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HomeAway launches effort to keep short-term rentals “Neighborly”

Thursday, February 18, 2016 by Elizabeth Pagano

Now that the ride-hailing debate is in the hands of voters, City Council is set to return to another favorite time consumer: short-term rentals. And, although it has kept a relatively low profile to date, HomeAway held a press conference to let the city know that it is concerned with some of the options currently on the table.

The company, which is based in Austin and was founded in 2005, has proposed the “Stay Neighborly” initiative, which it says will help ensure that renters are complying with city ordinances. The plan includes a new no-tolerance policy for bad actors, a way for owners to include their STR license numbers in advertisements, a communication portal between the company and municipalities, and a new resource center where owners can learn about regulations and best practices.

“We can take away the livelihoods of the bad actors,” HomeAway Chief Operating Officer Tom Hale told the Austin Monitor. “That’s the leverage here that we’re trying to deploy. … We have to approach this with fairness and with balance, (but) we can definitely help with enforcement.”

On Wednesday, HomeAway CEO Brian Sharples also spoke with the Monitor, following his press conference. He explained that the company had, up until now, kept a low profile because it believed that “cooler heads would prevail.” He said the company was making a big change in that, up until now, it didn’t have the legal right to get people out of the business. It has now changed its terms and conditions so that owners who list with HomeAway must comply with local ordinances.

During the press conference, Sharples explained that the company is launching the pilot program here because Austin is its hometown. He acknowledged that the move may appear to be “self-serving,” but he noted that the Austin market is, in practical terms, a very small share of the company’s business (amounting to about 400 Type 2 STRs in Austin out of 1.3 million rentals). Sharples also questioned the rhetoric surrounding Type 1 owner-occupied STRs and Type 2 STRs, where the owner does not live on-site.

“There is this notion, I think, that somehow there’s going to be a different type of renter in a Type 1 versus a Type 2, which is completely fallacious,” said Sharples. “Why you would choose to phase out Type 2 and not Type 1 doesn’t make any sense, because the renters are the same. … (And) why they should choose to phase out short-term rentals at all when there’s just been a few bad actors … makes no sense.”

He also noted that the controversy around vacation rentals was a new wrinkle in a seasoned industry, saying, “People have always rented vacation homes. Millions of people do it throughout the world, and they’ve done it in Austin for a long time. Those properties, historically, have been what the city calls ‘Type 2’ rentals. … And there hadn’t been a lot of controversy in this industry until some other folks came along and started creating what’s called ‘Type 1’ rentals.”

Of course, not everyone feels that way. In December, the Planning Commission voted unanimously to phase out Type 2 short-term rentals in residential areas by 2020. Its decision was based largely on land-use issues, but aided by what Commissioner Tom Nuckols dubbed the “Gordian knot” of regulations surrounding the rentals and the approximately 440 “person hours” of Council’s time that has helped construct that knot.

Mayor Pro Tem Kathie Tovo told the Monitor that she thought HomeAway’s proposal would work with Type 1 STRs, which she is committed to preserving. She said, “I think it’s very helpful, and I appreciate that they heard the concerns and responded to them with a program I think could prove very useful.”

But she still thought it was “very critical” to move forward with the remainder of the amendments to the STR Ordinance set for discussion next week.

“I’m still committed to urging our Council to remove commercial short-term rentals from our neighborhoods,” said Tovo. “It’s the right thing to do from a housing perspective, from a planning perspective, from a community perspective, from a school perspective – and for all of those reasons I still believe we shouldn’t have mini-hotels operating in our residential neighborhoods.”

Concluding his remarks, Sharples said that the Stay Neighborly initiative was about “making the industry as safe as possible.”

“We’re the biggest in the industry, so if we do this, we will have a huge impact,” he said. “And we’re here to say to the City Council, as well, that you’ve already agreed to (a) moratorium to let this issue settle out and study the problem further. Let’s give this kind of program a chance to work. Let’s not reopen this debate. … It would be a huge mistake.”

Another big player in the industry, Airbnb, released a statement to the Monitor about the initiative and said that the company was “fully committed to supporting the development of fair, effective, and progressive policies around responsible home sharing in Austin.”

The company pointed the Monitor in the direction of its Community Compact, which it described as “a pledge to equip policymakers and the public with the information they need to craft rules for home sharing, both in Austin and across the country.”

It continued, “We appreciate the City’s time and consideration on this issue. Time and time again members of our community have shown up at hearings to share their stories. Home sharing represents an essential economic lifeline to help middle class Austin families pay the bills and make ends meet.”

Mayor Steve Adler kept his statement about the initiative to the point. It read, in its entirety, “I support the efforts of Home Away to establish the Stay Neighborly initiative.”

On Wednesday, it was clear that the biggest sticking point is a proposed phase-out of Type 2 STRs. But, as we reported in January, that isn’t the only thing left to talk about. Council will also discuss: occupancy limits (and assemblies), a three-year renewal inspection, a 1,000-foot buffer between Type 2 rentals, certification that STRs haven’t been red-tagged for other reasons, a “local contact” requirement, certificate of occupancy limits, an Austin Water utility septic review, a “bad-actor clause” for repeat offenses, a 24-month review, license-renewal denials for suspended licenses, guest registries, sound requirements, advertising of short-term rentals, amending the zoning table, changes to the property maintenance code and a noncompliance fee.

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