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After Years Without Regulation, Dallas Asks What It Can Do About Short-Term Rentals Near You

Dallas is weighing three options for regulating short-term rentals in the city. But which one is the right one?
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Dallas City Council members Wednesday were briefed on two options for regulating short-term rentals in residential neighborhoods, but ultimately asked planning and code enforcement officials to come back later this month with revisions. So we don’t know exactly how the city will address regulating the Airbnbs and VRBOs and the like around town—but it will likely require these short-term rentals to be owner-occupied properties if they’re in residential areas.

I first wrote about the short-term rental market in 2017, after a trip to South Padre Island (more on that in a minute). Not long after, a Dallas homeowner in the Northaven Park neighborhood (adjacent to Withers Elementary School) emailed me to talk about the property owner at a nearby home. This person had listed the residence on Airbnb and parties were happening frequently, the neighbor said. An occupant organized a naked photoshoot by the pool, which was only partially obscured by a privacy fence.

At the time, it seemed that the city was reluctant to interrupt what was still considered somewhat of an experiment. Then-Dallas City Councilman Philip Kingston told me the city’s existing zoning could be applied to the STR market.

“The city has regulations in place concerning single-family detached zoning,” he said. “You can’t have more than six unrelated people living in the same house. But does a short-term rental apply in terms of this ordinance? We don’t know.”

Now in 2022, plenty of homeowners are asking the city to step in and regulate what they say has become a nuisance in their neighborhoods, with some hosts readily marketing homes as ideal spots for large gatherings that happen with enough frequency to really, really annoy the residents.

At Wednesday’s briefing, several homeowners spoke about the issues the largely unregulated Dallas market brings to their neighborhoods. 

“My once-quiet neighborhood has been disrupted by inconsiderate guests that stay at an STR next door to me,” said Hector Escalante, who lives in the Elmwood area. Escalante said that the new owners listed the home on Airbnb because they can “make more money renting it out nightly.”

He said that he checked with the city and was told the owners, who don’t live in Dallas, haven’t registered their STR with the city and aren’t paying Hotel Occupancy Taxes.

“They live in Southlake and do not care about my safety or the serenity of my family,” he said.

Council members said they receive frequent complaints from constituents. West Dallas Councilman Omar Narvaez said there were several listings in the Victory Gardens neighborhood alone, and “half of them are already being advertised as illegal event centers.”

City staff outlined two options. One would update zoning to divide short-term rentals into owner-occupied single-family homes. The other would be the opposite of that. Owner-occupied STRs (in other words, granny flats, ADUs, and garage apartments) would be allowed in all zoning districts. But those not occupied by the owner would be banned in areas zoned single-family residential. Off-street parking would be required of the property owner, and having more than one STR in a single dwelling would be illegal. It would also be illegal to use these properties as an event venue, restaurant, or other entertainment use unless the rental was in an area zoned for that and the property owner is certified to allow such a thing.

The second option would have the same restrictions for parking and events but would allow STRs to continue in all zoning districts, owner-occupied or otherwise.

Oak Cliff Councilwoman Carolyn King Arnold proposed a third option, which flat-out bans STRs in any area zoned for single-family residential.

All three plans had fans on the council. The real debate boils down to whether Dallas should use zoning to keep certain STRs (or all STRs) out of specific areas, or whether it should create tougher regulations. 

Downtown, Uptown, and East Dallas Councilman Paul Ridley said he’d prefer to have the Dallas Zoning Advisory Commission and the City Plan Commission weigh in as well. 

“It’s important that we use that mechanism before dictating what our final regulations should look like,” he said. 

But Dallas Mayor Pro Tem Chad West said time was of the essence, and that it could take another year for the city’s advisory boards to get on the same page as the council without some more succinct direction.

“It’s important for us to say, ‘Here’s where we stand on this,’” he said.

