Lack of Grace Period in Austin’s Ordinance on Short-Term Rentals

Short Term Rentals Ordinance

Courtesy of

[Alvin Brickman for Metrosetter Wire]

Now that Austin’s short-term rental ordinance has taken effect, some property owners are expressing their concerns about the unexpected complications they’ve been faced with as a result of the now-required application process.

Farzad Marshhood of reported that “only four houses out of an estimated 1,500 short-term rental properties had the required license (which costs a total of $476) to operate as of Wednesday,” two days before The Austin City Limits Music Festival takes place (from October 12th to October 14th), which means that the vast majority of people renting their homes during the festival are breaking the law (2012).

However, if the homes – of those owners who don’t currently live in them – “weren’t used as short-term rentals before June 14, 2011, the owners are barred from registering the properties until January” (Marshhood 2012).

One such renter, Melanie Martinez, spoke about her predicament: “I cancelled my (F1) rental. It was $600 a night for 5 nights,” she said. Her guests “were upset because now they have to stay at a hotel on the outskirts of town.” The city “left out a very important part of the ordinance, which is the grace period of enforcement” (Marshhood 2012).

Unfortunately, city staff members have not officially said what would happen to someone like Ms. Martinez in January if they are found to have rented illegally in the past three months. “I don’t have an answer for her. I can’t tell her to do it. And if she does it anyway, she runs the chance of getting caught,” said Jerry Rusthoven, a manager in the city’s planning and development review department (Marshhood 2012).

Austin City Limits Music Festival, courtesy of

Yes, it is unfortunate that this three-month window occurs during the heavily attended ACL Music Festival and Formula One race, but property owners like Ms. Martinez have had a significant amount of time to prepare for extenuating circumstances. The Austin Planning Commission voted to begin exploring how to regulate short-term rentals in July of 2010, over two years ago, so it’s not as if this was sprung on them unfairly and without warning (Marshhood 2012).

Joel Rasmussen, president of the Austin Rental Alliance, said, “I think that’s a very strange position for city staff to put people in” (Marshhood 2012).

But the position in which they’ve been “put” isn’t strange at all — the choices are very clear: Property owners who are in the same situation as Ms. Martinez can either (1) kill their current rental agreements, abstaining from renting their properties until January when they’ve acquired a permit; (2) honor their rental agreements while risking the chance of getting caught, and accepting whatever consequences (pleasing or unpleasing) they encounter in January during their application process; or, if they don’t like either of those two, (3) get out of the business of renting their property short term.

Is that too austere of an assessment? Share your thoughts below.

Works Cited

Mashhood, Farzad. “As Austin Short-term Rental Rules Take Effect, Hundreds Breaking Them during ACL Fest Weekend.” As Austin Short-term Rental Rules Take Effect, Hundreds…, 10 Oct. 2012. Web. 12 Oct. 2012. <>.

Images Cited

Austin City Limits Music Festival. Digital image., 2011. Web. 12 Oct. 2012. <×272.jpg>.

Short-term rentals. Digital image., 8 Oct. 2012. Web. 8 Oct. 2012. <>.


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