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The Messy Saga of Short-Term Rentals In Dallas Is Nowhere Near Complete

After about four years of research, the Dallas City Council got its first chance to question a plan to banish Airbnb and other platforms from residential neighborhoods. It created more uncertainty.
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A funky Airbnb in East Dallas that would be illegal if the city passes recommendations from the plan commission. Natalie Goff

That Airbnb on your block isn’t going anywhere anytime soon. That was one of the few clear takeaways on Tuesday evening after the City Council received its first briefing on a long-awaited plan to banish short-term rentals from residential neighborhoods.

Too many questions remain: about the data informing the policy, how enforcement would work, even the baseline of where these rentals can and cannot operate. By the end of a nearly five-hour briefing, which was preceded by about two hours of public comment and 73 registered speakers, there was no clear consensus on the Council about how to move forward. Even the city manager appeared to be working out how to direct his staff after the meeting ended. Six council members said they were ready to vote on the ban. But six isn’t a consensus, and Mayor Eric Johnson wasn’t present for the briefing to herd the cats.

“What I ascertained today is that there is still a lot of ambiguity,” City Manager T.C. Broadnax said near the end of the meeting.

If the ban is passed, about 95 percent of rentals currently operating would be illegal. But zoning short-term rentals out of a majority of the city does not work without regulations and enforcement mechanisms, especially if there are already somewhere around 6,000 operating. Most of those aren’t registered with the city, and they don’t seem to have trouble finding business.

If the Council eventually votes for the ban, the city will spend $1.4 million on nine new employees in code enforcement, which will generate $40,000 in revenue. If the Council denies, it will need to spend $2.3 million on 17 new code enforcement employees who would work into the early morning. Currently, code doesn’t work past 6 p.m. A 24-hour response would require $5.4 million and would generate an estimated $3.58 million in revenue from registrations, fees, and fines.

No matter how the Council votes, the result won’t be like flipping a switch. Interim City Attorney Tammy Palomino said it could take between 18 months and three years to shut down a problem property, since the city would have to sue the owner for operating an illegal land use.

“There are going to be challenges and [an] expectation of enforcement that will not be met at the level I believe the community would expect,” Broadnax said. “It’s a long process to eliminate even illegal land uses.”

But let’s back up.

The gridlock of Tuesday’s briefing began building more than four years ago, when the city started researching how to manage all these homeowners who had begun renting their properties in single-family neighborhoods. There have been three task forces, a zoning review, a white paper, and that City Plan Commission recommendation for the full Council to boot these operations out of neighborhoods where people live.

Problem was, there have been no regulations in place beyond the 2019 requirement that short-term rental operators register their units with the city and pay the requisite hotel tax. That has made it difficult for the city to collect accurate data that everyone on the City Council views as actionable. No regulations also means that the resource-strapped code and police departments are left enforcing the nuisance behaviors that sometimes spill out of these rentals. (Hence, the millions of dollars needed for staffing just to address this issue.)

Dozens of people wearing white shirts with the words “homes not hotels” filled the council chambers on Tuesday. Many had anecdotes of violence, drug use, and other criminal behavior that they associated with STRs.

The folks who spoke in support of the rentals maintained that the problem houses were the minority. Some were elderly men and women who said the revenue from renting their properties helped them afford to pay rising property taxes. Others were younger entrepreneurs who used the extra money to help pay for family expenses.

The City Council is in the middle of these two sides, and the information provided was not sufficient to create a majority on either side of the matter.

“What I ascertained today is that there is still a lot of ambiguity.”

City Manager T.C. Broadnax

“One thing we can all agree on is that the status quo is not acceptable,” said Councilman Chad West, of North Oak Cliff. “We need regulations now, without delay, and we need to shut down the party houses once and for all.”

The land use part of the debate is trickier than the enforcement side. The narrow language in the recommendation from the City Plan Commission basically hems in the Council: either rezone short-term rentals so that they can’t exist in residential neighborhoods or reject that and figure out a more robust enforcement strategy without changing the land use. It appears that the matter would have to go back to the planning body to amend any number of things, like to initiate carve-outs for Airbnbs and the like in multifamily apartments or to require someone to be physically on the site while renters are present.

While the city was spending its time studying, the industry was expanding. Dallas closed 2019 with 73 registered units, City Controller Sheri Kowalski told the Council. There are now 1,774 properly registered that pay their hotel tax. There are another 1,339 potential short-term rentals, to which the city sends letters trying to trigger compliance. Industry data shows closer to 6,000 operating in Dallas. But the city can’t confirm that number because its in-house data comes from the contractor responsible for the registration process. It only knows the properties that have registered with the city and other “possible” locations that it keeps in a list. That’s about half as many as industry analysts estimate.

