by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Fresh after chasing away Uber, the ride-sharing business, as a sop to the politically powerful cartel that runs the city’s taxi business, Democrat-dominated Austin went after Airbnb users and other short-term rental entrepreneurs. They passed an ordinance explicitly designed to shut down many of those businesses, one that included truly outrageous and invasive measures. Short-term rentals (STRs) that are not owner-occupied will be outlawed entirely by 2022. If two couples are sharing a two-bedroom vacation rental and they want to invite four people over to a dinner party, they’re breaking the law if dessert and coffee goes past 10 p.m., no matter if it is served in complete silence. Renting a vacation home on two acres and planning a cookout for seven people on a Sunday afternoon? That’s against the law, too. Want to rent out your ten-bedroom, 5,500-square-foot spread to a visiting delegation of twelve representatives of the Women’s Republican Club coming to visit the state capital for a week? Nope. Got a problem with the city springing an unannounced inspection on you at 2 a.m. with no cause or complaint? Too bad.
Property-owners are held responsible for any violations, which would be totally reasonable — if the rules were reasonable, too.
You may be shocked to hear it, but Austin, which is home to something like 100,000 college students in total (UT alone has 51,000 students, 40,000 of them undergraduates), also has a lot of rental arrangements that are not entirely on the up-and-up. It is a city that gets a great many visitors for events such as South By Southwest and happenings that attract lots of young people who do not necessarily have lots of money. The dirty hippie commune that once was home to yours truly was part of a student-owned co-op that made extra money renting spare rooms during spring break and summer vacations, thereby subsidizing the cost of our educations. As I recall, things got a little loud from time to time.
Austin has noise ordinances, and many of those now under the thumb of heavy new STR regulations complain that they often go unenforced, meaning that there’s relatively little downside to being a bad STR landlord — if you are unlicensed. And most of the complaints that preceded the new regulations had to do with unlicensed STRs. Airbnb landlords are licensed, and both landlords and renters are constrained by the app’s reputation system. If you’re an unruly renter, you get a low rating from your landlord, and others will not rent to you; if you’re a problem landlord, you get a low rating from your renters, and lose business. It’s a self-policing system that in practice works reasonably well.