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Category: Regulations

  • Austin’s New STR Tax Grab: More Cash for City Hall,But What About Neighborhood Peace?

    Austin’s New STR Tax Grab: More Cash for City Hall,But What About Neighborhood Peace?

    The City of Austin is shaking things up for short-term rentals – think Airbnb, Vrbo, and the like. New rules are rolling out, especially about how taxes get paid. This could mean a lot more money for the city. That sounds good, right? But as some much-needed bigger changes get kicked down the road, folks in our neighborhoods are left wondering: Is this really solving the problems we face every day?

    The Tax Man Cometh (For Real This Time?)

    Starting April 1, 2025, a big change hits. Platforms like Airbnb and Vrbo will now have to collect the City of Austin’s Hotel Occupancy Tax (HOT) for every booking. They’ll send it straight to the city. Before, it was up to individual STR owners to do this, and let’s be honest, it seems many just…didn’t.

    Why the sudden shift? The city admits it’s been missing out on a pile of cash. Austin was collecting about $7 million a year from licensed STRs. But here’s the kicker: officials think there are around 2,200 licensed rentals, but potentially up to 10,000 – yes, ten thousand! – operating off the books. That’s a massive number of rentals possibly dodging taxes. Will forcing the big platforms to collect these taxes finally make everyone pay their share? And why did it take so long to address this glaring hole?

    This new rule means platforms collect taxes on all their Austin bookings, licensed or not. The city expects its piggy bank to get a lot fuller.

    Owners, Don’t Get Too Comfortable

    If you’re an STR owner and you book guests directly – no platform involved – you’re still in charge of collecting and sending in that HOT tax yourself. No escaping that.

    Plus, get ready for more paperwork. Starting with the quarter that begins April 1, 2025, STR owners must file a quarterly report with the City. This report has to show how much HOT each platform collected and paid for them. The city is updating its Austin Finance Online (AFO) portal for this. The first report, for the quarter ending June 30, 2025, will be due by July 31, 2025.

    Other Big Rule Changes? Not So Fast.

    Beyond grabbing those taxes, Austin was looking at other major changes to its STR rules. One big idea was to move STRs from the Land Development Code to Title 4 of the City’s code. That sounds complicated, but it basically means treating them more like other businesses with permits. But hold your breath – these changes have been pushed back to October 1, 2025.

    Why the delay? The city gives a couple of reasons:

    1. They want to see what the 89th Texas Legislative Session cooks up. New state laws could mess with local STR rules, so Austin’s playing it cautious.
    2. They need time to get new software. This tech is supposed to help track STR licenses better and make sure people are following the rules. The hope is it’ll make licensing smoother and get more owners to comply willingly. But will new software truly tackle the on-the-ground issues if enforcement isn’t beefed up too?

    The good news for operators, perhaps not for some long-term residents, is that STRs will still be allowed in all residential parts of Austin, as long as the operator has a valid license.

    What People Are Saying (And Why It Matters)

    Let’s not forget the backdrop to all these talks. Many Austin residents are worried. They’ve seen more and more STRs pop up in their neighborhoods. They’re concerned about how these mini-hotels are changing the feel of their communities, the noise from constant new faces, and whether it’s making it harder for regular folks to find a place to live. Are these new tax rules going to quiet those concerns, or is it just about the money?

    Austin’s Plan: Slow and Steady, or Too Slow to Help?

    It looks like Austin is taking this one step at a time. Getting the platforms to collect taxes is the first big move. It’s a fairly easy win because these big companies often do this elsewhere. This way, the city quickly gets more tax money it was missing.

    Pushing back the more complex rule changes gives them time. Time to see what the state does, time to get their new tech running, and time to think more about the rules. This careful approach makes sense when dealing with something as tricky as STRs. But for residents dealing with problem properties now, does “strategic delay” feel more like the city is dragging its feet?

    Why This Tax Change is a Big Deal

    Making platforms collect HOT is significant. Here’s why:

    • More City Cash: As we said, it should mean a lot more money for Austin by getting taxes from rule-breakers.
    • Fairer Competition: Hotels and licensed STRs have been paying these taxes. Unlicensed ones haven’t. City officials say this levels the playing field. Was it ever really a “field” if so many weren’t playing by the rules?
    • Platforms as Tax Cops: Basically, the city is making the STR platforms do some of the work of tax collection. These companies have the systems, so it should mean more people pay up. But are we now relying on private companies to enforce public good?

    So, Austin’s new STR rules, especially making platforms collect taxes, are a big step. It will mean more money for the city and aims for fairer competition. But the delay on other rules shows the city is being careful. They want to see what the state does and get better tools to manage STRs in the future. The question remains: will these changes ultimately address the quality-of-life issues that Austinites are so vocal about, or is this just the first act in a much longer play?

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  • Ireland’s STR Playbook: Big Numbers, Big Questions, and What the US Needs to Know

    Ireland’s STR Playbook: Big Numbers, Big Questions, and What the US Needs to Know

    Alright, let’s talk straight. Across the pond in Ireland, they’re wrestling with the same things we see right here in our neighborhoods: the boom of short-term rentals (STRs). We’ve got a new pile of research, including a big study paid for by Airbnb, shouting some impressive numbers about money and jobs. But what’s the real story behind the headlines, and what can towns and cities across America learn from Ireland’s experience? As your community impact correspondent, I dug in.

    The Shiny Numbers – What the Big Study Says

    First, let’s talk money, because the numbers are eye-popping. The study by Oxford Economics claims that in 2022, Airbnb activity pumped a whopping €501 million ($540 million USD approx.) into Ireland’s economy. Think about that – half a billion euros! They say it supported nearly 5,000 jobs across the country.

    Where did this cash come from? Guests spending money. The report estimates they spent €537 million ($580 million USD approx.) – partly on their stays, putting money directly into hosts’ pockets (around €255 million), and partly splashing out in local shops, pubs, and restaurants (over €180 million).

    Here’s something interesting for our own communities: the study says STRs are helping spread tourism dollars beyond the usual big city hotspots. In Ireland, Dublin’s share of Airbnb nights apparently dropped significantly, while regions out west and southwest saw big gains. Could STRs be a lifeline for smaller towns here in the US, bringing in visitors who might otherwise never stop by?

