Wednesday, November 23, 2011

Austin Still Split on Vacation Rentals

Austin, TX is still embroiled in its controversy about Vacation Rentals. This is ironic, given that Austin is the home of the worlds largest company devoted to serving Vacation Rentals, Homeaway.Com - a major employer located in the middle of downtown Austin.
By Andrea Leptinsky, Wednesday, 23 November 2011

CENTRAL AUSTIN — After six months of community involvement and discussions, city staff are now reviewing a work group’s findings that allow short-term rental properties to remain in Austin, provided they follow soon-to-be-approved regulations.

The recommendations, created by the work group—which consisted of stakeholders, residents and city staff—institutes registration fees and requires all commercial STRs obtain conditional use permits. But even more so, they sharply divide a city that bases its position on one common thread: a sense of community.
“It’s a social contract when you buy a house and you put your life savings into it,” said Kevin Wier, a North Shoal Creek resident. “[This issue] breaks down the fabric of a neighborhood, lowers the quality of life for residents, lowers property values and sets up the potential for more crime, too. When you get short-term rentals in, and you have unknown people coming and going all the time, it breaks down that social fabric, and you don’t know who’s supposed to be in the area.”
However, according to the Austin Board of Realtors, STRs help attract tourism and potential new residents.
“Short-term residential rentals fulfill this unique market demand and provide a source of income for property owners,” the group stated in its September/October issue of Austin Realtor magazine. “The Austin Board of Realtors is reaching out to Austin City Council members, the Austin Neighborhoods Council and other stakeholders in an effort to defeat an ordinance that would impose licensing requirements, registration fees and density restrictions on homeowners wishing to lease their homes for less than 30 days.”
As of early November, the Austin Neighborhoods Council was finalizing its own resolution that would ban all short-term rental properties except those that are owner-occupied. It also caps those properties’ available per-year rental time to 60 days. Once the resolution has been adopted, it will be passed to City Council for its review.

Moving forward

The recommendations, presented to the Codes and Ordinances Subcommittee on Oct. 18, is the first step the city is taking toward regulating STRs. Currently, there is no existing city policy that governs the use of residential properties as short-term rental establishments.
The fact that the work group began its research and discussions assuming short-term rentals would remain legal angered some participants, residents said.
“As a condition of task force participation, we had to accept the premise that commercial short-term rentals would be accommodated rather than outlawed,” said Maurice Anderson, an Allandale resident.
Austin Neighborhoods Council board member and Allandale resident Cynthia Keohane said while the work group helped everyone understand the positions of other community members, it forced an assumption that some were not willing to forgo.
“I think it really helped educate commissioners who were involved in it as to the depth of the issue and the seriousness of the issue … but there are some things you can’t compromise on,” Keohane said.
Now that the subcommittee has those recommendations, the city staff is conducting its own required review.
“We’ll take a look at it and see if it makes good policy sense, ask if there are issues with implementation that Council may want to address at the time of adoption and any legal issues that need to be considered,” said Robert Heil, City of Austin senior planner.

New policy

The work group said the following recommendations should be instituted to appropriately manage STRs in Austin:
All STR property owners must follow current city policy, pay the appropriate hotel occupancy taxes and abide by the city’s Dwelling Unit Occupancy Limits, which says no more than six unrelated people can stay in the unit at one time.
STR owners must provide emergency contact information by posting it on the property or distributing it to neighboring residences within 100 feet of the property.
STR owners must supply information packets containing parking restrictions, a trash collection schedule, occupancy limits and other city policies to occupants.
The recommendations also target commercial STRs, which are uninhabited properties that are rented for less than 30 days at a time. Those properties will be required to obtain a conditional use permit to run the home in a manner other than what it was zoned for. Commercial properties must also obtain annual licensing and must be at least 1,000 feet away from nearby rental properties including bed-and-breakfast establishments.

Responses

In addition to the Austin Board of Realtors, Austin-based HomeAway Inc. is unsupportive of the proposed changes due to the lack of enforcement it believes the city will be able to provide for the new requirements and the possibility they will hinder growing tourism in the area.
HomeAway.com is a website used to advertise short-term and long-term rentals. As of Nov. 6, the website showed 593 rental homes available within Austin.

