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Former Code director’s delay put STR renewals in limbo

Thursday, August 3, 2017 by Joseph Caterine

The former Code Department Director Carl Smart’s decision to pause judgment of several appeals from Type 2 short-term rental owners became clear over the course of the July 26 meeting of the Building and Standards Commission, over a year after many of the appellants’ licenses had expired.

“I don’t want to say he was stalling,” Division Manager Marcus Elliott told the Austin Monitor. “He wasn’t someone who would purposefully stall.”

At the meeting, representatives from the city’s Code Department requested the commission deny several appeals of STR expirations. Noticing an unusual gap of time between the dates of expiration and the hearing, Chair Charles Cloutman asked Elliott, who was presenting the cases, to explain.

“Our previous director was under the impression that he could make a decision on STR appeals after a certain time,” Elliott said at the meeting. “(He wanted) to make a good-hearted effort to renew their licenses even though the code did not allow it, so he wanted to gauge the universe before he made a decision.”

City Council adopted a moratorium on Type 2 STRs, the ones rented year-round, in November 2015, meaning that all renewals after that date should be denied. In several cases of tardy renewals (Elliott could not give an exact figure), Smart held off making a decision to deny their appeals, despite the urging of other Code staff and the Law Department.

Elliott told the Monitor that granting allowances to good actors had always been part of Smart’s policy. “When they were bad actors, there was no hesitation in denying an appeal,” he said. Based on the previous code provisions from January 2014, a one-time 30-day extension was permitted for STR owners who had not filed a renewal in a timely manner, but under the new ordinance, there were no exceptions.

Elliot had several meetings with Smart to remind him that these cases needed a ruling, but Smart did not end up making a decision to deny this body of appeals until August 2016, the same month he retired. In transitioning to leadership under the current Interim Director Cora Wright, code officers could not follow through on Smart’s decision but had to bring it to Wright’s attention so a new decision could be made. She immediately ruled that the cases should be denied, Elliott said.

At the meeting, the appellants made their cases as to why their operations were not an example of the party-house reputation that STRs have acquired over the years. Jennifer Deegan, who owns an STR at 2101 Winsted Lane with her husband, said that they had purchased the property so that her parents could move to Austin from Abilene, Texas. The only explanation as to why the renewal application wasn’t received when it was due in February 2016, she said, was that it must have been lost in the mail.

“My husband and I are not a business. We don’t have staff, we both work full-time jobs, we’re raising a kid, (and are) helping to take care of my parent’s health,” Deegan said at the meeting. “This is not a money-making venture for us.”

The commission voted unanimously to reverse the Code Department’s decision for each appeal, with the exception of one case that was postponed because the owner, who lived in Connecticut, could not attend the meeting. Effective immediately, owners will be able to continue operation of their short-term rentals. According to Elliott, the commission will continue to hear these backlogged cases for months to come.

Photo by Quinn Dombrowski made available through a Creative Commons license.

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