    And let’s not forget the hosts. The typical Irish host reportedly earned just over €5,600 (about $6,000 USD) in 2022. For many families, especially when costs are rising everywhere, that extra income isn’t just nice-to-have; it’s a vital buffer helping them make ends meet or fix up their homes. That’s a powerful community impact right there.

    Making sense of all this – the opportunities, the rules, the local market buzz – isn’t easy, is it? We’ve seen how places like Ireland are grappling with data and regulations, and getting that kind of clarity here in the US is crucial for homeowners trying to host responsibly. You need more than just headlines; you need real insights tailored to your specific area. Thankfully, tools are emerging to help cut through the noise. If you’re looking for detailed information to make smarter decisions about short-term rentals, one resource worth checking out is the StaySTRa Analyzer. Because having the right facts on the ground is the first step to navigating this landscape effectively, wouldn’t you agree?

    The Elephant in the Room – Housing Worries

    Now, let’s be real. Ireland, like many places in the US, is facing a tough housing situation. Rents are high, finding a place to live is hard, and some folks are pointing fingers at STRs, asking: are they taking homes off the long-term market?

    Housing groups like Threshold in Ireland raise alarms, showing numbers like over 20,000 entire homes listed as STRs compared to very few available long-term rentals. They worry about big operators buying up properties just for STRs. It’s a serious concern we hear in American cities too. Are STRs making it harder for local families to find a place to call home?

    But hold on, the picture gets complicated. Ireland’s own research institute (ESRI) looked into it and found no clear nationwide link showing STR growth directly caused the drop in long-term rental listings across the whole country. They did say STRs could be having a negative impact in specific local areas, especially tourist hotspots where lots of rentals are concentrated. They also found many STRs, particularly outside cities, used to be holiday homes anyway – meaning they might never have been rented out long-term.

    And that Airbnb-funded study? It argues STRs are just a tiny fraction – less than 0.5% – of the total housing stock in big European cities. Their point: even if every single STR went back to long-term housing, it wouldn’t drastically change prices overall.

    So, who’s right? The truth is probably messy. STRs likely aren’t the main villain driving housing shortages nationwide, but in certain popular neighborhoods, they definitely add pressure. The question isn’t if STRs have an impact, but how much, where, and what’s the best way to manage it without throwing the baby out with the bathwater?

    Rules of the Road – Ireland’s Plan (and Delays)

    Ireland knows it needs clearer rules. They’re working on a national sign-up sheet – a register – for all STR properties. The idea is simple: get everyone listed, give them a number, and make platforms like Airbnb check that number before allowing bookings. Fáilte Ireland, their tourism authority, is set to run it. This is supposed to bring transparency, help enforce existing rules (like needing planning permission in certain zones), and maybe nudge some properties back to the long-term market.

    Sounds sensible, right? It aligns with new rules coming from the European Union, aiming for consistency across countries. Platforms will have to share data, and there will be penalties for breaking the rules – both for hosts and the platforms themselves.

    But here’s the kicker: it’s delayed. Badly. Why the holdup? It seems politicians are stuck in a tug-of-war – trying to fix housing problems without hurting tourism, especially in rural areas that depend on those visitor dollars. This delay causes confusion and frustration. While they argue, who is making sure the current rules are even followed? It raises a big question: What good are rules if nobody enforces them?

    Lessons for Main Street USA

    So, what does Ireland’s rollercoaster ride mean for us here in the States?

    1. STRs = Real Economic Fuel: Don’t dismiss the dollars. Ireland’s numbers show STRs can bring serious money into local economies, support jobs, and help homeowners earn crucial income. We see this in countless American towns too.
    2. Spreading the Love: The idea that STRs can push tourism beyond big cities is compelling. For smaller US communities looking for a boost, STRs could be a powerful tool if managed right.
    3. Housing is Complex: Blaming STRs entirely for housing shortages is too simple. Yes, they can have an impact, especially in hotspots. But the Irish research suggests the reality is nuanced. We need good data, not just assumptions.
    4. Registration is Key: Ireland’s move towards a national register, matching the EU trend, makes sense. Knowing who is hosting where is the first step towards fair oversight. US cities are already doing this – think Alexandria, VA or Raleigh, NC. It provides transparency.
    5. Smart Rules, Not Sledgehammers: The goal should be balanced regulation. Outright bans or overly strict caps (like Amsterdam’s 30-day limit, which didn’t solve housing but hurt hosts) might be throwing away economic benefits. The focus should be on:
      • Simple, clear registration.
      • Using data to understand local impacts.
      • Enforcing basic rules (safety, taxes, nuisance).
      • Targeting problematic operators (like commercial landlords running illegal hotels), not everyday folks sharing their homes.
    6. Don’t Get Stuck: Ireland’s delays show that political deadlock helps no one. We need clear rules that people can actually follow, implemented fairly and without endless waiting.

    Ireland’s story is a work in progress. They’re showing that STRs offer real opportunities but also raise genuine community questions. The challenge – for Ireland and for us – is to find that sweet spot: rules that protect neighborhoods and housing without crushing the economic engine and the property rights of homeowners sharing their space. Let’s learn from their experience, demand good data, and craft fair, enforceable rules that allow responsible short-term rentals to thrive alongside our communities. Are our local leaders ready to have that honest conversation?

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  • Houston Implements Comprehensive Short-Term Rental Ordinance: Balancing Growth and Neighborhood Concerns

    Houston Implements Comprehensive Short-Term Rental Ordinance: Balancing Growth and Neighborhood Concerns

    Houston, Texas, has officially entered the arena of comprehensive short-term rental (STR) regulation. On April 16, 2025, the City Council unanimously passed a new ordinance aimed squarely at mitigating the negative externalities often associated with STRs, particularly disruptive “party houses,” while establishing a clear framework for operators. This move culminates a period of deliberation and marks a significant step for a major city previously lacking such specific oversight.

