The state’s Supreme Court added a new wrinkle to debate about how, even whether, short-term rentals can be regulated.
After Kenneth Tarr’s employer transferred him from San Antonio to Houston, he began renting his house on a short-term basis. His San Antonio homeowners’ association said the practice violated deed restrictions, which said the house had to be used “solely for residential purposes.”
In a unanimous decision last month, the court sided with Tarr.
“So long as the occupants to whom Tarr rents his single-family residence use the home for a ‘residential purpose,’ no matter how short-lived, neither their on-property use nor Tarr’s off-property use violates the restrictive covenants in the Timberwood deeds,” Justice Jeff Brown wrote for a unanimous court, according to a Texas Tribune report.
In addition to deed restrictions, about a dozen cities, including Galveston, have local ordinances on short-term rentals in place.
Although last month’s ruling didn’t address those ordinances, the strong attention it gave to property rights and the court’s unanimous support for it could bolster the case of a group of short-term rental operators and guests who have sued the city of Austin.
It could also bolster an expected push in the upcoming legislative session to strip local control from communities in determining the best ways to manage short-term rentals.
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, but had support in spirit among some of the state’s top leaders, including Gov. Greg Abbott.
We opposed the bill as did the local short-term rental association. We have consistently supported a local government’s right to reasonably regulate short-term rentals, much in the same way it is reasonable to regulate everything from building codes to animal control.
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.
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 in a Daily News story last month.
The rules passed in 2015 required owners who operate properties as short-term vacation rentals to register, which made it easier to know who to collect hotel occupancy taxes from. Registrations are renewed annually.
The ordinance also requires the owners to name a contact and to have that person available to deal with problems at short-term rental properties.
We think those rules are reasonable.
But the recent Supreme Court decision, combined with a decision on the lawsuit against Austin and what the next legislative session might bring, could end even reasonable local short-term rental regulations.
• Dave Mathews