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STR moratorium headed back to Council

Thursday, October 29, 2015 by Elizabeth Pagano

Though the city continues to untangle City Council’s myriad proposed amendments to the Short Term Rental Ordinance, a proposed ordinance placing a moratorium on commercial short-term rentals sailed through the Planning Commission on Tuesday night.

If approved by Council, the ordinance will change city regulations in order to suspend the issuance of Type 2 short-term rental licenses for at least a year.

Planning commissioners approved the moratorium in a vote of 8-2, with Commissioners Fayez Kazi and James Schissler voting in opposition. Commissioner Patricia Seeger was absent for the vote.

“This is really the only responsible way to handle major changes in local government rules in Texas,” said Commissioner Tom Nuckols. “Because of Texas’ very, very broad grandfathering law … if you don’t basically adopt a rule that prevents what you’re studying, you’re opening a door to people filing applications while you’re studying these issues, and then claiming grandfathering when the new rules are adopted.”

Under the moratorium, Type 2 licenses would be suspended in residential areas, to be reconsidered in one year. Without Council’s explicit repeal of the moratorium, it will continue indefinitely.

Type 2 rentals, also known as commercial rentals, are short-term rentals that are not occupied by their owners. Under the current city code, there is already a cap in place that limits Type 2 STRs to 3 percent of the total residences in a given census tract.

According to the draft ordinance, Type 2 rentals will still be allowed in properties zoned Central Business District, Downtown Mixed Use, General Retail-Mixed Use, Commercial Services-Mixed Use, Commercial Services-Vertical Mixed Use and General Retail-Vertical Mixed Use, as well as in Planned Unit Developments. The ordinance does not apply to renewals of previously issued licenses.

Earlier in the meeting, Sandeep Nanda said he had no problem with the moratorium itself but asked that it be strictly limited to one year. He also asked commissioners to hold off on “rewriting the permitted use table” and separating zoning categories, because he was unclear about what the implications of that change would be. He further made the point that, of the existing Type 2 rentals, “only four or five of them” are in commercial areas.

“If that’s the intention, to put a moratorium on Type 2 licenses in residential areas, then that’s all the language needs to say. But what it’s doing currently is, it’s saying that the STR Type 2 use is now no longer permitted in any of these residential areas. And those are two different things,” said Nanda.

Nuckols said that, in his opinion, the ordinance was written that way to allow people to file Type 2 applications in “large parts of the city” during the moratorium, specifically in areas that have commercial uses.

“We don’t want to ban Type 2 STRs citywide. We basically want to put things on hold in the residential districts for STRs. So I think it’s quite a reasonable approach. And it is the right way to do it,” said Nuckols.

That approach troubled Kazi, who said that he supported the suspension but couldn’t support the inclusion of permitted and nonpermitted uses within the resolution.

Assistant City Attorney Trish Link clarified that Council had additionally voted to phase Type 2 short-term rentals out of residential areas and into commercial areas, and that the ordinance was intended to address that issue as well. She advised the commission to leave the permitted uses in the current ordinance “out of an abundance of caution,” saying, “There’s going to be 15 to 20 changes that are going to come to you in the next couple of months. This right now is to address Council’s immediate issue.”

Though their vote was on the moratorium only, short-term rental critics stuck to their now-familiar talking points. Speakers complained about the disruption and dangers they felt from Type 2 rentals in their neighborhoods, and they told the commission that their research showed that less than one-fourth of short-term rentals were operating legally, with a license.

Stephanie Ashworth, who identified herself as a member of “Neighbors for Short-term Rental Reform,” told the commission that Type 2 STRs were already banned in New Orleans, San Francisco, Santa Monica, Portland, and New York. She explained that their objection was to commercial short-term rentals, saying it was “an investor-driven market” and noting that in April 2015, 19.5 percent of Type 2 owners did not live in the city at all.

“The problem is bigger than you think,” Ashworth said. “We support the tertiary economy; we have no problem with that. What we have grave concerns about, and what we do not think is an appropriate use in our residential zones, is the short-term rental Type 2. … These are not homes, no one lives there, they are de facto hotels.”

After months of deliberation, Council passed and amended a resolution on short-term rentals earlier this month. Though the Planning Commission postponed the bulk of those changes at its meeting last night because they are still being sorted out in the commission’s Codes and Ordinances committee, the commissioners did take up the issue of the Type 2 rental moratorium.

The moratorium was initiated by Council on Sept. 17 in a 9-1-1 vote with Council Member Ellen Troxclair dissenting and Council Member Don Zimmerman abstaining.

A public hearing on the moratorium, which will take place before Council, has been set for Nov. 12.

Rusty Padlock” by GarretttaggsOwn work. Licensed under CC BY-SA 3.0 via Commons.

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