    Establishing the Ground Rules: Registration and Operation

    The ordinance introduces a mandatory registration system, requiring operators to obtain an annual certificate for each STR unit.

    • Timeline: Applications open on August 1, 2025, with the ordinance taking full effect on January 1, 2026.
    • Cost: The annual registration fee is set at $275 per unit.
    • Scope: The rules apply to an estimated 8,500 STRs operating within Houston city limits.

    Beyond registration, the ordinance mandates adherence to several operational standards. Operators must:

    1. Comply with Existing Codes: Ensure properties meet noise, waste management, building safety, and fire safety standards.
    2. Provide Emergency Contact: Designate a contact person available 24/7 who can respond promptly to issues arising at the property.
    3. Remit Taxes: Pay the requisite Hotel Occupancy Taxes (HOT) (taxes levied on sleeping accommodations, akin to those paid by traditional hotels).
    4. Undergo Training: Complete annual training focused on identifying and reporting human trafficking.
    5. Prohibit Event Advertising: Explicitly forbid marketing STR properties as venues for parties or large events.

    Crucially, the ordinance leverages the cooperation of hosting platforms like Airbnb and Vrbo. These platforms will be required to remove listings for unregistered properties within 10 days of receiving notification from the city, adding a significant layer of enforcement capability.

    Enforcement Mechanisms: Addressing Violations

    Recognizing that rules without enforcement are often ineffective, the Houston ordinance includes specific mechanisms for addressing non-compliance. Registration certificates can be revoked for several reasons, including:

    • Multiple violations of the sound ordinance.
    • Serious criminal convictions involving guests at the property (e.g., disorderly conduct, prostitution, reckless firearm discharge).
    • Failure to adhere to other provisions of the ordinance or relevant city codes.

    The city has also implemented measures to target problematic operators managing multiple properties:

    • Portfolio Revocation: An owner or operator accumulating three or more certificate revocations across their entire portfolio within a two-year period may have all their STR registration certificates revoked city-wide.
    • Building-Specific Revocation: Within a single multifamily building, if 25% or more of an owner/operator’s STR certificates are revoked, the city reserves the right to revoke the remaining certificates held by that operator in that specific building.

    To manage complaints and monitor compliance, Houston has contracted with Host Compliance, a service provided by Granicus, indicating an investment in technological solutions for oversight.

    Initial Reactions and Lingering Questions

    The ordinance received public praise from Expedia Group (parent company of Vrbo), which lauded the collaborative process and positioned the outcome as a potential model for other cities. This suggests that at least some segments of the industry see value in clear, albeit potentially strict, regulatory frameworks.

    However, concerns remain. Some operators worry about the breadth of host liability for guest actions and the potential for subjective interpretation of offenses like “disorderly conduct” leading to revocation. Furthermore, despite the unanimous vote, several council members expressed reservations about the city’s practical ability to enforce the new rules effectively, citing historical challenges in responding to complaints even before this comprehensive system was in place. City officials have acknowledged that this ordinance represents a starting point, subject to potential amendments as implementation proceeds and data is gathered.

    Ultimately, Houston’s ordinance represents a concerted local effort to harness the economic benefits of STRs while actively managing their impact on residential communities. Its success will likely hinge on the city’s commitment and capacity for consistent enforcement.

    Stay up to date on the changing STR regulations.

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  • State vs. Local Control: Who Makes the Rules for Short-Term Rentals?

    State vs. Local Control: Who Makes the Rules for Short-Term Rentals?

    When it comes to short-term rentals (STRs) like those found on Airbnb or Vrbo, a big question keeps popping up across the country: Who gets to make the rules? Should the state government set one standard for everyone, or should local cities and counties decide what’s best for their own communities? This debate over state vs. local STR regulation is heating up, and recent events show just how different the approaches can be.

    Austin Takes Action: Making Platforms Collect Taxes

    Let’s look at Austin, Texas. While the city is still figuring out some bigger changes to its STR rules (now delayed until October 2025), they made one important move starting April 1, 2025.

    Now, platforms like Airbnb and Vrbo must collect the city’s 11% Hotel Occupancy Tax (HOT) on every booking. This applies to all STRs in Austin, even if the property doesn’t have a city license.

    Why did Austin do this? Officials estimate around 10,000 unlicensed rentals weren’t paying this tourism tax. This new rule aims to fix that, ensuring STRs contribute tax revenue similar to traditional hotels. It means guests will pay more, but the city expects a significant boost in funds for tourism and cultural projects. This is a clear example of a local government using its power to solve a specific local problem.

    States Step In: Different Directions on Local Power

    While Austin focused locally, state legislatures are taking broader actions, often pulling in opposite directions.

    • More Power to Locals (Louisiana): In Louisiana, lawmakers are moving forward with bills that clearly support local control. House Bill 469 confirms that cities and parishes can set their own STR rules, like requiring permits or safety checks. Another bill, Senate Bill 225, goes further. It would ban unlicensed STRs statewide and cleverly allows neighbors or community groups to sue illegal operators. This gives local areas another tool for enforcement, especially helpful where city resources are limited.
    • Less Power to Locals (Ohio & Idaho): Ohio and Idaho are heading the other way. Proposed laws there (Ohio Senate Bill 104, Idaho Senate Bill 1162) aim to limit what local governments can do. These bills try to stop cities and counties from enacting common STR restrictions, such as:
      • Outright bans on STRs
      • Requiring the owner to live on the property
      • Using zoning to keep STRs out of neighborhoods
      • Setting high license fees or strict limits on the number of rentals.
      These states favor treating STRs more like regular long-term rentals, pushing for state preemption where the state sets the main rules. They generally prefer low registration fees and sometimes want platforms to handle tax collection statewide.
    • Lobbying Matters (Washington State): Sometimes, industry players influence these state decisions. In Washington State, a proposal to let local governments add an optional tax (up to 4%) on STRs failed. Reports suggest Airbnb spent heavily lobbying against it. This shows how powerful platforms can be in shaping state vs. local STR regulation debates.

    What Does This Mean for STRs?

