New Short-Term Rental Rules in Austin Explained

The Big Change: New Rules for Short-Term Rentals

Austin's skyline isn't the only thing growing. The city is planning big changes for short-term rentals (STRs) which could impact luxury home buyers and sellers. If you're considering buying or selling a rental home in Austin, understanding these new rules is essential. Here's a simple breakdown of what's happening and how it affects you.

What's Happening?

Austin officials want to change how STRs work in the city. They are planning these changes to manage how STRs operate and make sure they collect the Hotel Occupancy Tax. Currently, there are about 10,000 STRs in Austin. These changes will be discussed starting February 4, 2025.

Key Changes to Know

Here's a look at the proposed changes:

1. STR Classification: Short-term rentals will now be classified under accessory use for all residential zoning districts for those who have a license.

2. Density Caps: There will be limits on how many STRs one person can own. For buildings with three or fewer units, an owner can only have one STR in a 1,000-foot radius. For buildings with four or more units, owners can only use one unit or 25% of the units as STRs.

3. Tax Collection Responsibility: Airbnb and similar platforms must calculate and send in the Hotel Occupancy Tax for each stay.

Why the Changes?

The city wants to tackle problems like noise and parking issues caused by STRs. Past attempts to make rules for STRs were challenged and sometimes thrown out in court, making it tough for any rules to stick.

The Buyer and Seller Challenge

These new rules might make buying or selling a luxury home in Austin tricky. Here’s how:

1. For Buyers: If you’re looking to buy and plan to use your property as an STR, you'll have more hurdles to jump. You’ll need a valid license, and you'll be competing with more people due to the limits on ownership.

2. For Sellers: Selling might take longer, especially if your home is marketed as a potential STR. The new rules might deter some investors who are interested in buying properties for short-term rentals.

Tips for Navigating the Market

For Buyers

1. Research and Preparation: Before you buy, research if the property fits the new STR guidelines. Look for properties that qualify for STR licenses.

2. Long-Term Focus: Consider properties that have appeal beyond just being a short-term rental. Look at the long-term value and benefits of owning the home.

3. Connect with Experts: Work with real estate agents who understand these new rules. They can guide you on what type of property will meet the criteria and how it aligns with your goals.

For Sellers

1. Highlight Unique Features: Showcase what makes your property great even without STR potential. Unique architecture, historical value, and indoor or outdoor amenities can be significant selling points.

2. Update Marketing Strategies: Adapt your marketing to appeal to buyers looking for primary residences or those interested in longer-term rentals.

3. Consult with Professionals: Agents specializing in luxury sales in Austin can help navigate changing demands and suggest strategies for dealing with difficult buyers.

In the Courts: Understanding the Legal Battle

The court case of ROBERT ANDING AND ROBERTA ANDING vs. THE CITY OF AUSTIN set the stage for these new rules. The Andings argued against a rule requiring property owners to live on-site to rent homes short-term. The court sided with the Andings, saying that this requirement was unconstitutional. This ruling contributes to the need for new guidelines today.

Get Involved: How to Make Your Voice Heard

As these changes approach, the City of Austin is welcoming feedback from people like you. Public meetings and input opportunities are open for everyone. You can attend meetings in person or online throughout January and February 2025. The City wants to hear from Austin residents about how these rules will impact their lives.

If you want to join the conversation, visit publicinput.com/DSDNotice. Here, you can share your thoughts and see what others are saying about the upcoming changes.

Conclusion: Look Ahead with Confidence

The changes to Austin’s STR rules may feel overwhelming, but they also present an opportunity to understand the market better. By knowing the rules well, buyers and sellers can still succeed. Stay informed, use the resources available, and don’t hesitate to ask questions. The Austin home market can continue to thrive with careful planning and strategy.

Information for this blog was sourced from Austin Monitor, austintexas.gov, Five Star, & Austin-American Statesman