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.

Contact reporter John Wayne Ferguson at 409-683-5226 or john.ferguson@galvnews.com. Follow him on Twitter, @johnwferguson.

(10) comments

RonShelby
Ron Shelby

One benefit of capping rentals like Austin is that it can help to keep a "lid" on the rise in local values by deterring some purchases when the cap has been reached. That type of policy helps to work towards the goal of keeping local housing more affordable.

Mary Branum

This Bill would take away the authority for regulation of all cities, which has worked very well for Galveston. I see no purpose of this Bill other than creating enormous problems for residents and cities including with lack of oversight. How will the State monitor whether a property is legal and paying Hotel Operating Taxes? Who will monitor any issues that could arise? This would be a disaster for all.

Capping the number of rental properties will not put a "lid" on values unless one believes run down properties are good for a neighborhood. Yes, property values increase when owners take care of their property. I, for one, would rather have a well maintained property next door and across the street than the boarded up houses and trashy neighbors. I was under the impression that it is good for property values to increase as this means an improved neighborhood.

Michael Moriarty

"Neighborhoods" cannot exist where transients, changing every few days, occupy the properties! It's kind of like cancer, bad cells overtaking good cells. The transient rent houses drive out the "neighbors," ultimately killing any semblance of a neighborhood! Nothing like "family values!"

Michael Moriarty

I don't recall that regulation of land use in incorporated municipalities has ever been an interest of State government, yet this tramp from North Richland Hills, a burb of Fort Worth, would propose exert State right over local rights to determine land use. That smells like "big" government, not something Republicans generally cater to, I guess unless it serves to fill their pockets!

Tim Thompson

Interesting, considering that Republicans usually accuse Democrats of creating too many regulations. And I thought they were in favor of local autonomy and control, against control from "the State."

Diane Turski

I prefer that local communities regulate short term rentals! We had a problem with short term rentals where I lived previously - specifically, it was Air B&B short term rentals that continuously degraded our neighborhood. I will be contacting Larry Taylor, my state senator to oppose this bill. I suspect that Air B&B lobbyists are behind this bill.

Gary Scoggin

John Wayne Ferguson - Did you reach out to Mssrs. Taylor, Faircloth and Bonnen for their views on this bill since it has so much local impact? Any comment, or their reluctance to comment, is newsworthy.

Generally I think the GDN could do a much better job in getting our elected officials' views on these types of things.

Jay Arnold

My view also Gary. I have expressed this many times here with no apparent results. Maybe if enough of us keep voicing this they will get the message.

Diane Brodie

What is the bill #?

Mary Branum

SB451

Welcome to the discussion.

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