    This ongoing push-and-pull between state and local control highlights a few key things:

    1. Platforms Are Watching: Companies like Airbnb and Vrbo pay close attention to proposed rules. They fight hard against laws they dislike (like new taxes) but might work with cities on rules they can live with, or comply when mandated (like Austin’s tax collection). Handling these different short-term rental laws is a big part of their business strategy.
    2. Enforcement is Tricky: Even with new rules, making sure everyone follows them is a challenge. Houston officials worried about enforcing their new ordinance. Austin delayed rule changes partly to get better tracking software. Louisiana’s idea of letting neighbors sue suggests official enforcement isn’t always enough. This “enforcement gap” is a real issue.
    3. The Conflict Continues: The core argument – state authority vs. local needs – isn’t going away. Debates often pit statewide economic arguments against local worries about housing, neighborhood peace, and quality of life. Expect more battles over state vs. local STR regulation in legislatures and city halls.

    The rules for short-term rentals are constantly changing, shaped by this fundamental conflict over who holds the power to regulate.

  • Airbnb’s Global Tightrope: Walking Between Innovation and Regulation

    Airbnb’s Global Tightrope: Walking Between Innovation and Regulation

    Spending my time between Austin and the vibrant Ciudad de México, I often think about how connected we all are, especially through travel. Platforms like Airbnb have shrunk the world, letting us peek into lives and neighborhoods far from our own. It feels like magic sometimes, doesn’t it? But like any powerful force, it creates ripples. Recently, we saw discussions flare up in Washington State about short-term rental rules. This isn’t just a local story; it’s a scene playing out across the globe, a constant dance Airbnb performs with cities and their laws.

    Millions of Doors, Many Questions

    Imagine this: over 7 million homes listed on Airbnb, scattered across more than 220 countries. That’s a staggering number of doors opened, connections made, and guest stays – exceeding 10 million early in its journey! It’s brought us unique travel experiences, offering “cost-savings, household amenities, and the potential for more authentic local experiences,” as some observers note.

    But this explosion of short-term stays, this “disruptive innovation,” often bumps up against rules made for a different time. Think about bustling tourist hubs like Miami, Barcelona, or Lisbon. Reports have surfaced from these cities and others about the pressure on housing. In Lisbon, for example, the tourism boom fueled by platforms like Airbnb led to situations where “many tenants [were] forced to leave their homes unable to afford rising rents.” It’s a tough reality. Back in 2018, Bloomberg even noted Miami was the priciest city for Airbnb stays. It shows how quickly these platforms can reshape a place.

    Navigating Murky Waters

    So, what happens when a new idea doesn’t quite fit the old rules? Well, it gets complicated. As one analysis points out, “As the economic power of these technology-driven firms grows, there continue to be regulatory and policy skirmishes on every possible front…” It’s true. Airbnb and similar companies often find themselves operating in “legal gray areas.”

    Instead of just accepting the existing laws, they’ve had to become active participants in changing them. It’s described as a strategy where companies “have become agents of legal change, focusing major parts of their business plans on changing the law.” This isn’t about ignoring rules, but about trying to shape new ones that accommodate this new way of traveling and hosting, addressing things like taxes, safety, and how rentals affect neighbors and housing availability. It’s like trying to navigate a river that’s constantly changing its course.

    Finding the Balance: El Corazón del Asunto

    At the heart of it all – el corazón del asunto – are people. There are the hosts, many sharing their homes to make ends meet or connect with travelers. There are the guests, seeking affordable, unique stays. And crucially, there are the long-term residents, the neighbors, the communities whose streets and apartment buildings are changing.

    Finding the right balance is key. How do we keep the benefits of home-sharing – the cultural exchange, the economic boost for hosts – while protecting neighborhoods and ensuring housing remains accessible? It’s a puzzle (un rompecabezas) cities worldwide are trying to solve. There isn’t one simple answer, and the conversation involves listening, understanding, and a willingness to adapt from all sides.

    Airbnb’s journey highlights this ongoing challenge. As it continues to connect millions, it must also continue its dialogue with communities everywhere, navigating the complex web of global regulations, one city, one neighborhood at a time.

    Stay Connected!

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  • Washington State Eyes New 6% Tax on Short-Term Rentals: A Deep Dive into House Bill 1763

    Washington State Eyes New 6% Tax on Short-Term Rentals: A Deep Dive into House Bill 1763

    The landscape for short-term rentals (STRs) in Washington State may be facing a significant shift. Proposed legislation, House Bill 1763, has ignited a contentious debate, pitting proponents of affordable housing against STR operators and platforms like Airbnb. At the heart of the matter is a proposed 6% statewide tax on STR bookings, designed to generate funds for local housing initiatives. As a former law clerk with a keen interest in housing policy and zoning, I find this development particularly noteworthy, representing a common tension playing out across the country.

    Understanding House Bill 1763

    Introduced in the Washington State Legislature, HB 1763 seeks to impose a new 6% tax specifically on the occupancy of short-term rental units. The revenue generated from this tax would be earmarked for local governments to invest in affordable housing projects within their jurisdictions. This legislative effort targets a market estimated to involve potentially 35,000 rental units statewide that proponents argue are impacting the long-term housing supply.

    The Argument for the Tax: Addressing the Housing Nexus

    Supporters of the bill, including State Senator Liz Lovelett, draw a direct line between the growth of the STR market and the state’s affordable housing challenges, particularly in tourist-heavy areas. Senator Lovelett articulated this view, stating, “There’s obviously a fairly easy nexus¹ to recognize between a lack of housing existing in areas that have a lot of tourism and the proliferation of short-term rentals, especially in the last decade.”

    The rationale is straightforward: as properties shift from long-term rentals or owner-occupancy to STRs, the available housing stock for residents decreases, driving up costs. Reports from areas like Glacier, WA, paint a stark picture, describing housing as “borderline impossible” for local workers and raising fears of the town becoming solely a resort destination. Proponents, like Senator Lovelett, argue the tax empowers local governments, allowing them to “put some skin in the game on solving their own local housing issues” using funds generated directly from the sector perceived to be contributing to the problem.

