A bill filed in the Texas Legislature would prohibit cities from making rules that restrict where short-term rental housing operates.
The bill was filed in January by State Sen. Kelly Hancock, a Republican from North Richland Hills.
If passed, cities or counties would not be able to “adopt or enforce a local law that expressly or effectively prohibited the use of a property as a short-term rental.”
Galveston, which has upward of 6 million visitors a year, has more than 2,100 registered short-term rentals, according to the Galveston Park Board of Trustees.
Short-term rentals are required to register with the city, ostensibly so their owners can be charged a hotel occupancy tax. The city’s rules also require that rental owners have an emergency contact person that can attend to the property within 24 hours, and require that renters obey nuisance rules.
Galveston’s restrictions are generally seen as friendly toward the rental industry. In 2016, the R Street Institute, a research firm that supports free market and limited-government causes, gave the city an A+ grade in a study of local restrictions on short-term rentals.
“Galveston boasts a friendly regulatory climate for short-term rentals, with minimally burdensome requirements for licensing, taxation and enforcement,” the firm wrote.
Other larger Texas cities, including Austin, Houston and Fort Worth, received lower grades in the study, because of their more restrictive policies. In Austin, for instance, the number of rental properties that can operate in the city is capped.
When passing its rules, Galveston did retain the ability to prohibit short-term rentals from certain parts of the island. The R-0 zoning district allows only single-family residential housing inside its boundaries.
Two Galveston neighborhoods, Cedar Lawn and Colony Park, received the zoning designation in 2015 when the city rewrote its zoning code because of worries from residents of those neighborhoods about loud, disruptive behavior coming from rental houses.
No other areas have been proposed as R-0 districts, although the city planning department, individual property owners or neighborhood groups could begin the process of rezoning certain areas.
Galveston leaders have taken an official position against legislation that prohibits local control issues, including short term rentals and ride-sharing services.
“We want to be able to maintain our local control,” said Terrilyn Tarlton-Shannon, Galveston’s mayor pro tem, who was instrumental in writing the city’s zoning ordinance for short-term rentals.
Shannon said that short-term rentals unquestionably benefit the island, but having some regulation allowed the city to preserve older neighborhoods that cater to the needs of families and residents.
“That’s been an avenue where we helped preserve neighborhoods,” Shannon said about Colony Park and Cedar Lawn.
The Galveston Park Board of Trustees, which has its own legislative agenda, called bills that remove local regulation of short-term rentals “concerning.”
The bill is Senate Bill 451. It has been referred to the Senate Committee on Business and Commerce.