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Council members approve changes to Short-Term Rental Ordinance

Friday, September 27, 2013 by Elizabeth Pagano

City Council approved tweaked regulations to the Short-Term Rental Ordinance that they hope will help smooth out the process, with debate over the issue Thursday turning out to be less contentious that many had expected.


They voted 6-1 to approve the changes to the ordinance, with Council Member Kathie Tovo in opposition.


The changes are the result of an implementation process that has had some problems. Many short-term rental owners were on hand to support changes to the current ordinance – proof that the process has been, for some, less-than-smooth.


Though Council Member Laura Morrison had voted against the ordinance the first time around, she voted in favor of the amendments, saying they were “a very good step in the right direction.”


One of the most controversial amendments, proposed by Council Member Chris Riley and passed by Council, raises the cap on short-term rentals to 25 percent in commercial districts.


Morrison made peace with the raised cap for Central Business District and Downtown Mixed Use districts. However, she questioned the wisdom of expanding the 25 percent to Mixed Use corridors in the city – virtually all of the new mixed use development that is being built in Austin. Ultimately, Council voted to apply the 25 percent cap to GR-MU, CS-MU, GR-V and CS-V zoning districts as well as the downtown districts.


Morrison had hoped to limit the increased cap to downtown, saying,. “I think we should set our laws as what we see is okay, and 25 percent is absolutely not okay.”


The new provisions also allow STRs that have been operating properly thus far (by paying hotel taxes) to have up to 90 days to register without being subject to any caps.


Significantly, the changes will create a new “Type 1A Rental” that allow rentals of less than an entire structure (most likely a bedroom) if the owner is present and the rental is limited to a single party.


The changes also address short-term rentals in multifamily units. Short-term rentals in multifamily units would be subject to the three-percent cap, except in the previously mentioned commercial districts.


Many of those who spoke asked Council to reject random inspections, saying they would violate privacy. This wish was granted, though properties will still have to be initially inspected in order to get Certificates of Occupancy. Code Compliance Director Carl Smart told Council that they would also respond to complaints.


“You aren’t going to be treated like a hotel or bed and breakfast and be subject to random inspections, because these are really different animals,” said Riley.


Council also approved the amendments that were previously endorsed by the Planning Commission. Short-term rentals could now face up to $2,000 per day in fines, with the operation of an unlicensed STR to be treated as a zoning violation.


There is no requirement to advertise the license and no requirement to obtain a license simply to advertise. An earlier version of this story indicated the need to advertise the license and to become licensed before advertising. That is not the case. 



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