A recent Texas Supreme Court ruling could have an impact on Kyle’s plans for short-term rental (STR) regulation.
On May 25, the court ruled in favor of homeowners who rent their homes as a STR, categorizing the temporary rental as a residential use.
The ruling came after San Antonio homeowner Kenneth Tarr brought a case to the court because his homeowners’ association, Timberwood Park Owners Association, told him that using his house for STR violated his deed restrictions.
The homeowners’ association made several arguments, including that STRs did not constitute a residential use, but instead a commercial one in which the home was operating like a hotel. Tarr maintained that his renters were eating, sleeping and using his home for residential uses and his property was acting just like any other long-term rental.
Justice Jeff Brown wrote in the court’s ruling that Tarr’s use of his home as an STR doesn’t qualify as a commercial use. He also wrote that so long as occupants who rent Tarr’s home use it for a “residential purpose,” no matter how long, “neither their on-property use nor Tarr’s off-property use violates the restrictive covenants in the Timberwood deeds.”
The ruling is expected to affect Austin’s STR ordinances, which were enacted in 2017. STRs that wish to operate in Austin must apply for a license before they can operate.
The ruling could also potentially overturn what city officials in Kyle had previously established, which is that STRs require a commercial zoning to be used in the city.
Howard Koontz, planning director for Kyle, said professionally, he has not picked a side in the ruling, but he is diametrically opposed to the court’s finding that STRs are not commercial use.
“I don’t find there to be any truth in what they said. I do believe you can use your house for commercial purpose. Not necessarily how you use your home, but the purpose of how the home is being used, that’s the fundamental question they failed to address,” Koontz said.
The hotly debated topic in Kyle first came about after the city announced in a Jan. 26 weekly newsletter that STRs are not allowed in neighborhoods zoned residential.
In February, the Kyle City Council directed the city’s Planning and Zoning Commission to further look into STR regulations statewide and make a recommendation to council.
P&Z planned on finalizing a report on its research findings at a May 22 meeting. However, the action was delayed until June 12. If P&Z recommends the report at the meeting, then city council will receive a presentation on the findings on June 19.
“I don’t know what this means for Kyle moving forward, because I don’t know what the council’s expectation is for short term rentals,” Koontz said. Koontz does not expect the issue to extend past July.