A state appeals court ruled Nov. 27 that the city's regulations banning some types of short-term rentals and restricting their use are unconstitutional. In 2016, Austin City Council passed an ordinance to outlaw by 2022 short-term rentals in residential areas where the owner doesn't live on the property. The ordinance also created requirements around advertising, noise, inspections and occupancy limits at the rentals. The state appeals court has declared some elements of Austin's rules governing short-term rentals unconstitutional, including provisions banning non-owner-occupied rentals and occupancy limits.
In 2016, the City Council passed sweeping new regulations of short-term rentals, like those you find through Airbnb or Homeaway. The rules included a phased-in ban on what are called "type 2 STRs" which those that are not occupied by the owner. That ban would be in place by 2022. The court said a ban on type 2 STRs would not prevent any of the concerns the city cited, and that many of those concerns – about disorderly conduct, public urination and noise – were already prohibited by the law.
The city's ordinance also limited occupancy to two adults per bedroom and banned "assembly" like weddings, bachelor/bachelorette parties and other group events between 10 p.m. and 7 a.m. In the court's opinion overturning those provisions, justices wrote "the ordinance provision banning non-homestead short-term rentals significantly affects property owners’ substantial interests in well-recognized property rights while ... serving a minimal, if any, public interest."
The court also wrote the rules on occupancy and party times "[infringe] on Texans’ fundamental right to assemble because it limits peaceable assembly on private property." District 9 Council Member Kathie Tovo, who was instrumental in getting the rules passed, said she was "extremely surprised and not pleasantly so."
"The council very rightly made a distinction between residential properties that are used by homeowners as short-term rentals for a very limited period each year and properties that are really serving a commercial purpose," she said. "And short-term rentals, [type] 2's, which the court was responding to, are commercial properties."