“The family got tickets to the Dallas games!” Your friend, whom we will name Mateo Pérez for the sake of this exercise, says via Facebook Messenger, “There are 14 of us coming to town. Where should we stay?”
First, you should be a good friend and tell Mateo that his World Cup experience will revolve around the suburban hellscape that is Arlington, rather than Dallas. Then, you’ll need to let him know that if he’s looking to find an Airbnb or VRBO near the stadium, he’s likely SOL.
“Prepare to spend a chunk of your trip crawling through Interstate-30 traffic,” you tell Mateo. “The real North Texas experience!”
Nine matches of the beautiful game are scheduled to make their way to town next summer, but finding a place to stay may prove tricky for Mateo and the other four million soccer fans expected to come to town for the games. That’s because bans on short-term vacation rentals in Grapevine, Arlington and Fort Worth have cut out a chunk of where those fans can stay during their visits.
Open up Airbnb, and you’ll see a swath of rental-less land stretching west of Dallas. Sure, a few rentals remain in each city’s respective entertainment districts, but the options pale in comparison to the thousands of available homes listed across Dallas, much to the city’s chagrin.
For years, Dallas has been working to implement an ordinance that would wipe out nearly 95% of the city’s STR supply. Though the Dallas City Council passed two measures in June 2023, rental operators sued the city, and the case has since been held up in court. The two latest rulings suggest that Dallas has its work cut out if it truly hopes to get the city off Airbnb.
So why did Fort Worth and Arlington get to codify what Dallas hasn’t been able to? The answer, like most city matters, is a confusing one. What’s clear is that the city has found itself trying to hike up a hill that changes shape and size depending on the day.
The Battle Between Land Use and Property Rights
On paper, Arlington's and Fort Worth's regulations on short-term rentals passed in 2019 and 2023, respectively, are similar to Dallas’. All three cities define short-term rentals as lodging available for fewer than 30 days. Whether that lodging is a house, an apartment, an accessory dwelling unit or a condominium doesn’t matter. Like Dallas attempted to do, Arlington and Fort Worth have outlawed the operation of short-term rentals in residential areas and cracked down on what is allowable in designated entertainment districts.
All three cities require STR operators to register with the city and pay an annual hotel occupancy tax. And all three cities have faced litigation launched by disgruntled rental operator alliances that claim the regulations violate those operators’ constitutional rights.
However, Texas courts have sided with the city in each case for Arlington and Fort Worth; Arlington’s litigation went all the way to the Texas Supreme Court before it was given the thumbs up for good. Not so much the case for Big D, which has unsuccessfully attempted to appeal a Dallas County judge’s injunction on the ordinance twice this year.
(Adding to the confusion is that the Texas Supreme Court declined to rule on yet another strikingly similar case out of Grapevine. A Tarrant County Court eventually made the final ruling in favor of the city.)
The decision in the Fort Worth case, which came in March, shows that the city's zoning-focused approach to regulation was a good strategy. Judge Josh Burgess of the 352nd District Court ruled that Fort Worth was well within its right to effectively ban short-term rentals by codifying STR regulations into the city's zoning code.
“The issue before the court is not whether the court would have implemented the same zoning ordinance as the city,” Burgess wrote in his opinion. "The issue is whether the city had the authority to make the decision it made."
Dallas’ Legal Situation
While Fort Worth and Arlington built their STR regulation framework into the cities’ respective zoning codes, something that courts tend to respect the right of a city to do, Dallas took a two-pronged approach. One ordinance is in the zoning code and states where STRs can operate. The other was put into the minimum property standards code regulations, and details how the rentals should be registered with the city and pay into the hotel occupancy tax.That means that a ruling like Burgess' might have set a precedent if Dallas’ swing was purely zoning-related, but the registration provision was regulatory in nature, which means operators have more ground to stand on with the private property rights argument.
Yet another complication in Dallas’ case is that the city was sued over the STR ban before it could go into effect. Because of that, a Dallas County judge agreed to grant an injunction in the case, which kept Dallas from enforcing the ordinance until a court has determined its legitimacy. That injunction is what the city has appealed twice, meaning that after two years of litigation, the legitimacy of that restraining order has been debated in the courts, not the actual law itself.
Judges seem to agree that the council’s two ordinance approach overstepped the city’s jurisdiction and went too far in violating the rights of existing operators. Those operators claim that the putative nature of the ban hurts good and bad actors alike. Unlike Dallas’ western neighbors, City Hall was already requiring STR operators to register with the city and pay into the Hotel Occupancy Tax, which means that, for a time, the city did seem to imply to operators that they were running their businesses legally. (The city estimates that around 1,500 STRs were not registered with the city or paying into the hotel occupancy tax.)
That’s where the legal waters have gotten truly muddied in Dallas’ case. If Texas loves one thing, it’s the rights of private property owners.
“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," wrote Justice Yvonne Rodriguez in a decision that sided with operators in February. “Appellees have ‘a vested right to lease their properties and this right is sufficient to support a viable due-course-of-law claim.’”
STRs were on Wednesday’s City Council agenda, but because the discussion was held in closed session, it’s impossible to know what progress was made. The city could take this to the Texas Supreme Court, which has proven inconsistent in ruling on short-term rentals, or they could drop this whole thing entirely and try again, taking a page out of the code books of Arlington, Fort Worth and Grapevine.
Dallas always knew this would end up in litigation. They just likely didn’t think they’d be on the losing side.
“I’m just saying, I don’t fear courts,” said former Council member Carolyn King Arnold when the issue was before the council in 2023. “Let’s dress up and go.”
Arnold’s time at the horseshoe ended in June, when she termed out of the District 4 seat.
The short-term rental debate, however, remains.