    ¹ Nexus, in a legal and tax context, refers to a sufficient connection or link between a taxing entity (like the state) and the activity or entity being taxed (STR operations) to justify the imposition of the tax.

    Industry Pushback: Fairness and Economic Strain

    Unsurprisingly, the proposed tax faces strong opposition from the STR industry. Airbnb, a major platform operating in the state, and its associated political action committee, HOST PAC, argue vehemently against the measure. They contend that the tax “creates an unfair competitive disadvantage for Washingtonians who share their home to make ends meet.” This highlights a key defense: many hosts are individuals using rental income to supplement their earnings, not large corporations.

    Airbnb also points to its existing contributions, noting it remitted approximately $78 million in tourism-related taxes in Washington on behalf of its hosts in 2023. Adding another 6% tax, they argue, constitutes an undue burden. Host organizations, such as the Washington Host Coalition Association (WHCA), echo these concerns, emphasizing the financial pressures hosts already face amid “tough economic times, and high gas and grocery prices.” While an opposition rally in Olympia drew around 70 attendees, the industry’s lobbying efforts are significant.

    Policy Considerations and the Broader Context

    The debate surrounding HB 1763 reflects a larger, national conversation about regulating the STR market. Municipalities and states are increasingly grappling with how to balance the economic benefits of tourism facilitated by STRs against concerns about neighborhood character, housing availability, and equitable taxation.

    From a policy perspective, the proposed tax in Washington attempts to internalize an externality – that is, making the STR industry contribute financially to mitigating a perceived negative consequence (reduced housing affordability) associated with its operations. The legal concept of “nexus” mentioned by Senator Lovelett is crucial here; establishing this link is fundamental to the tax’s justification and potential legal defensibility.

    However, opponents raise valid points about fairness, questioning whether STRs are being singled out disproportionately compared to other factors influencing housing costs. They also emphasize the economic activity generated by hosts and guests.

    Conclusion: A Balancing Act

    House Bill 1763 presents a clear conflict between distinct policy goals: fostering affordable housing versus supporting the burgeoning STR economy. Proponents see a necessary tool for local empowerment and a fair way to address housing shortages linked to STR growth. Opponents, including hosts and major platforms, view it as a punitive measure that unfairly burdens individuals and overlooks their existing economic contributions. As this bill progresses, the outcome will undoubtedly have significant implications for hosts, guests, and the broader housing market in Washington State. The debate underscores the complex challenge of integrating new economic models like STRs into existing community structures and regulatory frameworks.

    The rules governing short-term rentals are complex and subject to change. For ongoing expert analysis of key legislative actions, court decisions, and policy trends impacting the STR industry, subscribe to the Staystra email list today.

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  • The Hidden Dangers of Inflated Seller Concessions: A Legal Perspective

    The Hidden Dangers of Inflated Seller Concessions: A Legal Perspective

    As your Legal & Policy Contributor, I recently had the pleasure of listening to an incredibly informative segment on the Shortterm Show podcast, hosted by the insightful Avery Carl. You can find the full discussion here:

    In a recent discussion, Avery Carl and commercial real estate attorney Carrie Rosati explored some of the riskier “hacks” in real estate investing. One particular point, around the 29-minute mark, focused on seller concessions. As the Legal & Policy Contributor, this part of their conversation grabbed my attention due to its serious legal implications.

    Understanding the Limits of Seller Concessions

    Commercial real estate attorney Carrie Rosati clearly explained to Avery Carl that there are usually limits on how much money a seller can give back to a buyer for expenses like closing costs and prepaid items. These limits typically range from 2% to 6% of the property’s price, and the exact percentage depends on the type of loan. This system is in place to protect the fairness of the deal and prevent artificially inflated property values.

    The Dangerous “Cash Back Hack”

    However, some investors are trying to get significantly more cash back than these rules allow. The podcast described a strategy where a buyer offers the seller the asking price (for example, $500,000) but secretly arranges for a much larger amount (like $100,000) to be paid back at closing. This secret cash back agreement is hidden from the lender, often by using a separate LLC to make it look like a deal with an unrelated company.

    Carrie Rosati didn’t mince words: “This is so not a gray area. This is this is clear mortgage fraud.” This strong warning from a seasoned legal expert should make anyone considering this tactic think twice.

    As Ms. Rosati expertly explained, this scheme works by “artificially inflating the value of the property” to get a bigger loan than the property is actually worth. Lenders rely on loan-to-value ratios (the amount of the loan compared to the property’s value), and this practice undermines that basic principle. She also pointed out that borrowers usually tell the lender they’ve disclosed all parts of the purchase agreement and that the stated price is the real price. By hiding a separate agreement for a large cash back, these statements become false.

    Why This Matters: A Reminder of the 2008 Crisis

    Avery Carl wisely connected this practice to the issues that contributed to the 2008 financial crisis. When property values are inflated, and loans are based on these inflated numbers, it creates a situation where “the bank has 10 $500,000 loans out on what are essentially $400,000 properties.” This excessive borrowing means lenders don’t have enough security if borrowers can’t repay their loans. If many borrowers default, the bank can’t recover the full loan amount, which can lead to significant financial instability – something we definitely want to avoid repeating.

    Serious Consequences: Federal Crimes

    The risks of engaging in such a scheme go far beyond just having your loan called back. As the highly experienced Carrie Rosati emphasized, “These are the kinds of things the government investigates. And you don’t want to be in that position. It’s a It’s a really bad idea.” She further clarified that mortgage fraud isn’t just a state crime; it’s also a federal offense, which can lead to severe penalties, including large fines and even jail time.

    A Word of Caution and Wise Advice

    While the idea of extra cash back might seem appealing, especially for investors trying to maximize returns or manage their budget, it’s essential to understand the significant legal dangers involved. Ms. Rosati wisely advises, “If you think you’ve got if you think you’ve you’ve figured something out before you before you sign on the dotted line and you put yourself at risk, call a lawyer, pay him for an hour time of consultation, ask him the question.”

    It’s always best to seek professional legal advice before entering any transaction that might be legally questionable. Being open and honest with your lender is crucial. Trying to deceive them for a short-term gain can have severe long-term consequences. Remember, the goal is to build lasting wealth through smart and ethical investment strategies, not to endanger your financial future with risky and illegal schemes.

