environment. I think they’re bad for the societal fabric, but if the state is gonna allow them unfettered, then we should get all the (Hotel Occupancy Tax) we can out of them,” he said.

Riedie and Briseño also agreed to work together to find the language for a potential resolution that was offered by STR representatives last year when the companies made the rounds at some commission meetings pushing for a compromise with the city.

Those presentations included estimates that STRs using digital platforms and operating outside of the city’s regulatory framework could be contributing between $15 million and $20 million in hotel taxes annually. To collect that money, the city would need to enter into agreements with STR platforms that would enable the collection of taxes but likely would withhold information on the number and locations of STR sites around the city.

City leaders want that data for planning and regulatory purposes since neighborhood groups tend to view them as nuisances, but state lawmakers and courts in recent years have made it difficult to delineate where and how STRs can operate.

Commissioner Ed Bailey said the city should accept the fact that STRs have transformed the local hospitality industry, with a recent presentation from Visit Austin showing that more business- and event-related bookings are avoiding traditional hotels.

“The statement was clearly made that there’s a trend happening within convention bookings that are not typically using the prime convention hotels and that a percentage of convention attendees are booking outside the core hotel block or the core main hotel,” he said.

“Those dollars are going in the STRs and people are coming, but we’re not realizing the money. And it’s affecting, to some degree, the hoteliers or the hotel industry.”

Bailey also advised members of the working group to reach out to Council Member Vanessa Fuentes, who was involved in STR-related research and work as a Tourism Commission member prior to her election to Council.

Commissioner Stefani Mathis said any agreement the city reaches with STR platforms would need to include basic safety and health requirements for STR sites to operate legally.

“It really needs to be an even playing field as far as them having to get the same occupancy, license and have the same sort of safety requirements that hotels have to have,” she said. “A hotel has people coming in and doing fire testing and, and (inspecting) stairwells and all sorts of things to make sure that when you come to Austin and you stay in a hotel, you are not only treated with warmth and hospitality but also you’re safe.”

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