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Board of Adjustment rejects appeals of short-term rental rulings

Tuesday, May 3, 2011 by Josh Rosenblatt

What is the meaning of the word “transient”?  That was the big question at a special called meeting of the Board of Adjustment last week.


At that meeting, the board considered and rejected appeals by two residents of the Allandale neighborhood arguing that city code actually prohibits allowing short-term rentals of residential properties in neighborhoods zoned residential.


Short-term, or vacation, rentals have become more and more common during music festivals like South by Southwest and Austin City Limits.


The appellants, Allandale Neighborhood Association representative Cynthia Keohane and fellow resident Leslie Rosenstein, claimed that the rental of non-owner-occupied residences for less than 30 days changes the zoning of properties from residential to hotel/motel. That claim, said Jerry Rusthoven of the city’s Planning and Development Review Department, is based on a misreading of the city code, which defines “residential uses” as “the occupancy of living accommodations on a non-transient basis.”


“Staff doesn’t agree with the 30 days claim,” Rusthoven said. “The term ‘transient’ is defined nowhere in … the zoning section of the city code. Without a clear definition of ‘transient,’ staff cannot agree that a lease of less than 30 days would cause a property to no longer be classified as residential.”


The debate over short-term rentals has grown loud in recent months. Last Tuesday, Council heard a presentation from city staff on best practices related to the application of a Hotel Occupancy Tax on short-term rentals. And that evening, the Planning Commission voted to create a working group to come up with a code amendment related to short-term rentals that they hope to bring to Council before the end of the summer.


Rusthoven said staff’s contention is that, though more regulations are needed, the city should address issues surrounding short-term rentals through the code-amendment process rather than a code interpretation by the Board of Adjustment.


“It’s really a policy issue,” he said.


Keohane and Rosenstein disagreed. They filed separate appeals against staff’s determination in the hopes of getting the rule changed citywide,


“We’re a family-oriented neighborhood,” Keohane told the board. She said the Allandale Neighborhood Association has two problems with short-term rentals. The first is safety: “We have a flow of strangers moving in and out of the neighborhood,” Keohane said. The second is that “we see these rentals as commercial enterprises that damage the meaning and purpose of our community. … Most of us moved here precisely because it is a family-oriented neighborhood.”


Keohane said there is a difference between a owner-occupied residence renting occasionally to travelers and properties in Allandale that are essentially being used as private hotels for visitors, some of whom stay for as few as two days.


“When a single-family home is owned for investment purposes and it is not homesteaded and it is rented out for short periods of time … for money, this is a transient use,” she said.


Rosenstein, who lives next door to the Halcyon House, a residence advertised on Austin-based vacation-rental Web site and that is not occupied by its owner, pointed out that city code prohibits commercial uses in residential neighborhoods.


Both appellants said they would like to see a less-than-30-days definition applied to the word “transient” in city code, as it is in the International Building Code and some of the city’s land use statutes.


But real estate attorney Nikelle Meade, representing Home Away, said that the appellants’ claims were based on three false premises. One, that the definition of “transient” in one part of the code can be ascribed to other parts of the code. Two, that 30 days is an established definition of “transient.” And three, that the identities of occupants should change use definitions.


“There are bad actors, but instead of dealing with the code we have on the books and addressing those bad actors, we’re trying to create definitions that aren’t in the code,” Meade said. “The city of Austin is not a property-owner association.”


According to the city’s Law Department, definitions from the International Building Code are a part of city code, but they’re not applicable in the context of zoning.


In the end, the matter came down to the definition of “transient” and to staff’s ability to enforce codes based on that definition. “We have to be able to respond to someone who asks us, ‘Show me in the code where “transience” means less than 30 days,’” said Rusthoven. “And I can’t show that person where it says that in the code.”


Overturning staff’s decision and thereby changing the interpretation of city code would have required six of the seven votes on the dais, but the appellants were only able to win over four board members: Jeff Jack, Bryan King, Nora Salinas, and Melissa Whaley Hawthorne. Chair Leane Heldenfels, Heidi Goebel, and Michael von Ohlen voted against the appeal.

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