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  • Short-Term Rentals in New Braunfels: What You Need to Know

    Short-Term Rentals in New Braunfels: What You Need to Know

    Let’s talk about the rules for short-term rentals (STRs) – like Airbnb and VRBO – in New Braunfels, Texas. It can seem like a lot, but we can break it down in a way that’s easy to understand.

    What’s a Short-Term Rental?

    In New Braunfels, a short-term rental is a house or a two-family house that people rent out for less than 30 days at a time. Think of it like a hotel, but it’s someone’s home. This doesn’t include regular hotels, motels, or apartments that rent for longer periods. If you advertise your house online for short stays, you need to follow these rules!

    Getting Permission: The Permit

    If you want to run a short-term rental in New Braunfels, you need to get a special permission slip from the city called a permit. You can’t just start renting without it. You have to apply online through the city’s website.

    To get a permit, you’ll need to show them some important papers, like:

    • Proof that you own the house.
    • A drawing of your property showing where the house is and where people can park their cars (not in the garage!).
    • A drawing of the inside of your house, showing all the rooms and where people sleep.
    • Proof that you have insurance in case something goes wrong.
    • The name and phone number of someone who can be there quickly if there’s a problem.
    • A letter if someone else is helping you manage the rental.
    • A paper that tells renters the rules and who to call if there’s an emergency.
    • Information about your water and other bills.

    There’s also a fee to apply for the permit and another fee every year to keep it active. Someone from the city will also come to check your house to make sure it’s safe for renters. Once everything is okay, you’ll get your permit!

    Where Can You Have a Short-Term Rental? Zoning Rules

    This is a big one. The city has rules about where you can and cannot have short-term rentals based on how the land is zoned (what the city says that area can be used for).

    • No STRs in Normal Neighborhoods: If your house is in an area zoned for regular houses (like where most people live), you usually can’t have a short-term rental. This is something people are fighting about in court right now.
    • STRs in Some Business Areas (Maybe with Extra Steps): In some areas zoned for businesses, you might be able to have a short-term rental, but you might need to get another special permission called a “Special Use Permit” (SUP). This is like asking the city extra nicely if it’s okay.
    • No SUP Needed in Certain Business Areas: There are a few specific business zones where you might not need the extra SUP, but you still need the regular permit.
    • Getting a Special Use Permit (SUP): Getting an SUP can take a while (maybe three months!) and cost extra money. The city will tell your neighbors you want to do this, and there will be public meetings where people can say if they agree or disagree. You’ll need to give the city a lot more information about your property. Even if you do all this, the city might still say no.
    • No STRs in Floodways: If your house is in an area that floods easily (a floodway), you can’t have a short-term rental, no matter what the zoning is.

    How to Check: The city has a cool online map where you can type in an address and see if short-term rentals are allowed there.

    Rules for Running Your Rental

    Once you have your permit, you need to follow some rules to make sure everything runs smoothly and doesn’t bother the neighbors:

    • How Many People Can Stay? You can have two adults for every bedroom, plus two more adults in the whole house.
    • Parking: You need to have at least one parking spot outside the garage for each bedroom.
    • Noise: You have to follow the city’s general rules about noise. If your renters are too loud, people can complain to the police.
    • Trash: You and your guests need to follow the regular trash rules for houses in the city.
    • Safety: You need to have things like smoke detectors and fire extinguishers that work. You also need to have a plan for how people can get out of the house in an emergency, and it needs to be easy for guests to see.
    • Insurance: You need to keep your insurance up to date.
    • Someone to Call: You need to have a person who is available 24/7 and can get to the property within an hour if there’s a problem.
    • Things to Show: You need to put your permit sticker on the property and give your guests the information sheet with the rules and emergency numbers.

    The city also suggests having a written agreement with your renters.

    Paying Taxes: Hotel Occupancy Tax (HOT)

    If you rent your place for less than 30 days, you have to collect a special tax from your guests called the Hotel Occupancy Tax (HOT). There are a few parts to this tax:

    • State Tax: Texas charges a 6% tax.
    • City Tax: New Braunfels charges a 7% tax.
    • County Tax (Maybe): If your property is in a certain part of the city (Guadalupe County), you might have to collect another county tax.
    • Water District Fee (Usually Not in the City): There’s another fee for properties near the lake, but this usually doesn’t apply to rentals within the city.

    Important! You are the one who needs to collect and send the city’s 7% tax (and the county tax if it applies). Websites like Airbnb and VRBO might collect the state tax, but they usually don’t handle the city’s tax for you. You have to do it yourself through the city’s online portal every month, even if you didn’t have any renters that month. If you don’t pay on time, you’ll have to pay extra fees! The city can also check your records to make sure you’re paying the right amount.

    What Happens if You Break the Rules?

    The city has people who check if short-term rentals are following the rules. If people complain about your rental or if you don’t have a permit, you could get in trouble. This could mean getting fines or even having your permit taken away. If you don’t pay your taxes, you’ll also have to pay penalties and could even face legal charges.

    Things Are Changing: New Rules and a Court Case

    The rules for short-term rentals in New Braunfels have been updated recently, and there’s a big court case going on right now. Some people think the city’s rule that bans short-term rentals in regular neighborhoods is unfair. The court case is still ongoing, so the rules might change in the future.

    What Should You Do?

    If you’re thinking about running a short-term rental in New Braunfels, it’s really important to:

    • Check the City’s Website: The city has a lot of information online about the rules.
    • Use the Online Map: See if short-term rentals are allowed where you want to operate.
    • Read the City’s Guide: They have a special guide for short-term rentals.
    • Talk to a Lawyer (If Needed): If you have questions about the rules or the court case, it’s a good idea to talk to a lawyer who knows about this stuff.
    • Contact the City: You can also call the city if you have specific questions.

    It’s important to follow all the rules so you can run your short-term rental safely and without problems!

