City Council voted Thursday to approve a series of regulations for short-term rental properties, taking the next step in advancing changes that were kicked off by a February vote. The resolution, which collected several amendments and had others withdrawn or voted down, was approved 10-0, with Council Member Marc Duchen abstaining.
The new ordinance updates eligibility and licensing requirements and sets a new timeline for enforcement. Obligations for short-term rental (STR) platforms like Airbnb and VRBO such as requiring license numbers in listings and honoring delist notices, will now take effect July 1, 2026 — two months later than originally proposed. Other provisions, including licensing reforms and operator responsibilities, take effect Oct. 1, 2025.
Council also approved changes to the city’s spacing and capacity rules. Instead of measuring 1,000 feet between each short-term rental unit, the distance requirement will apply site-to-site, allowing up to two rentals per lot. In multifamily properties, the allowable share of licensed units was reduced from 25 percent to 10 percent, unless the building includes a commercial use, in which case the 25 percent cap remains.
Tenants will now be eligible to apply for licenses if their leases permit it, with the license holder assuming responsibility for utilities. In those situations, the licensee would have to obtain written authorization from property owners before filing their applicatoin. Staff explained that licensing violations would be enforced against tenants, while property code issues such as unpermitted construction would remain the responsibility of owners.
Councilmember Ryan Alter’s licensing amendment directs staff to simplify the application process by exploring provisional licenses and reviewing fee levels to lower barriers to compliance. Staff will return with recommendations on fee adjustments and licensing procedures in the coming months.
The most contentious proposal was Duchen’s unsuccessful amendment to impose geographic density caps on STRs. That item defeated on an 8–3 vote, with Duchen, Alter and Mayor Pro Tem Vanessa Fuentes voting in favor and supporting the view that caps are needed to protect housing supply and neighborhood stability, citing safety concerns and the impact of investor-owned rentals in gentrifying areas.
Opponents to the amendment countered that similar census-tract caps adopted a decade ago proved legally vulnerable and difficult to enforce and risked pushing operators into noncompliance.
“We have the ability to mitigate the impact of STR proliferation on our housing supply and the potentially profound effects it has on neighbors and neighborhoods,” Duchen said early in the discussion of resolution. “I’m particularly concerned that parts of Austin already facing the pressure of gentrification are also the same areas most negatively impacted by the unchecked STR growth. The regulation, as it’s currently written, doesn’t include any geographic or spatial-based assessment of the appropriate locations.”
Legal staff warned that geographic limits could be challenged under equal protection or state constitutional claims, while enforcement staff noted past caps contributed to widespread violations.
Two amendments were withdrawn before consideration, with Alter pulling a proposal tied to Duchen’s failed density-cap measure. Council Member Chito Vela withdrew an item that would have added to the city’s legislative agenda a request for permission to use hotel occupancy tax revenue for STR enforcement.
Council members said the revisions, which have been studied and discussed for more than a decade, are intended to improve compliance, strengthen enforcement, and ensure STRs contribute fairly through hotel occupancy tax collection.
“This has been a thorny and difficult issue. It has been through many different lawsuits and permutations,” Vela said. “I feel like we’re finally getting to a point where we have a workable, enforceable STR ordinance that will be able to stand up to legal challenge and also generate the Hotel Occupancy Tax that we’ve been trying to get into the city coffers.”
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