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US: A Dallas-area appeals court has ruled that the city can’t enforce two ordinances banning the operation of short-term rentals in some parts of Dallas.
In a judgement which affirms a trials court’s decision last year, the court found the plaintiffs — a group of property managers in Dallas — would face “irreparable injury” if the city went ahead with enforcing the ordinances, which would ban rentals in single-family residential neighbourhoods.
Writing an accompanying opinion for the Fifth Court of Appeals, Judge Yvonne Rodriguez highlighted the language of the ordinances, which state they “take effect immediately” — in possible violation of the plaintiffs’ property rights while the case moved forward.
“This evidence supports the trial court’s finding that without injunctive relief, appellees would suffer probable, imminent, and irreparable injury to their vested property rights,” Rodriguez wrote in the opinion.
The city also argued that more than half of rental property owners weren’t paying a required hotel occupancy tax to operate, but the court said the city had no evidence to support those claims.
The legal battle began in 2023 after the city council voted to approve the two ordinances limiting vacation rental operations in the city. The ban was put on hold by a Dallas County judge after the alliance and a group of rental operators sued the city, claiming the new regulations violated the state constitution.
Lawyers for Dallas STR Alliance said in November the limitations would lead rental owners to bankruptcy because more than 90 per cent of rental properties are in single-home residential areas, and argued they were entitled to their rights as homeowners. The city argued the operators aren’t homeowners because STRs are more akin to hotels.
Dallas is one of several cities in Texas challenging how short-term rentals should operate.
Restrictions have been imposed in Fort Worth and Plano, and this week, city council members in Austin proposed an ordinance that would require short-term rental websites to mandate owners provide a license number before renting their homes. The city is also proposing short-term rentals pay a hotel occupancy tax.
“We currently have no real leverage over an unlicensed operator of an STR,” said Council Member Chito Vela, who represents parts of Northeast Austin. “The changes will bring everybody under the city’s licensing scheme.”
A city license costs roughly $800. If the ordinance passes, the city would require short-term rental websites to mandate owners provide a license number before advertising their homes for rent.
“We are effectively playing whack-a-mole,” said Daniel Word, assistant director with Austin’s Development Services Department, told council members last week. “Trying to locate the properties that are operating, that put up an advertisement, then take it down and then put it right back up.”
Houston is also considering STR regulations that would require registration of all short-term rentals, mandate posting emergency information inside units and implement violation fees.
