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Austin passes new short-term rental rules cracking down on unlicensed operators
By Luz Moreno-Lozano
September 11, 2025 at 4:00 AM CDT
Austin has adopted stricter rules for property owners operating short-term rentals in the city.
The Austin City Council on Thursday approved a new set of rules that council members hope will crack down on unlicensed short-term rentals, something they have been trying to do for years.
“This has been a thorny and difficult issue, and has been through many different lawsuits and permutations,” said Council Member Chito Vela. “And I feel like we are finally getting to a point where we have a workable and enforceable STR ordinance that will be able to stand up to legal challenges and generate the hotel occupancy tax that we have been trying to get into the city coffers."
The new rules will require host sites, like Airbnb and Vrbo, to put the city-issued license number in the advertisement. The host sites will also be required to remove unlicensed listings at the city’s request.
“We want to bring the STRs' platforms into the process of helping us effectively enforce our licensing requirements,” said Daniel Word, the assistant director with Austin’s Development Services Department, which oversees short-term rentals.
Word said the goal is also for the city to more quickly address nuisance concerns, like noise.
“Licensed STR locations tend to operate better and more peacefully with the neighborhoods than unlicensed locations,” Word said. “So part of the idea here is if we are able to get to a better place in terms of compliance with our licensing requirements, that might naturally cause better compliance with some other ordinances.”
He said that will also allow the city’s enforcement to focus on nuisance issues rather than chasing unlicensed properties.
There are more than 2,400 active short-term rental licenses in Austin, according to city data. But data from AirDNA, which collects listings from companies like Airbnb, reports there are nearly 15,000 active listings in the Austin area.
Obtaining a license can be cumbersome and expensive. Council Member Ryan Alter wants to change that.
“We have so many people who operate without a license, and a big reason for that is that our license is incredibly expensive," Alter said. "Someone upfront has to pay almost $800, and if they are only doing that, let's say, for a weekend, it doesn't make financial sense for them to do that.”
He said the application process is also not easy. City staff will take the next few months to find a new fee schedule and simplify the application. They will come back to the council for approval.
The changes also mean people who own three homes on the same lot will be able to operate up to two as short-term rentals. For sites with more than four units, the owner cannot run more than 25% of the units as rentals.
Alter said with the changes to the land development code, which now allows up to three homes on a lot, the City Council wanted to ensure homeowners could rent out those additional units on a short-term basis.
"It is important that we recognize that a lot of people do use short-term rentals as supplemental income so that they can afford to stay here and live here," Alter said. "If that is what they need to be able to afford to live here, I wanted to be sure that was a tool they had available."
Renters will also now be able to obtain a license under the new changes if they have permission from their landlord.
Even with the changes, Council Member Marc Duchen worries bad actors could make comprehensive enforcement difficult.
"As we move forward, I think it's going to be important that we are very attentive and nimble in this space, particularly from a technology standpoint," Duchen said. "And from an enforcement standpoint, monitoring who maybe gets delisted but finds some other way to get advertising out there.”
Thursday's vote comes after the city in February decided to postpone a decision on several new rules that would have made it more difficult for people to continue renting their homes without a license.
However, the City Council did change how Austin collects taxes from short-term rental owners.
Property owners who rent out their homes for periods of less than 30 consecutive days at a time have to pay a hotel occupancy tax. Owners usually pay these taxes directly to the city.
In April, Austin started requiring short-term rental websites to collect these taxes and send the money to the city. Airbnb has similar agreements with dozens of cities throughout the country, including Houston and San Antonio.
City officials said existing short-term rentals with a license can continue to operate so long as they don’t become a nuisance and ownership remains the same.
Austinites with short-term rentals that don't have licenses will have until July to get them before their listings will be removed from rental websites. The changes involving the number of short-term rentals on the same lot will go into effect Oct. 1.
The Austin City Council on Thursday approved a new set of rules that council members hope will crack down on unlicensed short-term rentals, something they have been trying to do for years.
“This has been a thorny and difficult issue, and has been through many different lawsuits and permutations,” said Council Member Chito Vela. “And I feel like we are finally getting to a point where we have a workable and enforceable STR ordinance that will be able to stand up to legal challenges and generate the hotel occupancy tax that we have been trying to get into the city coffers."
The new rules will require host sites, like Airbnb and Vrbo, to put the city-issued license number in the advertisement. The host sites will also be required to remove unlicensed listings at the city’s request.
“We want to bring the STRs' platforms into the process of helping us effectively enforce our licensing requirements,” said Daniel Word, the assistant director with Austin’s Development Services Department, which oversees short-term rentals.
Word said the goal is also for the city to more quickly address nuisance concerns, like noise.
“Licensed STR locations tend to operate better and more peacefully with the neighborhoods than unlicensed locations,” Word said. “So part of the idea here is if we are able to get to a better place in terms of compliance with our licensing requirements, that might naturally cause better compliance with some other ordinances.”
He said that will also allow the city’s enforcement to focus on nuisance issues rather than chasing unlicensed properties.
There are more than 2,400 active short-term rental licenses in Austin, according to city data. But data from AirDNA, which collects listings from companies like Airbnb, reports there are nearly 15,000 active listings in the Austin area.
Obtaining a license can be cumbersome and expensive. Council Member Ryan Alter wants to change that.
“We have so many people who operate without a license, and a big reason for that is that our license is incredibly expensive," Alter said. "Someone upfront has to pay almost $800, and if they are only doing that, let's say, for a weekend, it doesn't make financial sense for them to do that.”
He said the application process is also not easy. City staff will take the next few months to find a new fee schedule and simplify the application. They will come back to the council for approval.
The changes also mean people who own three homes on the same lot will be able to operate up to two as short-term rentals. For sites with more than four units, the owner cannot run more than 25% of the units as rentals.
Alter said with the changes to the land development code, which now allows up to three homes on a lot, the City Council wanted to ensure homeowners could rent out those additional units on a short-term basis.
"It is important that we recognize that a lot of people do use short-term rentals as supplemental income so that they can afford to stay here and live here," Alter said. "If that is what they need to be able to afford to live here, I wanted to be sure that was a tool they had available."
Renters will also now be able to obtain a license under the new changes if they have permission from their landlord.
Even with the changes, Council Member Marc Duchen worries bad actors could make comprehensive enforcement difficult.
"As we move forward, I think it's going to be important that we are very attentive and nimble in this space, particularly from a technology standpoint," Duchen said. "And from an enforcement standpoint, monitoring who maybe gets delisted but finds some other way to get advertising out there.”
Thursday's vote comes after the city in February decided to postpone a decision on several new rules that would have made it more difficult for people to continue renting their homes without a license.
However, the City Council did change how Austin collects taxes from short-term rental owners.
Property owners who rent out their homes for periods of less than 30 consecutive days at a time have to pay a hotel occupancy tax. Owners usually pay these taxes directly to the city.
In April, Austin started requiring short-term rental websites to collect these taxes and send the money to the city. Airbnb has similar agreements with dozens of cities throughout the country, including Houston and San Antonio.
City officials said existing short-term rentals with a license can continue to operate so long as they don’t become a nuisance and ownership remains the same.
Austinites with short-term rentals that don't have licenses will have until July to get them before their listings will be removed from rental websites. The changes involving the number of short-term rentals on the same lot will go into effect Oct. 1.