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Defending Austin Homeowners’ Right to Share Their Homes

May 9, 2018

By Christina Sandefur
May 9, 2018

Home-sharing—renting a room or an entire home from a homeowner, often through an online platform like Airbnb and HomeAway—offers travelers a cost-effective and customizable alternative to traditional hotels. It helps homeowners pay their mortgages and other bills. And it gives entrepreneurs an incentive to buy dilapidated houses and restore them. But most importantly, home-sharing is an important way for property owners to exercise their basic right to choose whether to let someone stay in their home—a right the United States Supreme Court has called “one of the most essential sticks in the bundle of rights that are commonly characterized as property.” That’s why protecting responsible homeowners’ right to rent their homes is one of the Goldwater Institute’s top national property rights priorities.

Unfortunately, the city of Austin has not welcomed this economic opportunity or respected the rights of property owners, but rather joined a growing number of cities that have imposed draconian rules that deprive homeowners of some of their most basic constitutional rights.

Austin’s regulations restrict the number and activity of guests of short-term (but not long-term) rentals, subject home-sharers to warrantless searches, and completely ban homeowners from offering their home as a short-term rental if the home isn’t their primary residence. This hurts communities and punishes the responsible majority of property owners for the potential wrongs of a few irresponsible homeowners.

Our friends at the Texas Public Policy Foundation have come to the rescue, challenging these unfair regulations on behalf of Austin homeowners as violations of the Texas and United States constitutions. And today, the Goldwater Institute filed a brief in support of these homeowners.

Austin claims its anti-home-sharing regulations are needed because home-sharing disrupts neighborhoods and causes noise or traffic. But there’s a problem: even the city’s own studies prove otherwise. But even if home-sharing were causing disruptions, the city’s regulations don’t actually do anything to address or prevent actual nuisances. The ordinance subjects home-sharers to warrantless searches regardless of whether the city has received any complaints about guests and regardless of whether the home is actually being rented out at the time. It prohibits a person from offering her home as a short-term rental at all if the home is not the homeowner’s primary residence regardless of whether the homeowner is on-site during the rental or whether the guests are causing any disruptions. And it restricts the number of people who can be outside and inside the home and imposes a 10pm bedtime on guests (no, that’s not a joke) regardless of whether those people are being noisy. Thus, the city’s anti-home-sharing regulations intrude on property rights without actually keeping neighborhoods quiet, clean, and safe.

Several years ago, the Goldwater Institute won a victory for homeowners when an Arizona court barred the city of Sedona from using similar excuses to justify its anti-home-sharing rules. Arizona law requires cities to pay property owners for unduly burdensome regulations, but exempts land-use rules from the compensation requirement if they protect public safety and health. So, Sedona officials simply claimed that their ban on home-sharing protected public safety. But city records showed that officials adopted the rental ban in order to maintain a “small-town character” where “you know most everyone,” not to prevent any public dangers. So the court refused to blindly accept the city’s justifications.

Texas should follow the Arizona court’s lead. As our brief points out, there is no evidence that home-sharing causes any more disruptions than other residential uses in Austin, and the city relies entirely on broad, unsubstantiated, NIMBY-style public comments to support its claim that its regulations are needed.

Like almost every city in Texas, Austin already has the tools to address genuine nuisances such as noise or traffic problems, without violating homeowners’ constitutional rights. After all, cities do not outlaw all backyard barbecues just because some get noisy, or prohibit all birthday parties or baby showers because guests sometimes take up parking spots on the street. Instead, they rely on existing rules that limit noise, enforce parking restrictions, and proscribe other nuisances. Given Austin’s long history of hosting college students, music and film festivals, and other gatherings, surely the city knows how to curb unruly behavior without resorting to draconian restrictions on property rights.

Additionally, home-sharing platforms themselves provide resources to help neighbors deal with disruptive rental guests. For example, Airbnb opened an online hotline that allows neighbors—anonymously if they prefer—to file complaints about noisy guests, parking violations, and more.

In fact, diverting valuable public resources to policing all home-sharing, instead of enforcing existing anti-nuisance laws, is likely to make things worse by fostering “underground” rentals and creating an atmosphere of snooping and suspicion. That was one reason why police in Nashville, Tennessee, announced that they did not want to enforce that city’s anti-home-sharing restrictions: “Police officers,” they declared, “have plenty on their plates answering calls for service and proactively working to deter criminal activity.”

The additional reasons the city of Austin cites for anti-home-sharing restrictions—protecting the hotel industry and keeping visitors away—are equally offensive. Protecting hotels from competition is not a legitimate purpose of government. If it were, Austin should also prohibit homeowners from friends or relatives spend the night for free, or from hosting dinner parties in their homes, to avoid diverting business from Holiday Inn or Applebee’s. And the desires of locals to keep visitors away is not a proper reason for Austin to limit homeowners’ property rights. Indeed, local officials have often improperly used this excuse to justify targeting politically unpopular groups or individuals.

We hope the Texas Court of Appeals will strike down this anti-home-sharing ordinance. But if it doesn’t, Texas lawmakers can put an end to this local overreach once and for all by following the example of Arizona, which in 2016 passed landmark legislation based on a model law drafted by the Goldwater Institute that protects home-sharing—and the rights of responsible homeowners to use their property as they see fit—statewide.

Christina Sandefur is the executive vice president at the Goldwater Institute.



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