Short-Term Regs Getting Longer ... and Longer

Council split on regulating Type 2 STRs

Kathie Tovo

Based on Tuesday's special-called City Council meeting – which adjourned after about three hours of uncompleted discussion – Mayor Pro Tem Kathie Tovo would like to ban Type 2 (non-owner-occupied) short-term rentals (STRs) in residential neighborhoods as soon as possible, and Mayor Steve Adler is attempting to find a way to end abusive STR practices without ending the rental category altogether. The final outcome remains in doubt – although Council continues to work on the matter in resolution form, a codified ordinance for eventual approval won't be ready until at least November. In the meantime, Tovo's proposal that a yearlong moratorium on new Type 2 licenses (approved in principle last week) take effect immediately failed to garner majority support.

Adler argued that one purpose of the new regs would be to encourage currently unlicensed STRs to register and comply with city rules, and that argument appeared to carry the day. Likewise, Council rejected a motion to waive the standard Boards and Commissions review of the eventual draft ordinance, instead simply directing staff to bring back the ordinance as soon as possible.

Mayor Steve Adler opened Tuesday morning's meeting with a lengthy statement, proposing a new brace of regulations. They were intended, he said, to "capture 85 percent of the bad conduct we're trying to stop" (e.g., "bad actors" or party houses), and to "allow 85 percent of the good conduct" the city is trying to encourage. He made four proposals: a limit of six "unrelated" persons; a 10- or 12-person cap; a maximum of two people per bedroom plus two others; no "gatherings" of more than six people outside, with no outside activity at all after 10pm.

Whether those proposals are reasonably enforceable – and whether limiting "gatherings" is even constitutional – wasn't settled in the meeting. The mayor's proposals did suggest an attempt to find some more lenient ground, compared to what Tovo proposed, which would effectively ban Type 2 STRs in residential zoning. Her additional proposals (some of which were approved last week) include reducing the 25% cap on Type 3 STRs (non-owner-occupied apartment units or condos) to 3%; that was unresolved, partly for lack of time, although some Council members expressed interest. The remainder of Tovo's proposed amendments (posted on the Council message board) were postponed until the next available zoning meeting, Oct. 5.

Like much of the public, Council is divided on all these questions. Tovo and District 7 Council Member Leslie Pool are allied in strongly opposing what they call "commercial" STRs in residential areas; CMs Don Zimmerman and Ellen Troxclair say Coun­cil is overreaching, and should be focusing on the "party houses" that are disrupting particular neighborhoods. The rest of Council appears to be spread between those two positions, with Mayor Adler and CM Sheri Gallo particularly trying to find some middle ground that is yet to materialize.

As the discussions proceeded, Adler and several other CMs declared at one time or another, in Adler's words: "I'm getting concerned that this isn't cooked enough for us to be doing it on the dais." Nevertheless, they kept adding newly proposed rules, having thus far agreed (although seldom unanimously) to approve:

• stricter occupancy limits,

• mandatory inspections of various sorts,

• bans on events like parties or weddings,

• ending the "testing the waters" advertising provision,

• requiring hotel/motel taxes, and

• preventing "clustering" of Type 2 STRs.

The proposed one-year moratorium on licensing new Type 2s – at least until staff can take stock of how the new regs are working – is expected to take effect with the eventual ordinance.

Curiously, as CM Ann Kitchen pointed out, the moratorium on licensing new STRs, if it happens, means, "No one else can add to the number, which makes the fact that you have that license that much more valuable." There's already a waiting list in some neighborhoods for new Type 2s – which are capped at 3% of the houses in a given census tract – so it's possible that rental prices on existing STRs will continue to spike. Nobody knows if that will happen. Indeed, nobody seems to know much at all about the best way forward, but that hasn't stopped anyone, on and off the dais, from having extremely strong opinions about what needs to be done.

Everyone does seem to agree that the "party houses" – places rented out to large groups of visitors who proceed to disturb the neighbors' tranquility over long and recurrent weekends – need to be curbed, although how to accomplish that remains a central mystery. "Better enforcement" by the Code Department is the demand, and some of these regs (like a new administrative enforcement procedure) are intended to provide Code "the tools necessary" to corral the bad actors. Zimmerman proposed a new Austin Police Department Task Force on STRs, but APD Assistant Chief Brian Manley said late-night nuisance calls on the weekend are "Priority 4" – officers are heavily occupied elsewhere.

Tovo made it clear Thursday that her ultimate goal is not simply a moratorium and stricter regs. She asked instead for an "indefinite suspension" and an effective ban on "commercial" short-term rentals in residential neighborhoods. (Opponents want Type 2 STRs confined to areas zoned commercial – as are hotels – although when it legalized Type 2s three years ago, the city redefined STRs, like long-term rentals, as a residential use.) Tovo and others are convinced that STRs threaten to "hollow out" central city neighborhoods for families, by driving up prices yet further in areas where the cost of housing is already prohibitive. STR defenders, like the trade group the Austin Rental Alliance, claim there aren't enough STRs to have affected local housing prices.

The wheels are slowly turning on a new ordinance, but much remains in flux, and it's certain that Council – despite visible impatience on the dais – will be continuing to address the issue in subsequent meetings. Council members repeatedly emphasized that whatever emerges from this week's deliberations is only the next step in a lingering process. And whatever emerges is unlikely to settle the thoroughly polarized public debate.

In other actions last week, Council:

• Approved the Cemetery Master Plan of the Parks and Recreations Department

• Asked Austin Energy to draft a proposal to accelerate the acquisition of solar energy, in light of falling prices and federal credits scheduled to expire next year.

• Added the city manager, city auditor, the municipal court clerk, and the city clerk (Council direct reports) to the ranks of civilian city employees to receive the 3% across-the-board raise just approved with the FY 2016 budget.

• Approved for use by Mega­bus as a "transportation terminal" property at 15th and San Jacinto, over an appeal by nearby apartment owners.

• Over objections by Zimmerman, approved 10 to 1 a lease extension on Sixth Street for the Downtown Community Court (Zim­mer­man was hoping to exclude the Court from having occasional overflow meetings at City Hall – which have the effect, under state law, of banning firearms from the building, the ban being his actual target).

• Held a pro forma public hearing (at which nobody testified) on the already concluded maximum FY 2016 property tax rate – that was officially and finally approved Tuesday morning.

City Council's next meeting is scheduled for Thursday, Oct. 1. Short-term rentals do not appear on the draft agenda – but it's only a draft ...

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