New changes in effect for STR Type 2 licenses
On Tuesday, February 21, hundreds of Austin residents packed Austin City Council chambers to hear the latest discussion around regulations governing Type 2 short-term rentals, or STRs. With a 9-2 vote, Council adopted new regulations governing these types of rental properties and outlined plans to phase them out in residential zones by 2022.
What is a Type 2 STR? It is a short-term rental that is not owner-occupied and is not associated with an owner-occupied principal residential unit. Basically, any owner not occupying his or her property and renting out either the house or a secondary apartment on the same property, for short periods of time, is operating a Type 2 STR.
One of the broader STR regulations that passed was a new occupancy limit of no more than two adults per bedroom plus two other adults, for an overall max of 10 adults, or six unrelated adults. Also upheld were provisions passed in November 2016 that restrict “assemblies” (be they weddings, concerts etc.) from 10 p.m. to 7 a.m., and also restrict outdoor gatherings from 7 a.m. to 10 p.m. to a maximum of six adults.
Other new rules state that “bad actors”—owners who receive two violations within a year or “repeated substantiated violations” of the city code or state law over two years, may see their applications for licenses denied. Those who fail to register and become licensed with the city will be fined. And finally, properties that receive a notice of violation related to the life, health or safety of the structure will be subject to inspection every three years.
The regulations went into effect on April 1, when a year-long moratorium on any new licenses for the rentals expired. Whether and how new licenses for STR Type 2s in commercial zones will be issued in the future remains unclear.
The response to the rulings was mixed. Some, including a few Council members, hoped that Type 2 rentals owned and managed by people who follow the rules would be grandfathered in, but to no avail. Others, such as Austin residents have worked hard to make sure bad actors in their neighborhoods lose their licenses, applauded the decision.
Council says it plans evaluate the moratorium on new Type 2 properties next year. We expect to hear ongoing debate on this hot button issue in Austin real estate.
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