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What to Know about Short-Term Rental Laws in Austin, Texas

Every year, countless visitors pack their bags and head to Austin for a memorable getaway. With incredible music festivals, unique neighborhoods, and endless adventures, it’s not hard to see why this Texas town is growing in popularity year after year. All of these people need places to stay, and more are turning to vacation rentals instead of traditional hotel accommodations. This trend is why owning a vacation rental can be such a lucrative pursuit, but you must understand the Texas short-term rental laws first.

As a premier property management company, the staff at Grand Welcome is here to help you make your investment property a success. These perks range from our in-house marketing team helping you earn top dollar to explaining the rules and regulations for operating a vacation rental in Austin. 

What Is a Short-Term Rental

Before diving into the laws, you need to determine if your property is a short-term rental (STR). An STR, often referred to as a vacation rental, is a residential unit or accessory building rented temporarily for less than 30 consecutive days. To operate an STR, you will need to obtain an operating license every year. There are three different types of licenses depending on property type and occupation status.

Properties that are rented out in longer durations, over 30 days, several months at a time, or more, have much less restriction. In this article we will explore everything you need to know about operating a short-term rental in Austin. 

Who’s In Charge

Texas largely leaves the oversight of short-term rentals to local governments across the state. Because of this, rules, regulations, and ordinances vary by area as they are set by each local municipality. If property exists in an unincorporated area, it is likely there won’t be regulations as there is no organization to up hold them.

When it comes to Austin, the city holds relatively strict rules around STRs. There is a hard cap on the amount of STRs allowed within the city, and the permitting process itself is very stringent. Because of these conditions, it is next to impossible to get a new permit for a single family home as a short-term rental in Austin, unless that home is also your primary residence.

There are however surrounding cities, neighborhoods, and suburbs near Austin with little to no STR rules or oversight, making them ideal investment areas to get started. Keep reading to learn more about these unique areas in central Texas.

Austin:

– The City of Austin has three classifications for STRs which are based on type of property and owner occupation of the property. Learn more here.

– No permits are being issued for STRs for single family, investor-owned homes EXCEPT in the following zoning districts: Central Business District (CBD), Downtown Mixed Use (DMU), Planned Unit Development (PUD), General-Retail – Mixed Use (GR-MU), Commercial Services – Mixed Use (CS-MU), Commercial Services – Vertical Mixed Use (CS-V), General Retail – Vertical Mixed Use (GR-V).

– STR permits are being issued for Type 3, multifamily properties i.e. condos. There are caps on the number of STRs allowed in each condo building. If the condo is located in a residentially zoned area the maximum number of units that can have a Type 3 permit is 3% of the total units in the condo building. For condos located in commercially zoned areas, the max number of STR permits is 20% of total units.

– STR permits can be issued for single family homes where the owner has a homestead exemption on the subject property. These permits are used when you live in the home, and want to rent out the entire home from time to time, OR if you only want to rent out part of the home ie. a room or guest house on the property.

Link to more COA restrictions.

Bee Cave:

– No restrictions on STRs.

Buda:

– Permit required.

– Must demonstrate to the satisfaction of the Director of Planning that the unit and property do not have any outstanding issues related to taxes or building, electrical, plumbing, fire, health, housing, police, planning, noise, or code enforcement provisions.

– Must provide proof of insurance and payment of hotel occupancy tax annually.

Cedar Park:

– No restrictions on STRs.

Dripping Springs:

– No restrictions on STRs.

Driftwood:

– This is an unincorporated area with no restrictions on STRs.

Fredericksburg:

– Permit required.

– STR’s allowed in some zoning districts but not all, short term rental use is based on property zoning and type of STR (more info here).

– Properties that received a STR Permit prior to April 1, 2022 are considered “Legal Non-Conforming” uses and allowed to operate conditioned upon conformity with Section 5.401 and Section 6.110, Continuance of a Nonconforming Use.

Click here to view the complete STR ordinance.

Georgetown:

– No restrictions on STRs.

Horseshoe Bay:

– No restrictions on STRs within Horseshoe Bay Property Owner’s Association.

– Some properties are in additional HOAs which may restrict STR use.

Johnson City:

– Permits required for properties located in the city limits or ETJ.

Link to full Johnson City Short Term Rental Regulations.

Johnson City Zoning Map

Jonestown:

– STRs are only permitted in the STR Overlay District.

– Events are not permitted on site.

– Residence may not house more than 15 people at a time.

Kyle:

– No restrictions on STRs.

Lago Vista:

– Must apply for an STR permit if the property is located in any of the following zoning districts: R-1, R-O, RR-A, R-2.

Link to zoning map

– STRs must have two parking spots per dwelling, no street parking.

