Houston soon may require short-term rental owners to register their properties with the city, prove payment of their hotel occupancy tax and keep sizable liability insurance policies that companies say could be cost-prohibitive.
Cities around the country in recent years have changed their requirements for homes or rooms rented for fewer than 30 consecutive days. As the only major city without zoning laws, the proposal is one of the first significant steps Houston has taken toward short-term rental regulation.
Property owners who run rentals with companies, such as Airbnb or Vrbo, will have to follow a slew of new rules to keep their registrations under a proposal that was presented to a City Council committee Monday. Among the proposed regulations: identification of an emergency contact who can be at the site within one hour of notification, compliance with Houston’s noise ordinance, and a $1 million liability insurance policy to benefit tenants injured at the properties.
Read the proposed regulations here
City Council has fielded questions in recent months during the public comment portion of its meetings about the spread of short-term rentals that residents complain create excessive noise, worsen neighborhood parking or promote unsafe environments.
Council repeatedly has called for patience as the Administration and Regulatory Affairs Department finalize the regulations, which they think will affect an estimated 8,500 short-term rentals in the city.
Short-term rental owners already follow parts of the Texas hotel code, such as payment of the hotel occupancy tax, but the Houston proposal will require owners to prove payment in order to maintain operation.
A Nov. 7 Airbnb report estimated the residences brought in $400 million in total tax revenue for Houston, including $8.5 million in local hotel occupancy taxes which Airbnb arranges for owners registered on its site.
Unlike other cities where rental regulations have been struck down by the courts, the Houston proposal does not dictate how owners or renters can use the property, such as restricting the types of gatherings that can take place or number of people present.
Instead, the Houston guidelines enshrine current rules, including the city’s noise and litter ordinances, while adding more hoops on the front end of operation when registering.
A spokesperson for Airbnb, one of the stakeholder companies the city surveyed about the proposal, said the company would work with the city to educate owners about reasonable regulations. The company’s survey responses included concerns about some of the policies it believed could limit a person’s ability to operate a short-term rental business.
The permit application should be entirely online, simple and have a response within a reasonable time limit, the company said. Airbnb also said the high insurance policy would be restrictive and asked the city to recognize that a property listed on the Airbnb website automatically meant the company paid the hotel occupancy tax for the owner.
Landlords surveyed by the city agreed with many of Airbnb’s concerns. They added the idea of revoking an owner’s permit because of a tenants’ activities that owners “cannot possibly know about is wrong.”
Share your thoughts on the changes with the city here
Tina Paez, the Administration and Regulatory Affairs director, said the department would reach out to all known short-term rental addresses if City Council approves the changes. Paez said she expected a participation rate of around 50 percent, and a six-month registration period following council approval.
Violations of any part of the new ordinance would be punishable by a fee between $100 and $500 for every day the violation continues. Each day it continues will be considered a separate violation.
Resident feedback largely has been positive, according to the city’s presentation, with 58 percent of the responses supporting the proposed regulations.
Some responses suggested the city go further, including a prohibition on a renter’s use of on-street parking or a ban on short-term rentals altogether. Others suggested waiving the application fees for owners who have not had any reported issues at their properties.
At-large Councilmember Julian Ramirez said Monday that any solution would be a compromise: short-term rentals cannot be completely banned, but they also will not continue as they do now.
“I encourage everyone to set your expectations realistically,” Ramirez said. “This is a contentious issue with compelling interests and arguments on both sides.”
The Administration and Regulatory Affairs Department will continue accepting public opinions and editing the proposal until it is taken to council next year.
Any changes for homeowners would not be implemented until 180 days after City Council approval.
Republish our articles for free, online or in print.
