Can Austin get some more tax $ from Airbnb?

City Council is in a long-overdue process of reforming the regulation of short-term rentals. That's the technical term for units rented through platforms like Airbnb, Vrbo and whatnot.

STRs have certainly been a source of contention for the entire decade I've been covering City Hall. The main reason people get upset about them is that they can be a nuisance, but there are also some who worry (& probably others who pretend to worry) that they reduce the supply of housing, thereby driving up housing costs. During the debate over the HOME zoning reforms last year, opponents frequently alleged (baselessly) that it was a plot by Airbnb and that new homes created by the policy would simply be used as STRs.

City legal staff said at the time that the problems created by STRs really weren't an issue of zoning but an issue of permitting and enforcement.

The city has had STR regulations in place for years, but a number of them have been successfully challenged in court. The reality on the ground now is that the 2,195 licensed STRs operating in Austin are greatly outnumbered by unlicensed STRs. It's important to keep in mind that some STRs are not full-time rentals. People may rent out a room during SXSW or ACL etc.

The unlicensed STRs are not only harder to track and hold accountable for bad behavior, but the city is not collecting any hotel tax from them. We're missing out on many millions per year. (The fact that we have to blow 70% of any hotel tax on a new Convention Center is a separate travesty)

Forcing compliance

City staff have drawn up some proposed new regulations that aim to comply with the recent court orders. But it's not entirely clear if the ordinance itself is likely to force unlicensed STRs to get licenses and pay taxes.