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Short-Term Rentals Get Mixed Reviews from City Auditor

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Image courtesy City of Austin
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While most properties surveyed were registered with the city, recommendations relating to short term rentals haven't been implemented.

A report on how best to regulate short term rental (STR) properties – houses rented out by owners through sites like HomeAway – was presented to a city council committee today. And it showed a leap in the number of properties registered, totaling 79 percent of the properties surveyed.

In real numbers, however, the increase was from 14 to 26.

Admittedly, this report from the Office of the City Auditor was given a narrow scope: to update the registration status and tax status of 33 STR properties the Auditor’s office had previously surveyed, and to determine whether three recommendations emerging from a prior audit had been implemented.

On the first front, the report found that 26 of the 33 properties – 79 percent – were now registered with city. And 76 percent of back hotel occupancy taxes the properties owed – roughly $24,600 of $32,500 – had been collected.

However, it also found that none of the three recommendations had been implemented yet.

One was to update the City Controller’s website, making it easier for STR owners to remit the hotel taxes they owe, and to partner with STR sites like HomeAway in directing owners there. Another recommendation was to create a process where other city departments could let the City Controller know of STRs they knew to be in operation. Implementation of both recommendations is currently underway, with a target date of May 31.

The third recommendation appears to be more controversial: It suggested that the Controller’s Office update the Hotel Occupancy Tax (HOT) ordinance to clarify it applies to STR properties. Although the Controller’s Office originally agreed with the suggestion, it now says it “no longer concurs.” Apparently the office feels uncomfortable changing the wording because they want it to mirror the state’s HOT statute, which it does now.

So what does all this mean? Mayor Pro Tem Sheryl Cole, who also chairs the Audit and Finance Committee that heard the auditor’s report today, says it’s a step in an ongoing process.

She applauded the uptick in registrations and tax collection, but said “we still need to identify more people that actually are short-term rentals, and begin the educational outreach effort, so that they realize they are required to pay hotel occupancy tax.”

“There’s still some more study and outreach to be done,” Cole says, citing another report due on STRs due “around the middle of April.”

You can view today’s report on the City Auditor’s website

Wells has been a part of KUT News since 2012, when he was hired as the station's first online reporter. He's currently the social media host and producer for Texas Standard, KUT's flagship news program. In between those gigs, he served as online editor for KUT, covering news in Austin, Central Texas and beyond.
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