I confess, I missed that this was in the works.
Sebastien Long’s Lodgeur Inc. leases dozens of Houston apartments on a short-term basis, serving business travelers, recovering cancer patients, professional baseball players and people going through divorces or remodeling a permanent home after a storm. They’re not spring breakers or human traffickers, Long says.
His business could be crushed if the Houston City Council passes an ordinance that he maintains is basically useless aside from imposing excessive $275-per-unit annual registration fees, detrimental to someone who deals with multifamily homes.
“We’re looking to continue to grow, but this ordinance could slow us down,” he said. “Uncertainty is a killer.”
As it turns out, residents who have dealt with raucous party houses taking over their single-family neighborhoods also think the ordinance is useless. They say it doesn’t have enough teeth to weed out the bad apples — offsite operators who don’t care about illegal activity or code violations in residential areas.
The Houston City Council is set to vote on the ordinance on Wednesday, March 26. If it passes, some short-term rental operators say they’re contemplating forming an alliance and suing the city.
That’s exactly what Houston officials don’t want. Advocates on both sides of the issue speculate that the reason the ordinance is so watered-down and spent months under review by the city’s legal department is that the municipality wants to protect itself from litigation.
[…]
Under the latest version of the proposed ordinance, crafted by the Administration and Regulatory Affairs Department and reviewed by the city’s legal department, short-term rental owners or operators would have to register and pay an annual fee of up to $275 per unit. They have to notify the city of all platforms on which the unit is listed and can’t operate in an area if it violates that neighborhood’s deed restrictions. A 24-hour emergency contact must be provided. Registration can be revoked if two or more regulations are violated resulting in convictions within a year.
A requirement for $1 million of liability insurance was removed in the latest draft.
Jason Ginsburg, a real estate attorney who formed Houstonians Against Airbnb to pre-empt a property owner from operating short-term rentals in his neighborhood, said the ordinance represents “a bare minimum of effort by the city.
“This draft falls short of even moderate protections for neighbors,” he said. “Even if you can get a nuisance STR’s certificate revoked, which would be difficult enough under the draft, there is no penalty for multiple revocations. In other words, even if the STR is ticketed, prosecuted, and convicted for two noise violations in 12 months, the only consequence would be the loss of registration for a year. Basically, the STR owner would have to rent the property long-term for just one year, then could go back to business as usual.”
The ordinance bans owners and operators — but not occupants — from promoting events, Ginsburg pointed out, and there’s no consequence for exceeding maximum occupancy. The maximum penalty for violating general requirements, such as not listing an emergency contact, is a $500 fine.
“Most owners or operators will just risk the fines if there’s no threat to the underlying business,” Ginsburg said.
Long also took issue with the ordinance, noting that it targets property owners, not operators who handle day-to-day management.
“This is misaligned with reality,” he said. “Owners of large apartments typically contract operators to run STRs.”
The short-term rental business provides temporary housing for numerous reasons, Long explained. It’s imperative that hosts know their clients, require identification from each guest and install noise-monitoring devices.
“Our guests are quiet, and we actually have the data to prove it,” he said.
Further, Houston’s proposed ordinance holds property owners liable for guests’ actions, even if unauthorized visitors commit a crime.
“This discourages operators from reporting illegal activity, fearing they’ll lose their permit,” Long said.
Long suggests a “trusted operator system” granting immediate, temporary approval for pre-vetted operators who already pay hotel occupancy taxes. He said he also thinks the ordinance should require basic safety measures such as the empowerment of Houston police to remove problem guests and the implementation of human trafficking prevention measures, as set forth in the city’s hotel ordinance.
The ordinance was introduced in December, with stories from the Chron, Houston Public Media, the Houston Landing and the Leader News. Ginger has noted in recent editions of Dispatches from Dallas that both Dallas and Fort Worth are in the middle of litigation over their own STR ordinances. I too would like to see Houston avoid that fate.
As for this proposed ordinance, I basically agree with the quoted critics, that the main focus should be on rooting out the relatively small number of bad actors. The ordinance author, CM Julian Ramirez, says that a ban on STRs isn’t legal – I for one would argue it’s also not desirable – but I can’t quite tell what the goal of this ordinance actually is. I’m not sure we have a good model from other Texas cities to follow. I expect someone will tag this, the question to me is whether there will be further amendments proposed. We’ll see next week.
No idea what this is intended to do, but what it *should* do (and which it does not seem to contemplate at all) is address the real scourge of STRs: not noise, but real estate prices.
These things are like multi-million dollar versions of robot cars, spending half their time empty, not solving any problem, and making space more scarce for actual humans.