SHORT-TERM RENTAL (STR) ORDINANCE – A HOMEOWNER’S VIEW

     There is a debate going on in College Station about the city’s efforts to get a handle on the placement and expansion of commercial “short-term rentals” (aka AirBNBs, VRBO’s,

Bed & Breakfasts, game-day rentals, party houses, etc.)  in our residential neighborhoods. This debate has led to a considerable amount of misinterpretation of standing law, the intent of registering these commercial entities, and the future development of more rental “products” in our city. From the perspective of a homeowner, it is probably worthwhile to cut through the noise and get down to the facts surrounding this contentious issue.

What is a “short term rental”?  

     The proposed College Station ordinance defines a short-term rental (STR) as “, ...a dwelling unit that is rented out for compensation on a temporary basis for a period of not more than 30 days; including but not limited to, single family unit, duplex unit, triplex, unit, four-plex unit, multi-family unit, manufactured or mobile home unit.” This ordinance only deals with the use of “single family units” located in our three residential neighborhood zones. (General Suburban, Restricted

Suburban, and Wellborn Restricted Suburban). It does not restrict the use of a short-term rentals in the other eight zoning districts. (Multi-Family, Multi-Use, Rural, Commercial, etc.)

     There are approximately 20,000 residential homes in College Station. City staff estimates that there are currently 270 “active” short-term rental units operating in the city. What this debate centers upon is whether the “property rights “and financial

interests of these 270 investment property owners take legal precedence over the 20,000 homeowners’ property rights to live in neighborhoods that reflect their personal and financial interests. It’s important to note that the Texas Legislature and courts have a 100 year history of protecting the rights and obligations of “home rule” cities like College Station to define the use of land in their jurisdiction that reflect the “desires and

needs of their citizens.”

     There is a concerted effort by the Texas Real Estate Political Action Committee to have the courts or the Legislature take away the rights of over 8,000 Texas cities to establish and maintain their historical land use authority. Under the “personal property rights” mantra, it is essentially the desire of the real estate industry to get a free hand to buy/sell property without having to worry about the impact on the citizens of our

communities. 

     Homeowners across the state are successfully pushing back against these “investor only” interests by restricting the proliferation of STRs in neighborhoods. There is no established law nor court opinion currently in effect that prohibits the City of

College Station from controlling the use of Short-Term Rentals in our city as detailed in this ordinance. Additionally the City of Austin, and the City of Arlington, have reasserted successfully their municipal authority to establish use restrictions on investor owned properties in their residential neighborhoods. 

     In the case of College Station, the defined use of General Suburban is “designed to accommodate sufficient, suitable residential neighborhoods, protected and/or buffered from incompatible uses.”  A reasonable person without a financial interest could conclude that a potential “party house” is an incompatible use in our General Suburban zoning district.

What are the facts surrounding this proposed ordinance?

• College Station has a long tradition of accepting the traditional “game-day rentals” in which owners opened their homes to guests for football weekends. It has been a way for our neighbors to earn extra income but not a primary “business use” of their homes. This works well because the homeowner has a vested financial interest in not degrading the neighborhood in which they chose to live.  This ordinance maintains and strengthens our traditional game day rental tradition by specifying that the only short-term rentals we want in our neighborhoods are those that are under the care and control of the owner of that primary residence. To our neighbors it is a home first and not an investment rental property in some distant geography.

• The College Station City Council agreed that only primary residence homes could be licensed to operate as a STR in our General Suburban, Restricted Suburban and Wellborn Restricted zones. These will be called Short-Term Rental Type 1 and Short-Term Rental Type 2. These two types of STRs are the same in that they require the property to be the primary residence of the operator. Where they differ is that STR Type 1 is a traditional Bed & Breakfast model in which a limited number of guests (4) are served meals on the premises and the owner/operator needs to be present during the rental.

• All non-primary residences (i.e. investor properties) will be able to operate in the other 8 Zones (Commercial, Multi-Family, Multi-Use, Rural, etc.) These investor owned STRs will be called Short-Term Rental Type 3 and will be licensed under the same regulations as STR Type 1 and STR Type 2.

• What changes for those who have operated game-day rentals out of their primary residence is that they will have to register, pay a small licensing fee, get a safety inspection ...fire extinguishers and smoke alarms....and make sure that they collect the Hotel Occupancy Tax from their guests as required by state tax code. The homeowner does NOT pay this, the guests do. These tax revenues can only be used to promote tourism to College Station. The homeowner does not need to be present during the rental period but needs to have an established emergency contact. To some existing homeowners this may seem to be burdensome at first but it is designed to help protect the homeowner from liability claims and to stop the proliferation of uncontrolled investment properties ( e.g., party houses) in their neighborhood.

• There are investor owned STRs that have been set up in the General Suburban and Restricted Suburban neighborhoods the past five years in direct violation to the City Land Use Ordinance. Whether it was ignorance of the restriction, incorrect advice from realtors or intentional disregard, the fact is that there are about 200 investor owned short-term rentals in our residential neighborhoods. Because the investment in these properties was based on variable interpretations of the actual ordinance it was determined by Council and Legal Staff that it would be fair to allow these already established investor owned properties to apply for a STR Type 2 license. These “grandfathered” investor properties could continue to operate if they meet the ordinance requirements for licensing and operations. However, once this property is sold the STR Type 2 license does not transfer. If the property wants to continue as a STR then it must comply with the Ordinance for a STR Type 2, in other words the primary residence of the operator.

     What those who oppose this ordinance are doing now is trying to stall the vote on June 25 so that they can proliferate this false narrative that the City is running roughshod over the “ personal property rights” of College Station residents. It is, at best, a thin veneer to disguise the real intent of those who may see our homes / neighborhoods only for their value as individual “products” that can be customized to meet the needs of any of their clients regardless of the long term impact of those homeowners who are invested for the long haul. Our City Council is putting the interests of the 20,000 homeowners ahead of the “desires” of a few STR investors.

     As a free market capitalist, I understand the desire of those who buy and sell land to have unrestricted access to every available piece of property in our city. This desire does not equate to “a right” to put commercial speculative ventures in our neighborhoods. This ordinance allows our real estate community eight different land use zones to creatively meet the needs of their STR investor clients. But at the end of the day, the desire to make money off our residential neighborhoods does not trump the real personal property rights of College Station's existing homeowners.