Rules for short term rentals?

With the possibility of short-term rentals popping up in Dripping Springs, city officials are crafting new rules regulating them.

That process began earlier this month when the Dripping Springs Planning and Zoning (P&Z) commission took up an amendment to the city’s current zoning ordinance.

Within the potential amendment, which was ultimately tabled for a future meeting, city officials sought to create rules for operating Short Term Rentals (STR) and establish under which zoning classification they would fall.

Currently, the city’s ordinance calls for existing regulations to bed and breakfast operations, which usually have the property owner on site. The proposed amendment, according to city documents, would reflect the differences between STRs and B&Bs.

Michelle Fischer, Dripping Springs city administrator, said the ordinance came up after the situation presented itself when city officials researched rental facilities that have not paid Hotel Occupancy Taxes (HOT).

Dripping Springs lodging facilities must pay a HOT of 7 percent on a room or space costing $15 or more per day. That tax is on top of the state’s 6 percent HOT rate.

After searching vacation websites, they found two homes in the Dripping Springs area that were operating as STRs but didn’t pay HOT. Fischer said the two property owners were approached and began to pay HOT.

However, city officials planned to establish regulations in order to avoid a “proliferation of unregulated short-term rentals.” The reason, according to city documents, would be to apply city code and ordinances that ensure “general public safety and welfare.”

Laura Mueller, Dripping Springs assistant city attorney, said the city drew inspiration for its ordinance after looking at STR regulations in other cities.

After ruling out basing its STR policy on Austin’s, which is in litigation, Mueller said the city looked up the regulations within Westlake Hills.

Dripping Springs’ proposed ordinance calls for potential STR operators to apply for a one-year permit that’s renewable for a two-year period.

STR owners must own the property and show proof of current approval under the HOT program, and conform with current city ordinances. Another regulation includes limiting the total adult guest occupancy to two times the number of bedrooms to be rented in the permit.

Mim James, P&Z chairperson, said he liked the occupancy restriction, as STRs wouldn’t have the problem “around college towns where” one person rents the place and has 12 people staying the night.

Several concerns were raised over the possible new rules. One issue related to a minimum two-night stay for all STRs.

Ben Nash, who owns an AirBnB in the Dripping Springs area, said during public comment requiring a two-night stay could affect reservations for STR operators.

Nash said AirBnBs and STRs are popular due to the lack of hotels in the Dripping Springs area. Additionally, he claimed 80 percent of AirBnB guests stay for only one night.

Many attend weddings in the area and don’t stay for more than one evening, Nash said.

Mim, along with commissioner Evelyn Strong, also favored a one-night stay, primarily for those who use it as a business and cater to the wedding crowd.

Mim proposed the addition of outdoor noise restrictions to the ordinance, as it could be an “irritant for neighbors here.”

Commissioners also discussed possible language to exclude properties in certain zoning areas from operating STRs.

Properties zoned as single family low and moderate density (SF-1, SF-2) and agricultural (AG) must obtain a conditional use permit (CUP) to operate a STR. Homes zoned as General Retail (GR), Commercial Services (CS) and Historic Overlay (HO) are not required to obtain a CUP.

One commissioner advocated for adding a minimum number of days before a property is required to apply to become an STR.

City officials, however, said the challenge could become enforcing that law.

“If you advertise and don’t have a permit and in a zoning class, it’s a violation,” Mueller said. “It’s hard to tell who’s renting, but we can find out who’s advertising.”

Dripping Springs’ proposed Short Term Rental ordinance

Permits to be issued for one year and renewable for a two-year period

Only the owner of a property may receive a short-term rental or bed and breakfast permit – renters may not apply. Owner must provide proof of ownership, and certified food manager certificate at time of application and not be subject to any outstanding city or state law violations.

RVs, manufactured homes, and trailers cannot be used as short-term rental or bed and breakfast.

Total adult guest occupancy limited to two times the number of bedrooms to be rented in the permit.  Minimum rental period is two consecutive nights – may be amended to one night.

Permit holders or designated representative listed in the application shall respond to any emergency or disruption at the residence within one hour and be available to respond in person within a reasonable timeframe.

Possible violations include: Rental of a property without obtaining a permit; Knowingly advertising a property or allowing a property to be rented without a valid permit; renting out more bedrooms than listed in permit application.

Conditional use permits are not transferable between properties or future owners of property. Permit holders whose property is ineligible for permit due to failure to collect or pay hotel tax or has outstanding code violations shall have permit suspended upon review by City Administrator. Owner has thirty days to remedy the issue or will have permit revoked.

What could happen if you violate the ordinance?
Class-C misdemeanor with fine not to exceed $2,000

Fee for initial short-term rental or bed and breakfast required to be permitted shall be waived if owner shows property has been operating as a bed and breakfast or short-term rental prior to this ordinance being passed; is current in payment of hotel taxes; and certifies there are no outstanding code violations

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