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Council approves preservation projects with $5.5M from hotel tax

Monday, April 9, 2018 by Chad Swiatecki

More than a dozen projects related to the preservation of Austin’s historic buildings will move ahead, with more to follow in coming budget years, using money from the city’s portion of its Hotel Occupancy Tax.

Last month City Council approved a budget transfer of $5.5 million to the city’s historic preservation fund to pay for 17 projects determined by staff to be of the highest priority from an initial list of 28 projects with a price tag of more than $13 million. The larger list was compiled using criteria from the statute that created the hotel tax and stipulates HOT funds must be used for efforts related to local tourism.

The approved projects include renovation of local attractions such as the O. Henry Museum, Austin History Center and Elisabet Ney Museum, as well as the acquisition of the Montopolis Negro School property for an amount to be determined.

Also included in the resolution was $250,000 for Visit Austin’s heritage grants program, which is in the process of being revised so that more renovation projects throughout the city qualify for funding. (Visit Austin was formerly known as the Austin Convention and Visitors Bureau until its name was changed last year.)

In recent years, money from that program has gone unused because its criteria were too strict, and a working group dedicated to expanding the program is due to give a report and possible recommendations in June.

Mayor Pro Tem Kathie Tovo also asked staff to update the list of potential preservation projects for next year and deliver that list prior to Council receiving its next proposed budget in July.

With the city’s pool of HOT revenue growing quickly as more hotels are built throughout the city, Council members and residents said the city is likely still missing out on a significant portion of tax money generated by short-term rentals of residential property.

Council Member Alison Alter included a direction to staff to produce a report by Aug. 1 on the total amount of uncollected taxes on short-term rentals and a plan to begin receiving those funds from online platforms that are currently holding them to comply with city regulations.

“I’d like to know about any previously uncollected STR tax and whether and how we can collect HOT revenues from large platforms like Airbnb and HomeAway rather than owner-occupant,” she said.

“I understand there are STR platforms that have this money to give us, but we haven’t come up with a way to receive it because by our rules we need to have the individual STR. And it seems like there ought to be a way to solve that problem because the state is able to collect its hotel occupancy taxes from those same platforms. If we take a pot of, let’s say $5 million, and we have 15 percent more for the historic parks and preservation and 15 percent more for cultural arts, and we also have more for money for Visit Austin and the convention center, I think that’s a win that’s worth figuring out.”

During public comment resident David King also urged the city to capitalize on the growing popularity of STRs and the tax revenue they could provide.

“One of the things that would help us would be to have the hosting platforms including HomeAway and Airbnb collect the tax for short-term rentals in Austin and remit those to the city,” he said. “It gives us double benefits because we can get more Hotel Occupancy Tax revenues and we can get more unregistered hosts to register with the city.”

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Photo by Phillip Barnhart [CC BY-SA 4.0], from Wikimedia Commons.

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