A lot of the data that inform this debate are noisy. In the white paper from 2020, the city declared that 88 percent of short-term rental addresses had no 911 or 311 calls. But the parameters were drawn for nuisance calls, not reports of violence or drug activity. Councilwoman Gay Donnell Willis on Tuesday brought forth a new analysis that she requested of the city’s 911 administrator, which she alleged showed 7,700 calls for some sort of “major disturbance” at those addresses over the last two-plus years. (In total there were more than 30,000 calls to those addresses, according to the police department.)

The city’s Office of Data Analytics had not reviewed or verified the information the councilwoman presented. But Willis says the office has been assigned that homework project in the wake of the meeting.

The councilwoman said she felt it was important to start with a baseline analysis of 911 calls that extend beyond quality-of-life concerns, even if the data had quirks. “I thought we’ve just got to show a more complete picture here,” she said in an interview after the meeting.

Dallas Police Department spokeswoman Kristin Lowman said the request range was from January 1, 2021 through March 31, 2023. The department identified 33,313 dispatched 911 calls for service out of the 1.38 million total calls across the city during that period. Those addresses accounted for 2.5 percent of all of the department’s calls, and “some of the calls in the data set are duplicate calls for service for the same address.”

The data also came with assumptions, Lowman wrote:

  • That each call is associated with the proper address, and not a neighboring address.
  • The property was operating as an STR during the time of the call for service, and was occupied by a short-term renter at the time of the call for service.

The police department doesn’t prioritize calls based on location. It prioritizes calls based on the alleged crime that is being reported.

There was also disagreement over how significantly short-term rentals affect the city’s housing shortage. The city maintains that they represent less than 1 percent of the housing stock. The pro-ban folks say banning the existing operators would quickly create thousands of new rentals or homes to sell. Broadnax warned his bosses to be careful with drawing opinions from speculation.

Why crawl into these weeds? Because they show how much information the Council is searching for and how it can be interpreted to fit whichever narrative you are trying to present.

In the absence of reliable data, folks on either side are able to craft arguments to fit their agenda. At points during the meeting, the council members in favor of banning short-term rentals in residential neighborhoods asked staff a series of questions just to get an on-the-record “yes.” Like: are we in a housing shortage, Mr. Housing Director? (Yes.) Does a lot of crime go unreported, Mr. Police Chief? (Yes.) The Texas Legislature is also considering a bill that would kneecap a city’s ability to regulate and license short-term rentals, which would preempt whatever Dallas decides. Is it possible for that bill to not pass out of the Legislature, Ms. Legislative Director? (Yes.)

“We need more time,” said Councilman Adam Bazaldua, who represents South Dallas and Fair Park. “I think there have been a lot of unanswered questions and if we go and make this decision because we want to make a decision, there are everlasting impacts as to how we ever want to regulate short-term rentals in our city.”

Those who support zoning short-term rentals out of residential neighborhoods are well organized. They have a nearly uniform talking point. Their anecdotes of the disruption that comes with living next to a problem house are compelling and alarming.

They organized around what they called the KISS Plan, short for the Keep It Simple Solution. Its name is deceptively accurate. Designate Airbnbs and Vrbos and Homeaways and all the other platforms as “lodging uses,” which are illegal in residential neighborhoods. Pass wraparound regulations to enforce this use. Then wash your hands of these short-term rentals. This is what the plan commission sent to Council, a narrowly-tailored solution that would require another plan review to substantially change.

The reality, as shown in Tuesday’s Council briefing, is more nuanced and complex. Fort Worth recently zoned STRs out of residential communities, but is only enforcing on a complaint by complaint basis, staff told Council. InsideAirbnb estimates that there are more than 1,700 active listings in our western neighbor. Proactive enforcement appears necessary to address the root of the issue. And that takes serious money, planning, and time.

City staff will spend the next two weeks trying to answer questions from the horseshoe, before returning for another briefing on April 19. But it’s unclear when it will come time to vote. There’s still, even after four years, more work to do.

Correction: A previous version of this story said that code enforcement does not work on weekends. Code officers work from 7 a.m. until 6 p.m. each day.

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Matt Goodman

Matt Goodman

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Matt Goodman is the online editorial director for D Magazine. He's written about a surgeon who killed, a man who…

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