STR Laws to Change in Austin

AUSTIN — On last Tuesday (August , a federal judge made a decision in a lawsuit brought against the City of Austin regarding its short-term rental (STR) ordinance. This ordinance had prevented individuals from operating an STR without being residents of the property, a restriction that a couple from Houston, Robert, and Roberta Anding, argued unjustly hindered them from listing their Austin home. According to official court documents, Senior U.S. District Judge David Alan Ezra issued a ruling that granted the Andings' motion for summary judgment and dismissed the City's attempt to dismiss their claims.

The City of Austin's crackdown on unlicensed short-term rentals has encountered legal challenges and uncertainties. A spokesperson for the city expressed disappointment with the judge's ruling but emphasized the hope that short-term rental property owners and guests would behave considerately within their neighborhoods. The spokesperson reaffirmed the city's commitment to enforcing its nuisance regulations for short-term rentals when necessary. It was clarified that the ruling did not impact the city's existing nuisance rules, which included provisions concerning noise complaints.

The ruling by Judge Ezra is available for reading in its entirety below:

Link to Ruling

The Andings, who reside in Houston, acquired a six-bedroom property near Lake Austin in 2014 with the intention of operating it as a short-term rental. However, in 2016, the City of Austin implemented an ordinance preventing non-residents from listing properties in this manner.

In a prior case in 2019, the Austin Appeals Court ruled against the city's ordinance, deeming it retroactively unconstitutional. This should have allowed the Andings to apply for a short-term rental license with the city. However, the Andings argued that the city never approved their application, a claim reaffirmed by Judge Ezra's recent ruling.

The Andings' proposed order contended that the city's ordinance unfairly discriminated against non-residents like them, violating the dormant Commerce Clause of the U.S. Constitution. They also requested the judge to declare the city's ordinance unconstitutional.

Patrick Sutton, the attorney representing the Andings, explained that Judge Ezra's ruling granted them victory on two grounds: first, discrimination against interstate commerce, which constitutes a violation of the U.S. Constitution; and second, a win based on the principle of retroactivity, which prevents altering laws after individuals have relied on established rights.

With Judge Ezra's decision, Andings' proposed order was approved.