Tourism Commission proposes easier licensing among short-term rental solutions

The Tourism Commission has given City Council a list of 10 recommendations regarding the growing short-term rental economy. It stops short of pushing for formal agreements with vacation rental websites such as Airbnb and Vrbo.

The recommendations, which were created by an STR working group and adopted at Wednesday’s commission meeting, focused on three priorities: increasing adoption STR licenses issued by the city, addressing enforcement issues with problem STR homes and improving communication between all stakeholder groups.

The working group also produced a longer deep-dive paper – “Fostering a Responsible STR Ecosystem in Austin” – that will be shared with city staff to provide further details of the interviews working group members conducted with STR platform representatives, neighborhood groups and other relevant parties.

The recommendations include requiring more information from STR license holders to create a citywide database, possibly lowering STR permit fees to increase the level of licensing compliance, streamlining the application process, conducting more thorough inspections of STR sites and addressing noise complaints, and reaching out to STR platforms to push them to delist sites that are noncompliant.

Court cases directly involving the city or other municipalities’ attempts to regulate the STR industry have gradually limited Austin’s ability to put restrictions on how STR sites operate. For years, the city has avoided entering into agreements with STR platforms because generally those agreements would not provide the location-specific data on individual sites that city officials argue they need for code enforcement purposes.

Commissioner Bishop Chappell said the belief is that the city can improve code enforcement on STRs to a more acceptable level through making the licensing process as simple as possible. When asked about the possibility of using third-party data companies to track down unlicensed locations, Chappell said that practice had proven unsuccessful in the past though advancements in artificial intelligence tools could improve how well they perform.

“What we’re saying is, take more information on the intake itself so folks will be able to get their licenses, but the city is maintaining and housing that information,” he said. “So they’re better able to perform better background checks before they get a license, which then in turn should open up compliance, not to spend all of their time checking on unlicensed STRs.”

The city has struggled since the advent of STR platforms to manage how those dwellings can exist in residential areas, with neighbors of high-volume units complaining of noise problems and other quality-of-life issues created by visitors.

The working group found that an estimated 11,000 unregistered STR sites have recently operated in the city, with the uncollected Hotel Occupancy Tax from those sites representing a potential windfall for the city coffers eligible to use hotel tax receipts.

“Some of the proposed strategies that we’ve looked into were around enhancing transparency, streamlining licensing and forming a robust database that we can address the issue more on the intake side,” Commissioner Christian Tschoepe said. “And then optimize revenue collection and sustainability. This is focusing around (hotel tax) collection and how we can go about optimizing permitting and then fines and criminal penalties.”

Chappell also floated the possibility that the city could implement an optional charge for guests that would further support the arts, music and historic preservation.

Commissioner John Riedie said that optional charge could add even more revenue for uses that would benefit from additional hotel tax revenue.

“That was a technical challenge, perhaps, but primarily I wanted to include that just to make sure we were mindful of the fact that visitors come here for the culture, and we want to look at opportunities for visitors to support that culture in other ways.”

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