J. Patrick Sutton Cases & Issues Blog

The City of Austin's Kafkaesque Short-Term Rental License-Denial Scheme

Based on what I see in my practice, the City of Austin appears to be systematically trying to prevent further Type 1 (owner-occupant) short-term rental licenses. When homeowners pay for an STR license and comply with all the requirements, the City of Austin doesn't then issue the license. It keeps people's money, but it then apparently uses the information it has just gotten to do drop-in inspections on the applicant's home. If an inspector observes someone there that the inspector may believe is a renter (whether confirmed or not), a notice of violation gets issued. The notice of violation then serves as the basis for the City of Austin to deny the homeowner the STR license the City refused to issue when it was paid for! Then, when the homeowner tries to figure out why the City won't issue the license, the homeowner gets a runaround — "complaints have been made" and other vague explanations — and cannot get a satisfactory answer as to anything. At the Code Department internal appeals process, the department pulls out a file full of information that was never previously provided to the homeowner, ostensibly with many "complaints." The appeal is denied.

So, while Type 1 short-term rentals are supposed to be legal in Austin, the City is now making them
de facto illegal by blocking the issuance of licenses.

Stay tuned for further developments.
J. Patrick Sutton Cases & Issues Blog