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City Faces Lawsuit Over Short-Term Rental Ordinance

Jon Shapley for KUT
Austin residents have filed a lawsuit against the city's ordinance regulating short-term rentals

This story has been updated with a comment from the City of Austin.

A group of homeowners and renters are suing the city of Austin over its effort to regulate short-term rental units, or STRs, like those you’d find on sites such as Airbnb or HomeAway.

The suit claims several problems with the city’s STR ordinance, from a cap on the number of occupants to a 10 p.m. curfew. Robert Henneke is an attorney with the Texas Public Policy Foundation, the conservative think tank that’s representing the plaintiffs.

“The city of Austin’s ordinance imposes unreasonable and unlawful caps on assembly within short-term rental properties,” Henneke argued.

Henneke gave as an example what he called the unlawful search and seizure of the properties.

“You have to agree to allow code compliance to be able to come in and inspect your property at ‘any reasonable time,’” he said. “So that means that code compliance can show up at your house, knock on your door at 10 o’clock on a Saturday morning, and say, ‘I want to come in and look around.’”

Earlier this year, City Council passed new regulations for “Type 2” short-term rentals, which are not owner-occupied, and adopted a plan to phase out these types of STRs by 2022. Those who support the ordinance say it would cut down on noise and traffic from short-term rentals that essentially serve as mini-hotels in some residential neighborhoods. But James Quintero with the Texas Public Policy Foundation disagrees.

“There have been zero citations for noise or trash in the four years leading up to the enactment of this ordinance,” Quintero said. “So at the end of the day, they just haven’t pointed to any justification for why this ordinance should be going forward other than picking winners and losers in this economy, and under the Texas Constitution, that’s just simply not permissible.”

The City acknowledged the lawsuit in a written statement.

“The Austin City Council spent many hours working through the significant issues related to short term rentals in the city, in order to best serve all citizens. The city’s lawyers are prepared to defend the ordinance in court,” the statement said.

The city’s new regulations for Type 2 STRs are set to go into effect next year.

You can view the full filing below

This story is the result of a partnership between KUT News and the Austin Monitor.

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