Long-term resolutions

Planning Commission Chair Dave Sullivan said he hopes the conflict resolves itself as the housing market improves or as the STR trend begins to lose some of its appeal.
“I would like to figure out some way, over time, to get more families to come in and replace short-term rentals,” he said. “I’m hopeful we’ll be able to attract buyers to buy some of these homes, but it’s hard for us to do an economic model to figure out what exactly we have to do in order to do that. At some point, it might be that there’s so much red tape, the investors may want to give up and sell it when the market comes back.”
Once the staff review is complete, the list will move to the Planning Commission, which will hold a public hearing on the topic. It will then shift to City Council, for a second public hearing and a final vote.
Heil said the hearings most likely will not occur until after the holiday season.

3 comments:

  1. I own one vacation rental house in Austin. I was in the City work group that resulted in the Planning Commission's recommendations to the City for a new ordinance governing short term rentals, also known as vacation rentals (VRs), and I can tell you that it was a long & frustrating process for those on both sides of the issue. The recommendations the Planning Commsn. have in hand now, however, are no where near what the work group agreed upon in our compromise plan, but have been rewritten to heavily favor one side's preference of heavily regulating VRs.

    A very small group of very loud people have managed to convince some members of the Planning Commsn., the City Council, and other organizations that VRs are a threat to Austin, using conjecture and undocumented "facts." Ask for actual facts behind the arguments against VRs, and these people cannot produce them. Keep that in mind as you read their comments, which will surely be made here.

    The FACT is that there were, at last count, only 370 VRs within the Austin city limits and less than 600 in the entire metro area. That is only 1/10 of 1 percent ( .01% )of the residences within the city. Even in the neighborhood with the highest percentage of VRs, only about 2% of the houses are rented in this manner. That is way too small a percentage of houses to pose any kind of threat to any neighborhood. Also, many of the (unproven) complaints against VR houses (noise, parking, garbage), are the same complaints often made of ANY neighbor, be he long-term renter or home-owner.

    Owners of VRs do not see their properties as commercial enterprises, as their opposition describes them, but as furnished rental properties that are rented for shorter terms. Most are owned by individuals, not big companies, who often own only one rental and who are concerned about blending in well in their chosen neighborhoods. As a matter of fact, most of my renters are in Austin visiting their families who live in the neighborhood or are "trying out" a neighborhood where they want to buy a house.

    The Myths and the Truths of the anti-VR arguments are discussed on the website of the Austin Rental Alliance, a new association of furnished rental owners, www.austintentalalliance.com . As more owners join the association, we hope it will, through guidance and education, become a force for helping VR owners manage their properties even more effectively than they do now, relieving the City of the burden and expense of creating city codes and/or a bureaucratic arm to do this.

    I have to agree, in part, with Planning Commissioner Sullivan that "this conflict will resolve itself" without a lot of governmental intervention. The number of opponents to this type of rental, regardless of how loud they are, and the number of VR owners, is in fact way too small a percentage of the city's population for this to have become such a large issue. Vacation Rentals have been around for YEARS and have not yet ruined any Austin neighborhood, nor have the numbers mushroomed out of proportion. Yes, there are a few more now, or at least they are more visible thanks to websites like Homeaway, but remember: 1/10 of 1%. Double that number - and I'm NOT saying they will - is still not even a drop in the bucket.

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  2. Unfortunately, many of these conflicts "resolve themselves" in ways that are very detrimental to VR owners. Good luck, and let me know if I can help.

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  3. We also own some rental property that has been furnished and rented for shorter terms anywhere from 2 nights to several months, as the market demands. There is a huge demand for this type of rental in Austin, for many reasons. We see people moving to town and wanting to check out the area before they buy, families in the neighborhood that want their loved ones near by for various occasions, people who come to Austin for work part of the month and don't want to have a full time rental, local residents that need temporary housing while they recover from a disaster or remodel their homes, to people that just want to come to Austin to enjoy what we have to offer. Austin should be welcoming visitors with open arms as it reaps the benefits of the tax revenue (HOT and sales tax) that comes with them. The market demands this type of rental property as people change the way they travel and we need to encourage these owners who offer high quality accommodations, not try to regulate them out of existence.

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Thoughtful comments are welcome, whether you are in favor of vacation rentals or concerned about the impacts of VRs on your community. Comments that contain advertising, including ads for properties, will be deleted.