    Learn More Here: City Of New Braunfels

  • Austin Short-Term Rentals Get a Little More Taxing: What You Need to Know

    Austin Short-Term Rentals Get a Little More Taxing: What You Need to Know

    Austin is a cool city with music, great food, and a chill vibe. But something new is happening that could change your next Airbnb or Vrbo booking. Starting April 1, 2025, if you rent a short-term place in Austin, you’ll have to pay an extra 11% in taxes.

    What’s This New Tax All About?

    Before, not all short-term rentals in Austin had to collect this Hotel Occupancy Tax, or HOT. It depended on if they had the right papers. But now, the city says everyone renting out a place for less than 30 days has to add this 11% tax. That’s like adding a little extra cost to your stay. This tax has two parts: 9% is a general hotel tax, and 2% goes to special city projects.

    What Does This Mean for You When You Book?

    If you’re planning a trip and using sites like Airbnb or Vrbo, your total cost will likely go up a bit. These websites now have to collect that 11% tax for the owners. Some owners think that because of this extra cost, they might lower their nightly prices to stay competitive. So, while you’ll see the tax added on, the base price of the rental might drop a little. It’s also possible that hotels in Austin, which already charge this tax, might look like a better deal now.

    What About the People Renting Out Their Places?

    For folks who rent out their homes, this new rule changes who takes care of the tax money. Now, Airbnb and Vrbo will handle collecting the 11% from guests and sending it to the City of Austin. Before, the owners usually had to do this themselves. One owner, Joe Arenella, thinks this will make things easier for them and maybe they won’t have to fill out as many reports for the city.

    But here’s a catch: for the first three months after April 1, 2025, owners still need to tell the city how much tax the websites collected for them. This seems like the city wants to make sure everything is correct while this new system gets started. By having the big websites collect the tax, Austin hopes to get more tax money from short-term rentals. They think some owners weren’t following the rules before.

    Why Is Austin Doing This?

    Why is the city making this change? Councilmember Vanessa Fuentes says it’s a big step in dealing with rentals that weren’t following the rules and how these rentals affect the housing situation in Austin. The city wants to better control short-term rentals and use the extra tax money for important things like tourism, local artists, and keeping Austin’s culture alive. Mayor Pro Tem Vanessa Fuentes even said the city might have been losing thousands of dollars in tax money each day because not everyone was paying what they should. This tax money helps fund things like promoting Austin as a tourist spot, supporting art programs, and the Austin Convention Center. The city figured it would be easier to have the big online platforms collect the tax instead of chasing down lots of individual owners.

    This is also part of a bigger plan to find a balance between the money tourism brings in and the concerns of people who live in Austin about affordable housing and the quality of their neighborhoods. The city is using this tax and other rules to manage the growing number of short-term rentals.

    To make sure everyone knows the rules, the city has made some clear definitions. A “Platform” is a website or company that helps people book short-term rentals. A “Short-Term Rental” is renting out a home or part of a home for less than 30 days in a row. This doesn’t include longer stays or rentals between people buying or selling a house. These clear definitions help everyone understand what the new rules mean.

    Austin’s Long Road with Short-Term Rentals

    Austin has been trying to figure out how to handle short-term rentals for a while. Back in 2016, they tried to put stricter rules on rentals that weren’t the owner’s main home. But the courts said no to some of these rules, saying the city couldn’t treat short-term rentals differently from long-term rentals in some ways. So, now the city is trying a new way – making the online platforms collect taxes. This shows how tricky it can be for the city to manage short-term rentals while respecting the rights of property owners.

    Austin Hotel Occupancy Tax Breakdown

    Tax ComponentRateDescription
    Occupancy Tax9%General tax on hotel and short-term rental stays
    Venue Project Tax2%Tax dedicated to financing venue projects
    Total HOT Rate11%Applicable to all short-term rentals

    What Do the Experts Say?

    People who work in the short-term rental business have different thoughts about this new tax. Blake Carter from Cribs Consulting thinks that at first, guests will pay more, but then prices might go down. He also thinks rentals outside of Austin’s main city area might become more popular because they won’t have this extra tax. Matt Curtis from Smart City Policy Group believes these changes are needed to go after the “bad actors” in the rental market. Five Star Vacation Home Rentals thinks it’s smart for the city to wait on other big rule changes because the state might pass new laws about short-term rentals. They like that platforms will collect the tax for owners who were already following the rules. But they worry it could be tough for those who weren’t paying taxes before and might lead to more enforcement. Luis Briones from Airbnb says they’ve been wanting platforms to collect these taxes for a long time and they support rules that let people earn money by renting out their homes. This new tax could change things in Austin’s short-term rental scene. Places outside the city or those run by big companies might become more attractive. While websites like Airbnb are okay with collecting the tax, we’ll have to see how it really affects individual owners and the overall market. Some think it will be simpler, while others see potential problems with higher costs and more competition.

    This is Just One Piece of the Puzzle

    This new tax rule is just one part of a bigger conversation about how Austin regulates short-term rentals. The city council has also made other changes that will start on October 1, 2025. These changes will move the main rules for short-term rentals to a different part of the city’s rules, the part about business regulations. But even with this change, you’ll still be able to have a short-term rental in any neighborhood in Austin as long as you have the right license. The city is also thinking about making rental listings show their city permit numbers, limiting how close together rentals owned by the same person can be, and maybe putting rules on who can own a lot of rentals. Austin is also watching what the state government in Texas might do with short-term rental laws, because that could affect the city’s rules. Mayor Kirk Watson has suggested waiting on some of these ideas until the state decides on its laws. So, the rules for short-term rentals in Austin are still changing, and this new tax collection is likely just the first step. What happens next will depend on what the state does and what the Austin City Council decides in the coming months.

    What Do Owners Still Need to Do?

    Even though the online platforms will now handle the tax collection, short-term rental owners in Austin still have some things they need to do. For the first three months starting April 1, 2025, owners need to tell the city how much tax each platform collected for them. The city is updating its online system to make this easier. Owners need to remember that these reports and any tax payments they still need to make (like for direct bookings not on websites) are due by the last day of the month after each three-month period ends. If they don’t file or pay on time, they’ll have to pay late fees. Also, it’s still super important for all short-term rental owners in Austin to have a valid license to rent out their property. So, while the new system makes tax collection easier for many, owners still need to stay on top of their reporting duties and make sure they have all the right licenses to run their rentals legally in Austin.

