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Getting short-term rental rules right

On Behalf of | Oct 26, 2018 | Municipal Law |

Need a ride? Pull up your Uber or Lyft app? Need a short-hop vehicle to get you from your office to the nearest mass transit? Look for a shared electric scooter. Add to these forms of online business the applications that support short-term home rentals through outlets like Airbnb and VRBO.

These types of enterprises have proved to be a source of regulatory headaches for cities in recent years. As new businesses come online, the proliferation represents a potential migraine. How should planners and lawmakers respond? If news headlines and legal decisions are any indication, the answer requires judicious study.

On the mobility front

Cities across the country are now finding themselves the roosts for flocks of shareable e-scooters. Dallas and some of its environs are not immune. The new vehicles appeared earlier this summer in the wake of a regulatory move that drove bike rental companies out. Was that what city leaders intended?

On the home front

The short-term rental of homes is a bit more challenging. Readers may be aware of a Texas Supreme Court ruling several months back in this regard. The case pitting a homeowner and the owners’ association against each other centered on the question of what constitutes residential and commercial use of a property. By extension it has implications for local governments seeking to regulate similar activity.

The owners’ association in this case sought to curb the homeowner’s short-term rentals by arguing that the transactions amounted to a business and violated a covenant requirement that property be used for residential purposes only. But the Supreme Court said renters’ use of the property is residential use and that the owner was within his rights.

Obviously, this puts the onus on regulators to proceed sensibly when considering and adopting policies on short-term rentals.

Some argue San Antonio may serve as an example. In one recent action, the city council advanced a proposed set of rules that would include:

  • Requiring landlords to register with the city.
  • Charging landlords a fee and hotel occupancy taxes.
  • Restricting the number of short-term rental homes that can be in a particular area.

Some experts also offer that cities need to anticipate what added challenges this new line of business presents in terms of educating potential participants and ensuring that properties comply with existing codes.



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