AUSTIN (KXAN) — It’s a story KXAN has done every year during Austin City Limits Music Festival for years. As thousands flood our city for the event, many are staying in unlicensed short-term rentals (think Airbnb or VRBO).
But this year, the city has new rules it hopes will help curb that issue moving forward.
Earlier this year, the city council approved the following:
- Short-term rentals (STRs) will be largely regulated through the city’s business code instead of its land development code (that goes into effect next month, Oct. 1)
- STR platforms are now required to collect Hotel Occupancy Tax (that went into effect April 1, 2025)
And just last month, they made additional changes:
- For anyone owning more than one property with short-term rental(s) on it, the properties will need to be at least 1,000 feet apart
- For a site with more than four units, like an apartment complex, “the greater of one unit or 10 percent of the housing units the person owns can be operated as short-term rentals”
- On a site with four or more housing units that also has a commercial use, that percentage bumps to 25%
- Host sites must put the city STR license number in their advertisement
- Those host platforms will be told to “de-list” advertisements at the request of the city, and they cannot collect fees from STRs that do not have the appropriate city license
“We appreciate the City’s thoughtfulness and collaboration throughout the process of streamlining their short-term rental ordinance. We support balanced regulations that maintain the City’s ability to curb bad actors while allowing VRBO hosts to continue their important contributions to Austin’s tourism economy,” said Jaclyn Terwey, Regional Government Affairs Manager for Expedia Group, which operates VRBO, said.
Meanwhile, Airbnb pointed to the benefits of short-term rentals for both the economy, the city and for hosts who have used the service to make extra income. Data from the company last year shows nearly half of Austin Airbnb hosts rented out their primary residence to make extra money — many of those people told Airbnb it helped them stay in that home.
The company also pointed to the benefits for the city, including the new collection of Hotel Occupancy Tax. According to city data Airbnb shared with KXAN, Austin collected more than $5 million in HOT from short-term rentals from April to July, the first few months of that change.
But some Austinites who have dealt with nuisance short-term rentals wished the city would have gone further. Abby Urnovitz is one of those people who said she wishes the 1,000-foot rule would apply universally and not just to a single owner, which would space short-term rentals out regardless of the owner.
“Other cities adopt geographic caps or spacing rules for overconcentration and we do not do that,” Urnovitz said.
Council Member Marc Duchen tried to bring forward an amendment last month that would have created a density cap based on census tracts. That amendment failed after some council members worried about the legality of Duchen’s proposal and the potential unfair advantage to some neighbors over others.
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