Dallas Airbnb, VRBO Owners To Keep Booking Guests Following Latest Court Victory

Owners and operators of short-term rentals in Dallas can keep doing business thanks to an appellate court ruling on Friday.

The decision from Justice Yvonne Rodriguez is the latest turn in a legal battle that began in June 2023 when Dallas City Council voted to ban short-term rental (STR) properties, such as you would find through Airbnb and VRBO, in all single-family residential neighborhoods.

The ban, which would have eliminated up to 90% of operating STRs in Dallas, was set to take effect in December of that year, but never did, thanks to the Dallas Short Term Rental Alliance being granted an injunction that prevented the city from enforcing the new ordinance. The debate over how STRs should be handled by the city had raged well before the June 2023 decision, including various task forces and efforts to have STR owners register with the city and pay hotel occupancy tax.

“The Texas Constitution provides: ‘No citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner disfranchised, except by the due course of law of the land," the ruling states. “Appellees have ‘a vested right to lease their properties and this right is sufficient to support a viable due-course-of law claim.’”

Advocates for keeping STRs out of single-family neighborhoods, including groups such as the Dallas Neighborhood Coalition, cite cases where STRs have been used as “party houses” and have created unsafe conditions in some neighborhoods, along with troubles for residents relating to overcrowding and excessive problems with parking, traffic, trash and noise. Those groups also point to the high-profile cases where shootings and prostitution have taken place at party homes in North Texas as reasons for their opposition.

But Airbnb owners and operators and the members of the Dallas Short-Term Rental Alliance, who filed the lawsuit leading to the injunction, say that the ban the City Council approved paints with too large of a brush, punishing the majority of STR operators who act as good neighbors for the sake of eliminating the small minority of bad actors.

A spokesperson for the city of Dallas declined to comment, citing pending litigation. At this point, there seemingly aren’t many options for the litigation to continue, however. With an injunction being granted as well as the appeal being denied, that’s a pair of losses for the city, leaving an appeal with the Texas Supreme Court one the few avenues for the city to take.

“What we’d like to see happen, now that the appeal got turned down, even though we are happy we get to continue operating, our ultimate goal is to sit down with the city and come up with something sensible,” Lisa Sievers, president of the Dallas Short Term Rental Alliance, said on Monday.

Sievers, who owns and operates a pair of STRs, estimates the city has spent more than $3 million on setting up the STR registration and code compliance program, maintaining it and then fighting this case in court. “How many police officers would that have paid for?” she asked.

“And to be clear, I’m not pooh-poohing what the anti-[STR] group is all about,” Sievers said. “I don’t want to live next to a party house, but in the original [STR registration and code compliance] ordinance I helped work on in a STR task force for the city, the owners and operators were going to pay for the registration program that would also include code enforcement on nights and weekends, which is when it’s needed the most and when we have not had it, but the council didn’t adopt it.”

Sievers also doesn’t know what the city is planning to do in terms of responding to this latest legal loss, and a court date to look into the constitutionality of the original ordinance has not been set, but she is sure that this topic will be much discussed in the coming months.

“We do have elections coming up in the spring,” she said. “You can be sure this will be asked about at every town hall meeting with every new candidate.”