Big Changes Coming for Austin Short-Term Rentals – What Homeowners Need to Know

If you own (or are thinking about owning) a short-term rental (STR) in Austin, big changes could be coming your way. The city is cracking down on unlicensed STRs, tightening up enforcement, and considering new rules that could impact Airbnb and Vrbo hosts.

Why Is This Happening?

Austin has required short-term rentals to have a license since 2012, but here’s the problem—most STR owners don’t have one. According to data from AirDNA, there were about 14,500 STR listings in Austin last month, but only 2,200 of them were licensed. That’s a massive gap, and the city wants to get serious about making sure STRs are following the rules.

What’s Changing?

The city is looking at a few major updates:

1. STR platforms (like Airbnb and Vrbo) may be required to collect and pay hotel occupancy taxes (HOT) directly to the city.

• Right now, STR owners are supposed to pay this themselves, but compliance is low. By shifting the responsibility to the platforms, the city expects to collect an extra $10 million per year.

2. STR owners will need to carry $1 million in liability insurance.

• Airbnb already provides this coverage, but if you use other platforms (or rent directly), you’ll need to secure your own policy.

3. More enforcement of unlicensed rentals.

• If you’ve been running an STR under the radar, it might be time to get legal. Expect stricter crackdowns on unlicensed properties.

What This Means for STR Owners (and Future Investors)

If you already own a short-term rental in Austin, make sure you’re compliant. Get licensed, start tracking your taxes, and review your insurance. These changes could mean extra costs, but they also bring clarity to an industry that’s been operating in a gray area for years.

If you’re thinking about buying a home to use as an STR, these rules are a good reminder to do your homework first. Not every property in Austin qualifies for a short-term rental license, so check zoning laws and city requirements before making a move.

At Open House Austin, we believe STRs can be an amazing tool for building wealth and offsetting homeownership costs—but only when done strategically. Need help figuring out the best way to navigate Austin’s changing STR landscape? We’ve got you. Reach out, and let’s chat!

Source: KUT.org