Dallas city council struggles to find a solution to short term rentals

The Dallas City Council is still struggling to find a solution to regulate short-term rentals in the city after years of complaints by constituents.

Dallas City Manager T.C. Broadnax jokingly asked at a recent briefing whether council members would prefer to adjourn rather than discuss the topic again, according to the Dallas Morning News. A city staffer later told the council that they are “still struggling to identify STRs and to confirm their existence in some cases.”

Short-term rentals listed on sites like Airbnb and VRBO allow homeowners to open private homes to vacationers and other visitors for short stays as an alternative to a hotel room. After four years of complaints and three city task forces, Dallas still doesn’t have a viable solution to what many residents have told them repeatedly is an intolerable situation, according to the publication.

City council member Omar Narvaez said some short-term rentals in his district illegally host large commercial events and that investors recently acquired and converted eight of 10 properties in a new townhome community in his district into STRs, creating “a hotel inside the middle of this residential neighborhood.”

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Because short-term rental properties are considered hotels under city code and state tax law, and property owners are required to pay hotel occupancy taxes, they only remove housing units from the market, infuriate residents, and further compound Dallas’ acute housing shortage. But while city code prohibits hotels from single-family residential neighborhoods, short-term rentals fall into a regulatory gap.

The city has stated that at least 1,174 short-term rental units pay hotel taxes. However, this does not include the estimated 5,000+ short-term rentals that operate under the radar and are paying no tax at all, nor does the city have a firm handle on all complaints regarding short-term rentals.

The city has tabulated 112 complaints from 69 short-term rental locations since October 2020 but concedes such statistics grossly understate the magnitude of the problem.

Broadnax has promised the council members that city staffers will present key elements of a new short-term rental ordinance in June, along with an option for the council to devise zoning requirements for short-term rentals. At this time, however, it is unclear how effective this will be at handling repeated instances of short-term rental dissonance.

[Dallas Morning News] — James Bell