Link to more details

Lakeway:

– Maximum of 25 single family homes can be used as STRs.

– Current wait time for a permit is 2 years.

– No limit for permits for condos.

Link to Lakeway STR map

Leander:

– Vacation rentals are currently classified as hotels within the City of Leander. You will need to ensure that you have the correct zoning (General Commercial) before operating a vacation rental. Because these are considered a commercial business, the rental would be subject to commercial building standards and permits.

– The City of Leander constitutes a short term rental as anything less than 6 months.

– Leander does not require or provide licensing of short term rentals.

Marble Falls:

– In January of 2021, Marble Falls adopted a short term rental ordinance. This ordinance requires all STR operators to obtain a permit from the city in order to operate as a vacation rental. In order to obtain a permit, owners must demonstrate proof of liability insurance, document payment of hotel occupancy tax, and pass a life safety inspection among other requirements.

The complete rules can be found here.

New Braunfels:

– Short term rentals are not allowed in any residential zoning districts.

– A special use permit must be obtained for all properties located in non-residential zoning districts, except those located in the following zoning districts: C-4, C-4A, and C-4B.

– Short-term rentals are not allowed in the floodway.

– Annual life safety inspections are required.

– Maximum occupancy of two adults per sleeping area, plus an additional four adults.

– A minimum of one off-street parking space, not including the garage, must be provided per sleeping area.

– Visit the city of New Braunfel’s website for more information.

Pflugerville:

– No regulations, but lots of HOAS with rules regarding STRs.

Point Venture:

– Permit required.

– Owners must provide guests with important operation information such as emergency contacts, location of water shut off, parking requirements, trash collection, etc.

View the complete STR ordinance for Point Venture

Link to Point Venture STR Registration Packet

Rollingwood:

– STRs prohibited.

– No rentals less than 30 days

Round Rock:

– No restrictions on STRs.

San Marcos:

– Home Share Rental Registration required.

– Proof that the premises is the primary residence of the applicant, including at least two of the following: motor vehicle registration, driver’s license, Texas State Identification card, voter registration, tax documents, or utility bill.

– Only permits one STR/owner in city limits.

– Occupancy limits

– Required safety features

Link to more details

Sunrise Beach:

– Not permitted.

Sunset Valley:

– Permit required.

– No limitations based on owner-occupancy.

Spicewood:

– No restrictions on STRs.

The Hills:

– No restrictions on STRs.

– There are extensive HOA rules you must follow.

Link to more details

Volente:

– Must apply for a short term rental conditional use permit.

– Maximum number of guests is 2 people per bedroom, +3 additional guests.

– $150 permit fee, permit is non-transferable with a sale.

Link to full details

Westlake Hills:

– Only a homestead owner may apply for a short-term rental special use permit, but may do so for the homestead or another property owned by the homestead owner.

– Only one permit will be issued per homestead, regardless of whether the permit is for the homestead or another property owned by the homestead owner.

– Essentially you must own a primary residence in Westlake in order to get an STR permit, but if you own two homes in Westlake, you can get a permit for the one you don’t live in.
A guesthouse can not be used as a short term rental.

Link to more details

Wimberly:

To obtain a permit to operate a bed & breakfast or vacation rental, an applicant must go through the Conditional Use Permit (CUP) process and receive an approved permit.

The CUP process includes:

– Complete application

– Application Fee (non-refundable)

– The city notifies those within 200’ of your application, publishes in the local newspaper and posts a sign on the subject tract.

– Planning & Zoning hearing for recommendation and City Council hearing for ultimate decision

Per state & local statute, if 20% of property owners within 200′ oppose the application a super majority vote is required by the Planning & Zoning Commission (6 out of 7) and City Council (4 out of 5) for approval.

What Other Important Information Do You Need to Know

Securing your license is only one part of the laws surrounding STRs in Austin. Other things to keep in mind include:

Licenses for Type 2 STRs, not-owner occupied single-family or duplex, are only allowed in certain commercial zoning districts. 

You, as the renter, must provide a packet of information to guests containing things like parking restrictions, occupancy limit restrictions, local contact name and info, noise restorations, and more.

Any promotion or ad must include the STR’s license number assigned by the city and the occupancy limit.

For more information about the rules and regulations for STRs in Austin, visit the city’s website or email STRlicensing@austintexas.gov. 

Let Knowledgeable Experts Lend a Guiding Hand

Short term rentals in Texas like this one must follow city laws.Several factors go into making your Austin, Texas, vacation rental a success, including understanding the local short-term rental laws. While Grand Welcome is a national brand, each location is locally owned and operated. This means when you list with us, you are working with someone who knows the ins and outs of Austin.

To learn more about the tools you gain access to by listing with us, call 855-238-8981. You can also fill out our free online revenue projection form.