Short-Term Rental Housing - Policy & Tax Collection

1. SHORT-TERM
RENTAL HOUSING:
POLICY & TAX COLLECTION
JANUARY 23, 2020

2. • August 8, 2019: Presentation to City Council on Airbnb, short-term rentals
• Fall 2019: Benchmarking research – policy and implementation
• November 18, 2019: Short-term rental stakeholder meeting
• Lubbock
• Galveston
• San Marcos
• New Braunfels
• Waco
BENCHMARK CITIES
SUMMARY OF ACTIVITIES

3. MUNICIPAL REGULATION
Defining a STR
Enforcing a STR
Registering/
Permitting a STR
Zoning
Proper
Permitting
Taxation of STRs
Enforceability
Health & Safety

4. HOTEL OCCUPANCY TAX COLLECTION
• Under the Texas Tax Code, the following are considered “hotels” and required to
collect HOT:
“Any building or buildings in which members of the public obtain sleeping
accommodations for consideration” for less than 30 days, including a hotel,
motel, tourist home, tourist house, tourist court, lodging house, inn, rooming
house, or bed and breakfast facilities.
Additionally, a “short-term rental,” defined as the rental of all or part of a
residential property to a person who is not a permanent resident, is subject to
hotel occupancy taxes.
Tex. Tax Code § 156.001 (c)

5. BENCHMARK CITY PROFILES

6.  LUBBOCK
• STR: any type of residential structure
o Owner- or renter-occupied
o No “social gatherings”
• Registration/Permit Fee: $100
o Annual renewals w/ $100 fee
o Requires owner/operator/agent to collect and remit HOT
• Tax collection/Enforcement
o Partnering with LODGINGRevs
o Portal on City website for permitting; will also assist with collecting HOT

7.  GALVESTON
• STR: a residential dwelling unit or
accessory building
• Registration/Permit Fee: $50
o No annual renewals
o Requires owner/operator/agent to
collect and remit HOT
o Neighborhoods may limit # of STRs
(75%)
• Tax collection/Enforcement
o Reviewing vendors
• Other requirements
o Tenant brochure
o Limit # of cars
o Must comply with local regulations
concerning noise, public nuisances
o $25 late fee for untimely tax filings

8.  SAN MARCOS
• STR: units in single-family neighborhoods
o Must be owner-occupied
o No registrant can operate more than 1 STR
o No party houses
• Registration/Permit Fee: $50
o Annual renewals w/ $50 fee
o Requires owner/operator/agent to collect and
remit HOT
• Tax collection/enforcement
o Partnering with Host Compliance to identify
hosts STRs that aren’t registered
o Considering VCA with Airbnb
• Other requirements
o No more than 2 adults guests per bedroom, plus
no more than 2 additional adults
o Applicant must certify unit has working smoke
detector and carbon monoxide detector per
bedroom; and fire extinguisher
o Tenant brochure

9.  NEW BRAUNFELS
• STR: 1- or 2- family dwelling
o Does not apply to B&Bs, hotels, motels, resort
properties/condos
– Though it will be changing to include any rental
less than 30 days, excluding hotels
o Prohibited in residential zoning districts
(requires zoning change, special permit)
• Registration/Permit Fee: $200
o Annual renewals w/ $125 fee (plus inspection)
o Requires owner/operator/agent to collect and
remit HOT
• Tax collection/Enforcement
o Partnering with LODGINGRevs for permitting
and tax collection
o Formerly worked with Host Compliance
• Other requirements
o No more than 2 adults guests per sleeping area,
plus 4 additional adults  will be changing,
however
o Parking: minimum 1 off-street parking space,
not including garage, per sleeping area;
maximum = # of sleeping areas plus 1
o Life safety inspection: fire extinguisher,
emergency escape, evacuation plan
o Floor plan & parking narrative
o Tenant brochure
o STR decal

10.  WACO
• STR: 5 categories of STRs
o Some require zoning change, special permits
o Social events only permitted in commercial
zoning districts
o No STR II can be within 500 feet of another in
certain zoning districts
• Registration/Permit Fee: $150
o Annual renewals w/ $50 fee (plus inspection-
$75)
o Requires owner/operator/agent to collect and
remit HOT
• Tax collection/Enforcement
o Partnering with LODGINGRevs for permitting
and tax collection
• Other requirements
o No more than 2 adults guests per sleeping area,
plus 2 additional adults
– No more than 4 unrelated in residential zoning
districts
o Parking: minimum 1 off-street parking space
per room; on-street parking prohibited
o Life safety inspection: smoke detector,
emergency escape, evacuation plan
o Site plan
o Marketing requirements

11. OTHER CONSIDERATIONS
• Recent court decisions
o Texas Supreme Court: Tarr v. Timberwood Park Owners Association, Inc.
– opinion delivered 5/25/2018
– Residential versus commercial use
o Texas Court of Appeals, 3rd District (Austin): Zaatari v. City of Austin
– opinion delivered 11/27/2019
– Struck down portions of City of Austin’s short-term rental ordinance:
 Provision phasing out certain types of STR’s
 Provision limiting certain conduct and assembly at STR properties
• Possible State legislation in 2021
• Agreements with online platforms: Airbnb and HomeAway

12. STAKEHOLDER FEEDBACK
• 67 attendees
• Presentation, small group discussions, and STR questionnaire
o Questionnaire: 1) defining/regulating/enforcing STRs; 2) primary concerns; and 3)
pros/cons of example ordinances
• Summary of Responses
o Generally supportive of regulating STRs
o Support: local contact, educational materials, life safety, annual certification, tax
compliance
o Oppose: restricting social gatherings/parties
• 133 open-ended comments

13. STAFF RECOMMENDATION
STR Ordinance
• Allow for STR’s
• STR Registration
• Enforcement of
ancillary effects
HOT Collection
• Consider
agreements with
online platforms
• Ensure collection
and remittance
Evaluate
• Registration
• HOT Revenue