HOT under the collar? P&Z tackles short-term rental discussion in Kyle

Regulating short-term rentals (STRs) in Kyle continued Feb. 27 as the city’s Planning and Zoning Commission continued an ongoing conversation on the topic.

P&Z commission members discussed the STR definition, history, potential issues, and possible regulations. One regulation discussed was the implementation of a Hotel Occupancy Tax (HOT). The state of Texas charges STRs six percent of the price of a room, and the city of Kyle would be able to charge an additional one percent.

P&Z commissioners also felt regulations of noise, parking and safety issues might already be addressed in current city ordinances. The Kyle City Council originally addressed STRs in February due to neighbor complaints.

Ruth England, a Kyle resident who spoke in favor of STRs, said she has rented out her house in Kyle for the past year-and-a-half when she goes out of town.

England said people come to Kyle to stay in STRs for big Austin events like South-by-Southwest, local weddings, or for Texas State graduation ceremonies. She also tries to promote local businesses to renters and also provides a list of local restaurants.

P&Z members agreed that an outright ban of STRs would open up the city to litigation. However, the approach on regulation and enforcement remains unknown at this time.

Over the past few months, Kyle city leaders and officials have taken up the topic of STRs and whether or not they’re prohibited under city ordinance. 

While STRs are not explicitly stated in city ordinance, city officials took the position they are not allowed. Currently, the city restricts STRs in areas zoned residential, while STRs can operate in areas zoned commercial.

Online rental sites such as Vacation Rental By Owner (VRBO) and Airbnb allow minimally regulated home and room rentals. A search on Airbnb’s website showed 300 rentals available in Hays County, and around 25 just in the downtown Kyle area.

After sending out a newsletter in January to residents that STR are not allowed in residential areas, city council directed the P&Z commission to study the issue in more depth.

It was originally thought that STRs would fall under commercial zoning because renters make money off of their property.

In 2017, however, the Third Texas Court of Appeals decided that an STR does not turn a property into commercial use.

Obtaining public opinion on the issue is the next step for Kyle’s P&Z, which will involve conducting community outreach with town hall meetings and sending out a survey.

After survey results from community outreach are received, P&Z will present their results, and potentially a recommendation, to city council on STRs

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