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City Hall Seems Nervous About Banning Short-Term Rentals

A vote on how to manage short-term rentals is finally on the horizon. City staff doesn’t seem confident it will be able to enforce a ban.
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By next Wednesday afternoon, the four-year trudge of analyses and debate over how the city should manage short-term rentals such as Airbnb and Vrbo in single-family neighborhoods is set to finally be settled. The new City Council will be sworn in June 20, which means that next week’s agenda meeting is the last chance for the present body to establish policy that will affect their operations.

On Wednesday, Council learned its options during a briefing. The city can choose to enact regulations and collect fees and taxes from operators. Or it can follow the recommendation of the City Plan Commission to make those rentals illegal in single-family neighborhoods. The city would use zoning as a cudgel: categorize STRs as businesses similar to hotels. But the folks responsible for the real work—city staff—don’t seem confident that they’ll be able to enforce a broad ban by way of zoning. Regulations would give the city a mechanism to control the bad actors while collecting revenue for the city, they argued.

“I worry that … we’re adding regulations within the zoning ordinance that are going to either create confusion or inefficiencies with the enforcement piece,” said Julia Ryan, the city’s director of planning and urban design.

Councilwoman Gay Donnell Willis, of Preston Hollow, brought up the nuisance issues: overflowing trash, illegally parked cars, parties, a window shot out at a home on Valley Ridge Road. Councilwoman Cara Mendelsohn spoke of what she declared as “an ongoing invasion of the quality of life in a neighborhood.” She believes homeowners should not have to live next to tourists or other transient travelers, that these rental operations disrupts the community that single-family zoning allows.

But the city of Dallas has collected almost $2 million in hotel taxes from these properties over the last seven months, said Sheri Kowalski, the city controller. Banning STRs would vaporize that revenue stream, and the city doesn’t presently have the money to bring on code enforcement officers to patrol nights and weekends. (They work from 7 a.m. to 6 p.m.) The system would be “reactive complaint-based enforcement only,” and if a call comes in after 7 p.m., Code Enforcement doesn’t investigate until the following day.

Regulating short-term rentals would give the city control over where they can operate, how close they can be to one another, and whatever other enforcement mechanisms it can come up with to try to control how people rent them. Meantime, the city of Dallas would be able to collect fees and taxes to pay more code officers.

During a previous briefing, the city laid out the cost of a ban. If STRs are zoned out of neighborhoods, City Hall would need to spend another $1.4 million on nine new code enforcement employees while only generating $40,000 in annual revenue. If it went the regulation route, it would spend $2.3 million on 17 new code employees. Allowing STRs to operate would bring in an estimated $3.58 million, allowing for more flexibility in funding enforcement. (Overnight hours would be expensive, however. Staff estimates that to cost $5.4 million.)

The entire debate over STRs highlights the difficulty municipal governments are having as they try to contain the rapid ascension of the sharing economy. Councilman Omar Narvaez compared the short-term rental issue to the scooter mess from a few years ago, when, he said, the operators “would make all these empty promises” that led the City Council to ban them. But scooters can be picked up and removed. Homes are here to stay, and regulating how their owners use them is difficult.

“The STR operators have proven that they will tell us anything we want to hear,” Narvaez said. “They’ll say anything they want to say in order for us to let them stay here in the city of Dallas.”

Narvaez and Willis, who represent neighboring districts, spent their weekend dealing with a house party that ended in gunshots. Videos showed that the event spilled out from the 1,400-square-foot home on Valley Ridge and into the yards and street. In one video, several women danced and taunted homeowners as dozens of people milled around outside and along the street, sometimes in the yards and driveways of neighboring homes.

On NextDoor, neighbors were angry about two things: short-term rentals and the police response to the 911 calls about the party and the gunfire. (Willis said there were 21 calls to 911, and Dallas police responded within three minutes once the call was escalated to the department’s highest priority.)

But here’s where things get tricky. According to news reports, the owner of the home was unaware that the home was listed as an STR. Mark Bloom told NBCDFW that he was “absolutely horrified,” and said that he only rents to long-term tenants. He said he planned to evict the tenant.  

The ordeal in Midway Hollow shows the degree of difficulty in regulating or even banning short-term rentals. It is difficult to confirm that the home on Valley Ridge Road was actually on any of the usual STR platforms. Short-term rental watchdogs shared screenshots after this story ran showing that it was listed, but had been pulled down.

“It was advertised on social media and someone recovered an invitation that was professionally printed,” said neighbor Ted Gangi. “Clearly somebody has this organized.”

A look at TikTok found several houses in Dallas advertised as “great for events.” At least one appeared to be available for rent directly from the poster and not on any STR platform.

Gangi said that the time it took police to respond was more troubling than the presence of an STR in the neighborhood. He said he expressed that opinion during a community meeting when his neighbors steered the conversation to banning STRs. 

“I just piped up and said, ‘I don’t know about anybody else, but I don’t know how much we can do about short-term rentals, but there’s just a lack of response by the police that’s just horrific.’ It’s just awful. And all they had to do is drive by once to break up the party,” he said.

Dallas police don’t respond to calls based on the location. They respond to calls based on the severity of what is being reported. The city’s top data analyst, Brita Andercheck, told Council on Wednesday that the data the city has regarding 911 and 311 calls to short-term rentals is so lacking that she was uncomfortable providing percentage comparisons with calls from owner-occupied homes.

Instead, she focused on totals: out of 43,673 public safety and nuisance-related calls in the first four months of the year, 1,216 came from residential STRs.

“A percentage without context can be enormous or it can be small,” she said. “That’s why we chose to present it in terms of [total] calls, so that everyone reading could understand in a very tangible way what that difference was and then draw a conclusion.”

City Manager T.C. Broadnax said that staff would spend the next few days crafting a recommendation, which Council could choose to support or ignore. It seems like they will advocate for coming up with a series of regulations and fines rather than an outright ban. That won’t go over well with some of those who have spent years organizing to zone these out of existence under the banner of “Homes Not Hotels.” They believe the issue goes beyond party houses; they don’t want short-term rentals near them at all, whether they’ve had dozens of 911 calls or none.

But it’s clear the city believes a ban doesn’t come with a way to enforce it, while regulations give Dallas a chance to contain them.

Editor’s Note: This story was changed to add context to Councilwoman Mendelsohn’s opinion on short-term rentals.

Authors

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…
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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