Friday, March 10, 2017 by Chad Swiatecki

Short-term rentals under scrutiny as SXSW kicks off

The Austin Code Department has started its annual tradition of stepped-up monitoring and enforcement of regulations covering short-term rental businesses, the official policy name for homeowners who rent out extra rooms to tourists visiting for the South by Southwest festival.

The lucrative practice, which is aided by websites such as Airbnb and the Austin-based HomeAway, will be policed by a seven-member STR Enforcement Team whose work began yesterday, March 9, and will continue through the festival’s conclusion on March 19. Team members began collecting data from listings websites in late February and have been cross-checking those listings with the city’s records for the approximately 1,400 properties in the city that have an official STR license.

The effort will be concentrated in the 78704 ZIP code since neighborhoods such as Travis Heights, Barton Springs, West Austin, Zilker and areas just east of I-35 are the most attractive for visitors and property owners looking to capitalize on the high demand for lodging. Also receiving scrutiny will be homes that were found to previously be in violation of the city’s STR ordinance and faced fines ranging from $100 to $2,000 per day.

Khalid Marshall, a code compliance officer for the city, said the increased popularity of Airbnb and similar sites have made for busy STR enforcement efforts in recent years as festivalgoers look for alternatives to downtown hotel rooms that charge hundreds of dollars per night.

“With lots of people staying in certain areas, like parts of Cesar Chavez and elsewhere in 78704, it can get to be like you’re living next to a hotel, and if you don’t regulate that activity, then entire neighborhoods can turn into transient businesses,” he said. “Before you know it, you don’t have a neighborhood anymore, and everything is one citywide hotel.”

Marshall said he and other members of the enforcement team prefer to prevent violations ahead of time by contacting the owners of unregistered properties that they see advertised on room-sharing sites. He said for years those sites fought efforts to regulate their business, but in recent years they’ve become less obstructionist and have even provided helpful information in some cases. And rather than sweeping through neighborhoods with a “stop and knock” approach, he said the team relies on neighbor complaints as the best tactic to find offenders of the STR rules.

For those homeowners looking to stay on the right side of the law this festival season, Marshall said it’s likely too late to receive a new STR license in time for SXSW because even the fastest approvals tend to take about a week. Properties with outstanding building permits, code violations or other legal matters in play must have those issues resolved before the license can be approved.

A 2016 study by Austin-based Datafiniti found that Austin has the highest per-capita level of STR properties in the nation, with 34,000 hotel room equivalents. It is estimated that STRs in 2015 brought in $317 million in business.

The Texas Hotel & Lodging Association doesn’t track the impact of STRs on room rates or occupancy during SXSW. In a statement, the group’s legal counsel, Justin Bragiel, said STRs need to be held to the same standards as the hotel properties they compete against.

“We ask that STR operators follow the city’s applicable regulations, as hotels and bed and breakfasts must do,” Bragiel said. “We believe this ensures all places of public accommodation are good neighbors to the residents of Austin, provide adequate guest safety and security and generate important tax revenue for the city of Austin and the state of Texas.”

Photo by Ed Schipul made available through a Creative Commons license.

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Key Players & Topics In This Article

Austin Code: Formerly known as Code Compliance, this is the city department that handles enforcement of city code violations. Its work is complaint-driven.

short term rentals: Properties rented for fewer than 30 days.

SXSW: Organizers of the massive annual festival that takes over the City of Austin each March. SXSW has donated to the Capital of Texas Media Foundation.

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