Texas Politics

Cities can’t ban short-term home rentals under Senate plan

The Texas Senate approved a bill protecting short-term rentals in this state. The measure now heads to the Texas House.
The Texas Senate approved a bill protecting short-term rentals in this state. The measure now heads to the Texas House. atinsley@star-telegram.com

Property owners in Texas would be allowed to continue to rent out rooms — or their entire houses — for short periods of time under a bill state senators approved this week.

Despite concerns raised from cities such as Fort Worth, the proposal would prevent Texas cities from banning these short-term rentals of less than 30 days.

“Since short-term renting became mainstream, thousands of Texas homeowners have chosen to use their private property as a source of income to help make ends meet,” said state Sen. Kelly Hancock, R-North Richland Hills, who authored the bill.

“Nonetheless, a number of cities have banned the practice or are heading in that direction,” he said. “In Texas, we still believe property rights are a foundational freedom worth protecting, and that’s what this bill does.”

Short-term rentals are a growing trend, particularly through Airbnb or HomeAway, as travelers rent rooms or entire homes — rather than traditional hotel rooms — for sporting events, concerts or just regular travel.

Statistics show that short-term rentals in Texas were linked to $1.5 billion in economic activity in 2015, generating thousands of more permanent jobs and millions of dollars spent on everything from food and beverage to retail sales.

But some fear allowing these rentals to continue in Texas will lead to shrinking property values, as homeowners rent houses to visitors who may hold loud parties and bring more traffic into private neighborhoods. A growing concern, some say, is that out of state investors are buying some of these homes solely to rent out the rooms.

“Essentially you’re allowing a commercial use in a residential neighborhood,” said Randle Harwood, director of planning and development for the city of Fort Worth, who is among the officials opposing this legislation.

‘Wild ... parties’

“Most of the renters are not going to be an issue,” Harwood said. “But you will have people rent houses and turn them into wild, uncontrolled fraternity house parties. Once that occurs, the relative peace and tranquility of a neighborhood doesn’t exist any more.”

Some cities such as Austin have been regulating this industry by requiring permits or hotel taxes to be paid. In Austin, city leaders last year put in place a ban on full-time short-term rental facilities in residential neighborhoods by 2022.

In Fort Worth, short-term rentals are not allowed in neighborhoods that are only zoned for residential use. Rules here do let property owners apply for “bed-and-breakfast permits” under some conditions.

And in Arlington, there’s no specific zoning regulations regarding short-term rentals, but the city asks those allowing short-term rentals to register with the city to pay a hotel occupancy tax.

Hancock said his bill, Senate Bill 451, is geared to eliminate a patchwork of inconsistent ordinances across the state that govern a growing trend in the tourism industry.

“The intent of the bill is to maintain a statewide program,” he said.

Some senators this week — including Kirk Watson, a Democrat from Austin, and Larry Taylor, a Republican from Galveston — unsuccessfully tried to amend the bill to exempt their communities.

Hancock’s bill heads to the House where a similar bill, House Bill 2551, was left pending after a committee hearing this week.

Hancock said his bill lets cities still enforce sound, safety and nuisance ordinances. And he notes cities may still regulate short-term rentals. They just can’t completely ban them.

He said some people believe the bill lets cities regulate too much; others believe the bill doesn’t let cities regulate enough.

“Hopefully we’ve found that sweet spot in the middle that addresses concerns while maintaining private property rights,” Hancock said.

This report includes information from the Star-Telegram archives.

Anna Tinsley: 817-390-7610, @annatinsley