More than half of all short-term rentals in Dallas will be banned when the ordinance goes into effect at the end of 2023.
Dallas defines a short-term rental (STR) as “a full or partial rentable unit containing one or more kitchens, one or more bathrooms, and/or one or more bedrooms that is rented to occupants for fewer than 30 consecutive days or one month, whichever is less, per rental period.”
When Dallas City Council voted to ban STRs in single-family neighborhoods back in June, many registered owners were left wondering about the impact it would have on their rental income and their ability to operate in non-permitted zoning areas, namely single-family neighborhoods.
Under the new ordinance, registered STRs are allowed to operate in areas zoned for mid-range office, general office, multifamily, central area, mixed-use, multiple commercial, and urban corridor districts.
STR owners operating in non-permitted zones will have until December to phase out their residential rental listing before the City’s code enforcers start carrying out the ban.
No exception was made for owner-occupied properties, according to registered STR owner Jeff Veazey.
“I thought there would be some sort of grandfathering, or there would be some sort of carve out for owner-occupied,” which is “really the key distinction here,” he said, according to The Dallas Morning News.
Veazey and his wife operate a small STR in Dallas’ Old Lake Highlands neighborhood. The rental income generated from their STR was going toward the couple’s retirement, but after the ban goes into full effect later this year, Veazey and his wife will have to find an alternative form of supplementary income, the DMN reported.
This has caused the couple “a huge amount of turmoil,” Veazey told the DMN.
Veazey asserted that Dallas City Council failed to do their due diligence when casting their vote.
“They didn’t have the courage, intelligence, or compassion, to deeply understand the problem,” he said to the publication.
STRs were banned due to multiple considerations, especially complaints of crime. As reported by The Dallas Express, neighbors claimed STRs were magnets for shootouts, raucous parties, and drug use.
The STR market in Dallas has grown at an annual rate of 44% and by more than 600% since 2016, according to Murray Cox, founder of Inside Airbnb, an independent, non-commercial platform that tracks Airbnb data.
Around 1,900 registered STRs were operating in Dallas in June, roughly 100 units more than in May, according to a City document recently obtained by the DMN.
Of the almost 2,000 registered owners listed in the City document, about 65%, or 1,200 units, will have to shut down by the end of the year. Around 650 units, or about 33%, reside in districts where they are authorized to continue to operate.
While Dallas may have nearly 2,000 registered STR owners, Cox believes the actual number might be closer to 5,300.
That’s because it’s not just one unit for each registered owner, according to the documents obtained by DMN. In reality, just eight Dallas-based entities seemingly account for 100 registered rental units. Most of these STRs are located in only five Dallas-area city zip codes.
