The following editorial was written for the Dallas Morning News by STR Owner/Operator Vernon Lewis:
Short Term Rentals: Unintended Consequences of Zoning
Dallas City Council will soon be making decisions on short-term rentals (STRs) that will affect the city, its residents and its future. While the issue has been brewing for several years, involving several City Task Forces, it appears that only zoning STRs out of residential neighborhoods is being touted as a solution. This even though no regulations have been in place for city services to enforce, allowing the few problem STR operators to continue without repercussion.
Zoning will not solve the issue of nuisance STRs. They will find another way to operate, be it switching platforms or renaming themselves. Look to Fort Worth who has banned STRs…no problem finding an STR there.
What zoning WILL do is create a financial burden on Dallas taxpayers in the form of enforcement. An April 2023 presentation by Dallas City Staff indicated the cost of enforcing a ban at $1.6M plus $600K annually. As a sidenote, the cost of enforcement with regulations only and no ban moves to zero, if STR registrants pay all costs.
What about all of the affordable housing that will become available without any STRs? City Staff analysis from May 2021 and November 2022 presentations state that STRs are less than 1% of all available housing in Dallas, “it is hard to make an argument that such a miniscule portion of the housing stock is influencing the number of affordable housing units”. Perhaps there will be some STRs going to long term rentals, but with Dallas median monthly rental rates at $1975 (Zillow.com), is this practical for a retail or services industry worker? Further, with current interest rates high new home purchase is out of reach for most.
What zoning WILL do is allow far fewer economical options for transient workers, for those needing a temporary safe haven, for those needing home repairs, visiting relatives or for those looking to buy in the Dallas area. Dallas Housing and Neighborhood Revitalization Director Noguera: “You have many people who come to a city for a short-term basis…If you look at their options, they can either sign a one-year lease or they can take on a hotel, which is very expensive. Short-term rentals provide that interim balance at a much more affordable level”.
Visit Dallas’ 2021 study by Tourism Economics says that “22.5 million visitors spent $4.4 billion across Dallas in 2021, generating a total economic impact of $7.2 billion…This impact sustained more than 43,000 jobs and generated $421 million in state and local tax revenue.” Another study from Tourism Economics for Vacation Rental Management Association states “For every $100 spent on short-term vacation rentals in the Texas metro region, guests spent $141 outside of their accommodations.”
What zoning WILL do is cut spending in neighborhood Mom & Pops that sorely need it to survive. Make no mistake, STR guests are careful with their dollars and won’t “just go to a hotel”. They will go to a suburb where they can stay in an STR at a more economical rate or simply not visit. What zoning WILL also do is eliminate some badly needed HOT funding for the arts. Taxpayers will end up footing this bill also or some of our cultural gems will go wanting.
Neighborhood character is important. A homeowner who is actively involved in their neighborhood is preferred, but not all neighbors are “good” neighbors, long-term rental properties are on most streets, crime happens in all types of housing/neighborhoods and affordable housing is nearly non-existent in most neighborhoods. Zoning STRs out of residential neighborhoods will not create better neighbors or neighborhoods.
If zoning will not work, what’s to be done? There are many ways to regulate STRs without zoning. The National League of Cities’ 2022 Short-Term Rental Regulations: A Guide for Local Governments suggests targeted caps, density/spacing requirements and dedicated additional taxes. None of these potential solutions have been discussed.
Start by simply passing a regulatory ordinance so that enforcement can be ramped up quickly. Amend the existing registration system with 24/7 contact person, 3 strikes and platform cooperation, revisit yearly.
No one wants to live next to a party house, STR owner/operators included…on this we all agree. Let us also agree that zoning will not work.
