DNA News: May-June 2022

Party Houses In The Neighorhood: What to Do

Short term rentals (STRs) in Austin have been a problem for a more than a decade and Dawson, as a centeral neighborhood, has its share.

Austin city code defines two three types of single-family STR: type 1, type 2 non-commercial, and type 2 commercial. Type 1 rentals are for renting out part of your house and require that the owner be present when renters are present. Type 2 are whole-house rentals. Commercial type 2 require a commercial zoning. Rental periods must be for no more than 30 days.

Whether licensed or unlicensed, most short term rental properties do their best to be good neighbors. But lately there is a trend of companies buying properties and explicitly offering them as party houses.

One such company is UrbanStay (https://urbanstay.us), which has bought a number of properties on the East Side and Rainey Street neighborhoods. They list their properties on their web site as well as on Airbnb and other sites. These properties are explicitly advertised for parties. This is from an Airbnb listing for a Rainey Street property (italics mine):

Stumble on home to this aesthetic modern build with plenty of room to relax or rally, both indoors and out. Need even more space? Have too many friends? Are you just that popular? We also manage the house next door, so consider booking them together. And consider inviting me to your bachelorette party, birthday, or weekend with the boys because it sounds like it’s gonna be a great time!

Austin STR regulations prevent having a type 2 rental within 1000 feet of another type 2 property, so having two such properties next to each other is a clear violation of that regulation. Airbnb’s rules prohibit parties on their properties. So this listing is suspect at best.

Doing a search on Airbnb for properties in Austin for August returns three UrbanStay properties as the top results.

Searching the City of Austin short-term rental database for type 2 properties in Dawson (based on the street and block of the property—the database doesn’t list exact addresses for privacy reasons), I find three properties. A search on Airbnb for whole-house listings in August shows 12 listings.

Austin stopped issuing type 2 licenses for non-commercial properties a number of years ago. So except for the three I found in the database, any whole-house rental that is not an owner-occupied home must be in violation of city ordinance (25-2-788, Type 1, and 25-2-789, Type 2). (It’s not immediately clear from the ordinance if living in the house but vacating it occasionally to rent it entirely requires a type 2 license.)

Note that Austin is no longer allowed to enforce occupancy limits due to a court decision (https://www.austintexas.gov/article/things-know-about-texas-third-court-appeals-ruling-and-short-term-rentals). The ordinance limits occupancy to ten people who are not related but without the ability to enforce that there’s nothing preventing even licensed type 2 rentals from packing in as many people as are willing to sleep on the floor.

If you have a party house near you, what can you do?

• Complain to 311 and keep complaining. Enforcement is complaint based and it may take many complaints to get action. Include pictures. If there’s noise, take video.
• If the property is listed on Airbnb or VRBO, complain to their community support teams: https://www.airbnb.com/neighbors, https://www.stayneighborly.com/ (VRBO).
• Find the property on TCAD and see if it has a homestead exemption. If it does and it is clearly not owner occupied that is a tax violation that can be reported to the Texas Comptroller (https://comptroller.texas.gov/programs/support/investigation/reporting.php). It’s one thing to flaunt the city STR rules, quite another to not pay your fair share of taxes.

While Airbnb listings do not include an exact address, most listings are fairly easy to identify to a specific house, especially if they include pictures of the exterior. Using google maps and street view or just walking the neighborhood you should be able to determine the exact address. With that information you can use TCAD to find the owner and determine if:

• They are claiming a homestead exemption
• Are an individual or a company—many investment properties are owned by LLCs

As neighbors we have to decide how much to tolerate whole-house short-term rentals, especially those that are good neighbors and respond quickly to issues on their properties. No recently-created whole-house STR can comply with Austin code because Austin stopped issuing type 2 licenses some years ago.

But party houses are not good neighbors. As a neighborhood, Dawson doesn’t have that many properties that would make good party houses but you never know what might get built next month….