Wednesday, November 30, 2011

Austin Organizes to Protect Vacation Rentals


Austin has put on a very organized effort to make sure that new vacation rental regulations make sense for their local community.  HomeAway.Com is a major employer in downtown Austin, and has assisted in the effort.  Here are some excerpts from their web site.

The Austin Rental Alliance is a non-profit trade association made up of property owners, property managers, management companies, and members of the Austin business community. The ARA works diligently with city, county, and state governments, the local community, and property owners to establish fair and effective regulations and tax compliance for property rentals of less than 30 days.

Myths and Truths regarding STR’s

Myth: Entire neighborhoods will be consumed by STRs operated by large corporations and/or hotel chains.

Truth: HomeAway advertises STRs throughout the world, and we are not aware of any corporations buying single-family residences for short-term rentals.

Myth: STRs are commercial uses rather than residential because they generate income for the owner.

Truth: Any collection of rent generates income for the owner, but generation of income does not change the character of the residential use. By this definition, renting long-term would also not be a residential use because the owner generates income from renting the home. This is clearly not the case, nor is it the case with STRs.

Myth: The number of STRs in Austin is so prolific that STRs are taking over neighborhoods.

Truth: The U.S. Census data shows 354,241 total housing units in Austin, yet on HomeAway, the largest advertiser of STRs, there are approximately 370 STRs listed in Austin, representing less than one percent (0.10%) of total housing units.

Myth: Most STR owners own multiple STRs in neighborhoods throughout the city.

Truth: HomeAway estimates STR owners have an average of only one home in any given market, and there is nothing about Austin indicating any different trend.

Myth: Tourists, visitors and STRs are bad for the character and fabric of neighborhoods.

Truth: The core demographic of travelers who stay in STRs are families who prefer these alternative accommodations because of the value and space found, versus that of a hotel. These families are patrons of the local businesses in the neighborhood and should pay occupancy taxes, which benefit all neighborhoods in the city.

Myth: STRs are reducing residential housing stock.

Truth: The typical owner does not want to sell their second residence; they usually want to preserve it for their future personal use. In fact, nearly 60 percent report they plan to leave it to their heirs or return and move into the home and stop renting to travelers.

Myth: STRs are responsible for the recent AISD decision to close inner-city schools.

Truth: There are documented reasons unrelated to STRs why inner-city schools are closing. The reasons include the facts that Austinites are having fewer children and Austin families earning median income find it difficult to afford to live in inner-city neighborhoods. Further, many suburban neighborhood homes are larger and newer than inner-city homes, making it more attractive to families with children. Lastly, STRs make up such a small percentage of the overall housing in Austin that their existence could not have a significant impact on schools.

Myth: STRs bring down property values.

Truth: There are more indicators suggesting STRs support property value, or even raise property value, than bring it down. In order to keep their properties desirable, owners must maintain the home. Most employ lawn services and maintenance personnel to keep the home attractive and marketable. According to a HomeAway Vacation Rental Marketplace Report issued May 2011, 62 percent of STR owners say they use their STR rental income to make improvements and upgrades to the home.

STR owner Bob Easter elaborates, “As a property owner renting out my property, I am required to keep the property in good physical and structural condition or it won’t be attractive to visitors. As an example, in the past year I have landscaped my STR property using the City of Austin Water Wise plant suggestions and installed a sprinkler system to save water. These two improvements ran over $5,500, which flowed right back into the Austin economy. In the past few years we have made upgrades to the electrical system, plumbing, water and energy saving improvements exceeding $28,000. The home is safe, clean and well maintained.”

Myth: STRs reduce long-term rental options.

Truth: As stated above, the number of short-term rentals as compared to the number of other residences within Austin neighborhoods is extremely low. Since the number of non-STR residences is far greater than the number of STRs, there are many long-term rental options and STRs are not numerous enough to threaten the existence of those opportunities.

Additionally, many STR owners also rent their homes to long- term tenants from time to time. STRs don’t necessarily remain STRs forever.

Finally, not every home is suited to be a short-term rental. To attract visitors, the property must be fully furnished and well maintained.

Myth: STRs impact affordable home sales by attaching commercial revenue to residential property.

Truth: Again, STRs, just like long-term rentals, generate income but that income has no direct impact on property values in an area. Thus, the presence of an STR does not affect the affordability of home sales.

Austin Contact Information

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