In early August of 2012, Austin City Council voted 5-2 to pass a new city code regulating short-term rentals (STRs). Under the new ordinance, short-term rentals are defined as any rental term of 30 days or less. The ordinance further breaks STRs into two categories.
The first category includes only those residential units that are owner-occupied. Under the new ordinance, these owner-occupied units may not operate without first obtaining a license. These units must be rented out in their entirety, with the lease covering the entire dwelling unit. As was true before the new ordinance, hotel occupancy taxes must be paid on these STRs. Finally, these owner-occupied STRs cannot operate without providing the tenants with certain information including the following: (1) name and contact information for a local responsible party;(2)occupancy limits; (3) noise restrictions; (4) parking restrictions; (5) trash collection schedule; and (6) information on burn bans and water restrictions.
The second category includes STRs of properties that are NOT owner-occupied. This second category of STRs is subject to all of the same regulations as the first, with one notable addition. No more than 3% of single-family homes in any given census tract may be granted licenses to operate as a "Type 2" STR.