Texas Supreme Court Sides with STR Owners

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It may only be a matter of time before strict short-term rental regulations in Texas cities, such as Austin, are a thing of the past (or at least significantly limited). In fact, a Texas Supreme Court ruling on May 25, 2018 could also severely limit an HOA/POA's ability to prohibit or restrict AirBnB-style rentals. The ruling doesn't directly address regulations implemented by the City of Austin and elsewhere in the state. However, it bolsters the case against such ordinances in several major ways. You can see a Texas Tribune article about the recent ruling.

A bill to block cities from heavily regulating short-term rentals made it through the Texas Senate during the last legislative session, but it died in committee in the Texas House. This recent ruling may cause the Texas Legislature to pick up the issue again with increased support during the 2019 session. 

Well, I would celebrate too much....that ruling seems to speak solely to the definition of a “residential use”. HOA’s commonly place restrictions on the length of rentals, how many rentals a year are allowed, etc. and this ruling wouldn’t affect the validity of those rules, although of course plaintiff attorneys will like to say it shows a trend.

Thanks for sharing. This is good news for real estate investors irrespective of whether we like STR or not. HOAs and condo associations have the power to make investor life miserable with their unpredictable bylaws. I support taxing and making STRs pay for hotel like use, but banning outright is bad precedent.

This looks like a nice little win for STRs. In the long run STRs will win. Uber and Lyft fought the taxi cab industry and up-ended that industry. AirBnB and HomeAway will do the same to the Hotel industry. There will be a few cities like Disney's Anaheim and a few other places where the hotel lobby is super powerful and you won't be able to run a STR property. But 99% of the country will be STR friendly in a few years. STRs just offer consumers and property owners too much advantages. It is just a better way to travel for consumers. It is a decent source of income for an owner. And it is super easy for both owner and consumer.

So in the mean time these battles will be fought in courts and legislatures but eventually STRs will win. 

Interesting info,  David.  Good from an investment perspective, but at the same time another example of the tx state govt squashing any attempt by cities (Austin in particular) to exert any local control/regulation.

@Scott Fehrenkamp You say that like conservatives shouldn't be upset about it as well. Isn't the conservative platform based on decentralization and allowing states and even more so for local government to have more control? I'm not here to start a political discussion but it is against some core "republican" beliefs to step in like this. I personally just like for government to stay out of my business as much as possible so I hope that STR are allowed.