In important win for Austin homeowner, federal court strikes down City of Austin Short-Term Rental Ordinance
On August 1, 2023, the U.S. District Court in Austin, Texas struck down the City of Austin's ban on short-term leasing by non-resident owners.
My clients, the Andings, live in Houston. They bought a second home in Austin in 2014. They sought to rent it out when not using it. The City of Austin in 2016 banned anyone who is not a permanent occupant of their Austin home from renting out that home.
In 2019, the Austin Court of Appeals (state court) struck down this ban on non-resident owners on the basis that it took rights away retroactively in violation of the Texas Constitution, but the City of Austin still refused to allow non-resident owners to rent out their homes for short terms, asserting that the 2019 decision was narrow, applying only to owners who already had licenses as of 2016. The Andings still couldn't get their STR license.
In late 2022, separately, the 5th Circuit U.S. Court of Appeals struck down a similar ordinance in New Orleans on the basis that it unconstitutionally discriminated against interstate commerce.
Despite all this, the City of Austin still refused to issue my clients, the Andings, a short-term rental license.
With the 2022 5th Circuit precedent in hand, the Andings filed suit in federal court in Austin. On August 1, their claim was vindicated. The federal court struck down the Austin STR ban on two separate and independent bases — retroactivity per the 2019 Austin Court of Appeals authority, and interstate commerce per the 2022 5th Circuit U.S. Court of Appeals authority.
As of this writing, with the federal court's decision only a week old, it is unknown what Austin will do. It can appeal, or it can finally throw in the towel now that state and federal courts have invalidated the monopoly on short-term rentals it gave to permanent Austin residents at the expense of everyone else in the United States.
My clients, the Andings, live in Houston. They bought a second home in Austin in 2014. They sought to rent it out when not using it. The City of Austin in 2016 banned anyone who is not a permanent occupant of their Austin home from renting out that home.
In 2019, the Austin Court of Appeals (state court) struck down this ban on non-resident owners on the basis that it took rights away retroactively in violation of the Texas Constitution, but the City of Austin still refused to allow non-resident owners to rent out their homes for short terms, asserting that the 2019 decision was narrow, applying only to owners who already had licenses as of 2016. The Andings still couldn't get their STR license.
In late 2022, separately, the 5th Circuit U.S. Court of Appeals struck down a similar ordinance in New Orleans on the basis that it unconstitutionally discriminated against interstate commerce.
Despite all this, the City of Austin still refused to issue my clients, the Andings, a short-term rental license.
With the 2022 5th Circuit precedent in hand, the Andings filed suit in federal court in Austin. On August 1, their claim was vindicated. The federal court struck down the Austin STR ban on two separate and independent bases — retroactivity per the 2019 Austin Court of Appeals authority, and interstate commerce per the 2022 5th Circuit U.S. Court of Appeals authority.
As of this writing, with the federal court's decision only a week old, it is unknown what Austin will do. It can appeal, or it can finally throw in the towel now that state and federal courts have invalidated the monopoly on short-term rentals it gave to permanent Austin residents at the expense of everyone else in the United States.