How will the City regulate Airbnb rentals?
Jerri locke converted a garage into a small house in her backyard after her elderly parents both fell ill at the same time.
She built it to be wheelchair accessible and with perfect details for them to live comfortably. But then their health improved, so she put the place up for short-term rental on Airbnb. Most of its tenants are business travelers, she says. Once, two young women rented it and came home so drunk at night that they couldn’t find the house from the back. But in two years, this is the worst problem she has had with tenants.
A bigger obstacle is the city of Dallas.
When she opened Airbnb, she was confident she was following the regulations. The app automatically collects Texas sales tax and requires virtually no accounting from the host.
But in 2019, the City realized that it was not collecting its 7% hotel occupancy tax on short-term rentals. Locke and other hosts on sites like Airbnb, Homeaway, and VRBO have started receiving bills from a company the city hired to collect back taxes.
Between November and February, the City collected $ 245,000 in overdue hotel occupancy taxes from short-term rental hosts; the tax goes to Visit Dallas, the city’s convention and visitor bureau. It is unclear how the City calculates rental tax arrears which, in some cases, have been operating for years.
Going forward, the city requires Airbnb hosts to pay taxes quarterly by check, rather than allowing rental apps to collect the tax, as the state of Texas and other municipalities do. The Dallas City Comptroller’s Office did not respond to questions submitted to the public information office.
Some owners, including Locke, raise their hands. “It’s complicated, and it’s been so easy,” Locke says. “I’ll probably stop. “
A city council committee recently formed a task force to investigate how the city should regulate short-term rentals. Currently, all that is required to run an Airbnb in Dallas is to register it and pay hotel occupancy tax.
Complaints about “nuisance” rentals, where absent hosts allow revelers to take over properties in otherwise quiet neighborhoods, have prompted city council members to take action.
But at a hearing in February, some argued the City already had ordinances on noise, overcrowding and other complaints neighbors have about short-term rentals. Calling 911 for noise or 311 for code complaints should fix the problem, but neighbors say it’s not enough.
“It’s complicated, and it was so easy.
Short-term rentals are proving difficult to regulate for cities. In 2016, the city of Austin imposed strict rules for short-term rentals, including a ban on short-term rentals where the owner does not live on-site.
But a Texas appeals court last year ruled Austin’s short-term rental rules unconstitutional and struck them down.
It’s not just individuals who manage short-term rentals. Businesses are also getting in the game. San Francisco-based Sonder, whose backers include Amazon founder Jeff Bezos, recently entered the Dallas market. The company intends to lease an entire 27-story apartment building in Uptown and operate the 270 units on short-term rental for 10 years.
Small businesses also find additional income through short-term rentals.
AJ Vagabonds, a camping and outdoor boutique in the Bishop Arts District, has a small apartment above their shop.
“The only way to get out of this financially was to create an additional source of income,” said Jason Roberts, owner of AJ Vagabonds.
“Airbnb helps you offset certain costs. This allows us to do the payroll and cover our rent.
Bishop Arts owner David Spence, who owns residential and commercial properties, says he estimates that a short-term rental can earn up to twice the income from a one-year lease. One of its buildings, Emporium Pies, also has a small attic apartment. But he’s renting it out to a long-time tenant because running an inn – marketing it, cleaning it, and washing the sheets – is too complicated, he says.
“We support many companies.
Roberts says small Airbnb hosts have a big impact on tourism in Dallas. “I can go to any Marriott in any city and get the exact same make-it-yourself waffle and do the generic type of chain shopping,” he says.
But staying in short-term rentals allows customers to step into neighborhoods, have a unique experience, and shop locally. Locke and other Airbnb hosts say they are directing their guests to their favorite neighborhood restaurants, shops and services. “We support a lot of businesses,” while earning extra income, she says.
By the time her two daughters finished high school, she was still paying off the debt she had incurred by adopting them in China and had nothing saved for their university. Airbnb helped her educate one of them at Southwestern University. “I couldn’t have done it any other way,” she said.