Texas cities and short-term rental operators have been riding a roller coaster for years, with different courts issuing an array of rulings on whether Airbnb and Vrbo bans can proceed or not.
This month, the 5th District Court of Appeals once again upheld a temporary injunction blocking the city of Dallas from enforcing its ban on short-term rentals in residential neighborhoods. The July 18 ruling came after Dallas asked the appeals court to reconsider a February decision.
Here we are five months later, back in the same place. Now Dallas waits for the case to be decided on the merits.
When the Dallas City Council passed its short-term rental rules in 2023, we were concerned that its partial ban wouldn’t pass legal muster, given favorable rulings for STRs elsewhere. Many Dallas property owners who depend on their investment homes for income made a compelling case, even as we understood the frustration of residents who complained about party houses.
Opinion
We want cities to be able to police STRs, but the legal landscape is confusing. Neighboring Fort Worth, Arlington and Grapevine, which have their own STR bans, have been able to carry on with their ordinances after their own drawn-out court battles.
The Legislature hasn’t weighed in explicitly. However, lawmakers hinted at their support for city ordinances when they passed House Bill 2464 in May. The law curtails cities’ ability to police home-based businesses, but a provision says the legislation doesn’t forbid cities from regulating STRs.
Among the legal issues surfaced by the debate over STRs is the nature of homeowners’ property rights and the question of whether a city’s land use rules are so restrictive as to be akin to seizing private property.
It’s time for the Texas Supreme Court to clarify all of this, for the sake of regulators and homeowners. The high court previously sided with an STR owner in a dispute with a homeowners’ association. In that case, the court said the HOA didn’t have the authority to restrict STRs.
Cities clearly have authority over zoning, but how far can they go? During Grapevine’s legal battle, the city asked the Supreme Court to weigh in. STR owners were also on board, even though court rulings up to that moment had favored them.
“[I]n their response to the City’s petition for review, the homeowners welcome — if not encourage — us to grant the City’s petition,” wrote Justice Evan Young in a 2023 opinion. “Short-term residential leasing is now ubiquitous, they say, and because municipalities across the State have begun prohibiting it, this Court needs to weigh in on the heady constitutional questions at stake.”
The court declined to hear the Grapevine dispute, though Young left the door open to future intervention, writing that other cases were expected given the prevalence of short-term rental restrictions.
As it stands, Dallas can’t enforce its STR ban in residential areas, but its neighbors to the west can. That makes no sense.
If the high court is invited to intervene in another STR case, it should do so.