About one in 12 Galveston housing units is registered as a short-term rental, according to an analysis by The Daily News.
In Galveston, about 2,800 properties are registered as short-term rentals, according to the Park Board of Trustees, which manages the rental registry and collects occupancy taxes.
New rules governing short-term rentals passed three years ago amid controversy from neighbors concerned about increased traffic and party houses. But the state could again attempt to ban cities from regulating short-term rentals after a similar bill failed in the last legislative session.
In the three years since the city began requiring short-term rental units to be registered with the park board, the inventory has grown by 613, park board spokeswoman Mary Beth Bassett said.
There were about 32,000 housing units in Galveston, based on the five-year average of data collected in surveys between 2012 and 2016, according to the latest U.S. Census Bureau numbers.
The park board took responsibility of short-term rental registrations and hotel occupancy tax collections in March 2015, Bassett said. The rules passed in 2015 required property owners who use the properties as a vacation rental to register, which made it easier to know who to collect hotel occupancy taxes from. Registrations are renewed annually.
Properties could have owners living in them and also be registered as a short-term rental. On Airbnb, the average nightly rate for a rental was $215 in Galveston.
About 15 years ago, most of the short-term properties were concentrated on the West End as beach vacation rentals. But that’s changed during the past decade, said Dawn Wilson, who owns a historic home near 19th Street and Avenue L, which she operates as a short-term rental.
“It was not a very prominent spot back then, but now people want to rent old houses,” Wilson said. “That’s changed, and that’s why there’s so many homes in city proper now.”
Once solely the realm of real estate companies that rented vacation properties, the short-term rental industry has seen large growth with the emergence of the so-called sharing economy. Businesses such as Airbnb, Trip Advisor and HomeAway allow owners to rent their properties directly to vacationers.
Mary Branum owns a house near Avenue S and 35th Street that she has rented to vacationers for about 15 years. Branum is president of the Short Term Rental Owners Association of Texas, which has about 60 members, she said.
The rentals stay booked most nights, Wilson and Branum said. Branum estimated her annual occupancy hovered between 75 percent and 80 percent, she said.
Both operators had many repeat visitors, particularly among the “winter Texans” crowd, they said.
The rentals brought in between $3.2 million and $4 million in hotel occupancy taxes in 2017, according to the park board. Across the island, hoteliers, bed and breakfast operators and vacation rental property owners collected $16.17 million.
The park board estimated the short-term rentals accounted for about 20 percent to 25 percent of all hotel occupancy taxes collected. In 2017, about 7 million tourists visited the island, a record since the island started tracking visitors, according to the park board.
Branum attributed the uptick to visitors — and rental bookings — in part to better marketing of Galveston, she said. Operating a vacation rental, too, meant boosting Galveston by word-of-mouth and trying to entice new and returning visitors, Branum said.
“I’m fortunate to meet people from all over the world, and that’s rewarding and enjoyable,” Branum said. “Those of us that are in the vacation rental business don’t just do it for yourself, you really are an ambassador.”
Some neighbors have opposed short-term rentals, arguing they create a nuisance in neighborhoods. As the city council debated the short-term rental ordinances, the properties drew criticism from people who didn’t like the increased traffic in neighborhoods and argued it would change the character of communities.
Wilson thought the criticism of the vacation rentals was unfair, she said.
“They have an undeserved reputation of being party houses,” Wilson said. “Most owners don’t want party houses. They’ve invested a lot of time and money in their homes and they want to keep them up.”
A North Texas Republican in 2017 proposed a bill in the Texas Legislature that would bar cities from restricting or regulating short-term rentals. The bill ultimately failed.
The local short-term rental association had opposed the rule being considered by lawmakers, Branum said. Galveston’s ordinance has been a model for other cities looking at how to regulate short-term rentals reasonably, she said.
Branum had talked with representatives from Daytona Beach and Laguna Beach, among other places, about the Galveston’s ordinance as they’re considering similar rules, she said.