Compounding the problem is the fact that nobody really knows how many hosts there are in the city. AirDNA, which analyzes listings and breaks them down by city and state, says there are 4,884 active listings within the city of Dallas. Airbnb accounts for 64 percent of these. Eighty-nine percent of those listings are entire home rentals, which, again, would not fly under the owner-occupied route.

The city says it has around 1,200 registered short-term rental property owners, which prompted most of the council horseshoe to question how effective any ordinance will be if the city can’t even enforce its baseline registration requirement, which is literally the only current regulation.

“I’m just really not certain that we are even close to having the ability to enforce anything that we do here,” Lake Highlands Councilman Adam McGough said.

In fact, 311 calls regarding STRs are only responded to on the weekends; staff get paid overtime to do so. Dallas interim code compliance director Lynetta Kidd told the council she would need more employees if any of the options on the table were passed, because it “would be a 24-hour, seven-day operation.”

Kidd recommended mandatory registration and an ordinance precluding platforms like Airbnb from listing unregistered properties. She suggested annual registration fees, rules about how close together STRs can be when they’re in single-family neighborhoods, routine inspections, and the requirement for an emergency contact that could respond to any complaints. Properties with more than three citations would likely see their registration revoked.

What Kidd recommended is very similar to what Mesquite did last month, and what other cities have done.

Mesquite crafted an ordinance that addresses parking, noise, and disorderly conduct at rentals. It also requires an annual registration and inspection of the home, and property owners are required to post signs inside and outside the home regarding city ordinances. Those signs will also provide contact information for the property owner in the event neighbors need to reach them. It also limits overnight guests to no more than four to a house, with two adults per bedroom, and on-street parking for two spots only.

Mesquite Neighborhood Services Director Maria Martinez said the goal was to make STRs virtually indistinguishable from other homes in the neighborhood.

“Best case scenario would be that you would not even know that it’s operating,” she said. “Maybe you’ll notice a different car out front. That’s how I would see a compliant short-term rental.”

In South Padre Island, where the population can easily quadruple during spring break, STR rules were designed to cut down on the large parties that were proliferating in beach houses and condos on the island. Leases for STRs must be worded to allow an owner or their representative to enter the rental at any time. Owners are also required to provide contact information when they register the property with the city, and they (or someone they designate) must be able to respond to a police call within an hour, with a copy of the rental agreement in hand.

Denver’s regulations are closest to the third option, the outright ban in residential neighborhoods offered by Councilwoman Arnold. To get into the business in Denver, you first have to get a Lodger’s Tax ID from the city. Once a property owner has that, they can then apply for a short-term rental business license. The city also restricts STRs to owner-occupied primary residences only, and to be listed on Airbnb, the owner must be able to prove they’ve been licensed to do.

Before Dallas looks at zoning, the city should discuss whether it’s made a good-faith effort at regulation. Given that there are potentially 3,600 or so unregistered STRs in the city, and registering and paying the hotel tax is literally the only regulation the city has attempted thus far, the answer is really—if we’re being brutally honest—no.

What does a good-faith effort at regulation look like? Probably a lot like what Kidd outlined, which is extremely similar to what Mesquite and South Padre adopted. I would posit that the biggest tool the city has to improve the ability to regulate STRs is forcing compliance with the registration requirement. That would mean insisting that Airbnb and other platforms no longer list properties that cannot prove they are registered with the city of Dallas (which is what Denver has done). Forcing compliance with that avenue makes it easier to monitor problem properties because the city has a better accounting of its STR roster.

Obviously, living next to properties that are suddenly raging parties on a near-constant basis isn’t anyone’s ideal, and the city needs to do something beyond talk about that. But going from pretty much no rules to almost a complete shutdown ignores the fact that nearly 1,200 hosts have been complying with the one rule Dallas does have.

We can do better than that.

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Bethany Erickson

Bethany Erickson

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Bethany Erickson is the senior digital editor for D Magazine. She's written about real estate, education policy, the stock market, and crime throughout her career, and sometimes all at the same time. She hates lima beans and 5 a.m. and takes SAT practice tests for fun.

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