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Council overhauls new short-term rental ordinance

Friday, October 19, 2012 by Elizabeth Pagano

Less than three weeks after their new short-term rental ordinance went into effect, the Austin City Council returned to the drawing board to reduce fees and look into further changes down the road.


The Council passed two short-term rental items on Thursday in an attempt to fix the short-term rental ordinance, which went into effect Oct. 1. Both items passed 5-2 with Council Members Laura Morrison and Kathie Tovo voting in opposition.


The first item slashed to $50 from $241 the notification fee, which is required to notify homeowners within 100 feet that a property is used as a short-term rental property. This fee, which brought criticism from many would-be short-term rental owners, was in addition to a $235 registration fee.


Tovo worried that the fee reduction could be interpreted as subsidizing private enterprise, and questioned the wisdom of turning away $286,000 in expected revenue from the fees. She pushed for postponement, which would give the city more time to gather data on the fee change and its impacts.


Morrison also worried about shortcuts in the normal process, and urged staffers to consider all of the stakeholders in the city, not just short-term rental owners who had trouble with the process.


“It’s just not the way that we should be doing business in the city,” said Morrison.


In addition to the fee change, City Council passed a resolution that directs City Manager Marc Ott to review the short-term rental ordinance and report back on its implementation.


The resolution asked that the city look at alternative notification methods, possible online registration, provide more information about advertising rentals and consider eliminating a requirement that owner-occupied rentals, known as Type 1 rentals, include an entire dwelling.


Also included in the resolution is a request that the city consider clarifying or eliminating entirely an affidavit that affirms the health and safety of the rentals. Some owners find the open-ended language of the affidavit troubling, and have reported that attorneys have advised them not to sign it.


Tovo had five “friendly” amendments to the resolution, which she ultimately voted against, much to the annoyance of her colleagues.


“It is occurring to me, though, that the number of friendly amendments that you are making are approximately as long as the resolution itself,” said Council Member Bill Spelman. “So, at some future date you may want to consider putting together your own short-term rental resolution.”


Tovo explained that she held off, taking staff’s advice that it was a little early to start tweaking the ordinance.


Tovo’s amendments that Council members ultimately approved asked that staff identify mechanisms for monitoring the required compliance with the Americans with Disabilities Act (ADA), consider revising the language in the ordinance that would change notification requirements from property owners to “interested parties,” consider disallowing or limiting STRs in multifamily residences and review and report on staff’s process for promoting compliance and their proactive enforcement of violations.


At one point, Mayor Lee Leffingwell grew visibly frustrated, asking legal whether one of the amendments “had any meaning whatsoever.”


Tovo’s final amendment asked the city manager to provide options for neighborhood planning areas to modify the ordinance. When Spelman rejected the amendment as not friendly, Tovo reworded it slightly to ask staff to consider options for neighborhoods, rather than provide them.


Following the passage of the resolution, staff was still scrambling to add the amendments, and feared some, like Tovo’s request to notify a greater number of people, would contradict the original resolution.


Council Member Mike Martinez instructed staff to disregard anything that did not “ensure better compliance and ease of enforcement.” He pointed out that this was explicitly stated in the resolution. Expect the issue to continue as a bone of contention between Tovo and her colleagues for the foreseeable future.

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