    What Does This All Mean?

    In the end, this new way of collecting hotel taxes for short-term rentals in Austin is a big change in how the city deals with this growing part of its tourism. Travelers might see a small bump in the cost of their stay, but this should help make things fairer in the lodging market and bring in money for important city services. For owners, the big websites will now handle most of the tax stuff. But they still need to keep up with reporting to the city and making sure they have the right licenses. As Austin keeps growing, how it manages short-term rentals will keep changing. For everyone involved – the visitors wanting a cool Austin experience and the owners sharing their homes – staying informed about these changes will be key to navigating Austin’s short-term rental world.

    Key Dates for Austin Short-Term Rental Tax Changes

    DateEvent
    April 1, 2025New HOT collection by platforms (Airbnb, Vrbo, etc.) becomes effective
    July 31, 2025First quarterly report due under new system (for the quarter ending June 30, 2025)
    October 1, 2025Other STR regulation changes effective (regulation moves to Title 4, business regulations)

    Summary of Key STR Regulations in Austin

    Regulation AreaStatusBrief Description
    Tax CollectionEffective April 1, 2025Platforms (Airbnb, Vrbo) required to collect and remit 11% HOT. Owners must also report platform-collected taxes for the first quarter.
    LicensingOngoingRequired for all STRs.
    Regulatory Code LocationEffective October 1, 2025STRs primarily regulated under Title 4 (Business Regulations) instead of Title 25 (Land Development Code).
    ZoningEffective October 1, 2025STRs allowed in all residential areas with a valid license.
    Permit DisplayProposed/DiscussedPotential requirement for STR listings to display city-issued permit numbers.
    Proximity RestrictionsProposed/DiscussedPotential limitations on the proximity of multiple STRs owned by the same person.
    Ownership RestrictionsProposed/DiscussedPotential limitations on the type of ownership (e.g., favoring individuals over corporations).
    State Legislation ImpactOngoingFuture local regulations may be influenced by bills passed by the Texas Legislature.
    Owner ReportingEffective April 1, 2025For the quarter beginning April 1, 2025, owners must report HOT collected by platforms. Ongoing quarterly reporting of direct bookings still required.
  • Port Angeles: Are New Short-Term Rental Rules Leveling the Playing Field, or Just Another Hurdle?

    Port Angeles: Are New Short-Term Rental Rules Leveling the Playing Field, or Just Another Hurdle?

    Big changes arrived in Port Angeles, Washington this past summer. New rules for short-term rentals (STRs) started on July 1, 2024. The city calls it the Short-Term Lodging Business License program. They say it’s meant to control the growing number of STRs. These rentals often stir up debate in towns everywhere. But here’s the real question: Do these rules actually help the people living here? Or is it just more paperwork?

    What Kinds of Rentals Are We Talking About?

    First, let’s be clear. In Port Angeles, an STR is any home rented for less than 30 days straight. The city created two types:

    • Type I: This is when owners rent out part of the home they live in. There’s no limit on how many Type I rentals the city can have.
    • Type II: This is for rentals where the owner doesn’t live on the property. These are the ones getting the most attention. The city first capped these at 200 licenses, or 2% of all homes in the city – whichever number was higher.

    Why make two types? The city seems to want homeowners renting out their own space. They want fewer properties acting just like hotels. That sounds good, right? But what does it mean in reality?

    Safety Steps or Just Hoops to Jump Through?

    Every STR owner now needs a license. Getting one means passing a Fire Life-Safety Inspection. Owners must also give the city detailed floor plans. These plans need to show important safety gear. Think smoke alarms, carbon monoxide detectors, fire extinguishers, and clear escape routes. Plus, owners need liability insurance and must follow a “Good Neighbor Policy.” These seem like smart steps for guest safety. They could also help keep neighborhoods peaceful.

    A Surprising Twist in the Rules

    But wait, there’s more. In August 2024, the city added a twist. A new rule change might let some Type II owners hold licenses for more than one property. Why? These owners need to meet certain rules about following past regulations and when they bought their properties.

    This change made people talk, according to the Peninsula Daily News. And it makes you wonder. Why allow some people to own multiple non-owner-occupied rentals? Wasn’t the point to limit those? Does this new rule help responsible owners who’ve been here a while? Or does it create an unfair advantage? Could it let a few people control many rentals?

    Who Makes Sure Rules Are Followed?

    The city started enforcing these rules on November 1, 2024. They began by focusing on teaching owners and hoping they’d comply willingly. That makes sense – give people time to adjust. But the real challenge is long-term enforcement. Does the city have enough people and determination to check on these rentals? Will they deal with problems quickly? Or will neighbors have to do the policing? Why should residents be the ones reporting issues, instead of the city enforcing its own rules?

    What the Market Looks Like

    Data from Airbtics in September 2024 showed about 280 active Airbnb listings in Port Angeles. Rentals were booked about 69% of the time, costing an average of $176 per night. That sounds like good money for owners. The report called the rules “lenient,” but that might have been before the new 2024 rules really kicked in. Will these new regulations actually change the market? Or is the money just too good to pass up?

    Balancing Tourists and Townspeople

    Looking online, you can find lots of STRs in Port Angeles. They offer places for tourists visiting the beautiful Olympic Peninsula. But as these rentals multiply, what’s the cost to our community? Are we losing homes that local families could rent or buy long-term? Are we trading neighborhood peace for tourist money? Do officials really listening to residents worried about noise, parking, and strangers next door?

    The Big Questions Remain

    Port Angeles took a step by creating these STR rules. That’s a start. But the real story is in how these rules work day-to-day. We have to keep asking tough questions. Are these rules strong enough to protect our neighborhoods? Is the city enforcing them fairly? And the biggest question: Do these rules truly balance tourism benefits with the needs of the people who live in Port Angeles year-round? How the city answers these will show if we’re moving forward or just stuck in the same debate.

    Sources for Regulations: