Imagine that you’re a young couple who moved to Austin to pursue a better life. You do the right things: You get married, you get jobs, and you work hard. Eventually, you have a child. The expenses start to mount up, and you look for ways to make ends meet.
That’s why you decide to invest in a property to rent as an additional source of income. After doing your homework, you discover that short-term rentals can generate more revenue than long-term rental use of the same property. So you apply for and receive a Type 2 Short-Term Rental (STR) license from the City of Austin in December 2015.
But soon after, you discover that you won’t be able to rely on the additional income for long. In February 2016, the Austin City Council voted to pass a tough new law phasing out your existing license. Further, it inappropriately stomps on your tenants’ freedoms.
For example, the ordinance outlaws outdoor assemblies of seven or more people between 7 AM and 10 PM. It bans indoor gatherings of more than ten people, no matter how much space there is inside. It mandates only two adults per bedroom between 10 PM and 7 AM, and while in their bedrooms during those hours it prohibits any group activities “other than sleeping,” begging the question: what exactly is the city trying to regulate here?
Even worse are the city’s new enforcement powers. Code officials now have the authority to search residential properties without a warrant to spot possible code violations. Imagine: A code official shows up at your property at 11 PM, demanding to make sure there are only 2 adults per bedroom, and that no group activities “other than sleeping” are taking place. All without a warrant.
We are all guaranteed certain basic rights by the U.S. and Texas Constitutions. Among these are the freedoms of assembly and movement, the right to privacy, economic liberty, equal protection under the law, and protection from unreasonable search and seizure. These freedoms are the secure foundation on which we build our lives, and they are so fundamental that not even our elected representatives can take them away from us. Or at least they shouldn’t be able to, as Austin’s ordinance threatens to do.
The grossly unconstitutional nature of Austin’s short-term rental ordinance is a big reason why the Texas Public Policy Foundation filed suit in Travis County District Court against the City of Austin recently. This sort of local government overreach cannot go unchallenged. That’s especially true when the reasons for this ordinance seem so weak. According to the City’s own internal information-gathering, less than 10% of code complaints regarding STR’s mentioned over-crowding or noise issues, and a majority of those complaints didn’t even concern Type 2 STR’s. Are these facts compelling enough to trade in our fundamental freedoms? Of course not.
The Foundation’s fight for local liberty is important for another reason too—because what happens in Austin, doesn’t stay in Austin. City governments in Central Texas and beyond oftentimes look to Austin for model policies, like those dealing with short-term regulations. If the city’s STR regulations aren’t stopped here and now, then other cities are sure to adopt a very similar approach, putting at risk the freedoms of even more hard-working Texans.
In January 2016, Forbes declared that Austin would be America’s next boomtown, citing the city’s culture of openness and free-thinking. Unfortunately, these troubling regulations threaten to stifle the coming boom. If Austin wants to maintain its reputation of openness and innovation as we move into the age of the sharing economy, then it’s critical that the Foundation’s suit is successful and this misguided ordinance is struck down.