Houston's short-term rental (STR) market has been unregulated up until now, but that's set to change by the end of 2024. After prolonged discussions, recent high-profile incidents at STR properties have finally sparked some action. While there's been intense debate about banning STR's, the strong property rights laws in Texas make such a ban a non-starter. Despite this, substantial changes are imminent and will start rolling out this year.

The initial change will be the mandatory registration of all short-term rentals, accompanied by a registration fee. The City of Houston (COH) is enamored with Arlington's regulatory STR model. Arlington is the only Texas city that has successfully withstood legal challenges to its strict STR regulations.

Here is what to anticipate before 2024 ends.

-- $500 / unit fee registration fee.
-- Requirement to register all STR units. COH has telegraphed this move for months.
-- If you're the lessee (and not the deed holder / owner): COH will require written consent by the owner to the use of their property as a STR and to accept liability for taxes if the STR operator does not adequately remit Hotel Occupancy Taxes (HOT) as per local regulations. laws—a responsibility most owners will be reluctant to accept.
-- Expect a grace period of two months once the new regulations are enacted into law.

Arlington managed to defend its STR regulations in court by carefully gathering concrete data and framing its regulations around public safety concerns. Similarly, Houston has published statistics to highlight concerns with STRs: the city counts 10,545 short-term rentals and has logged 7,789 non-emergency 311 calls along with 61,167 emergency 911 calls within 300 feet of these properties from June 2023 to June 2024. Although this data does not demonstrate causation, it indicates that Houston is amassing data to bolster its upcoming regulations and ensure they withstand legal challenges, mirroring the successful strategy employed by Arlington.

As Houston steps into new STR regulations, now is the perfect time for STR operators to craft a proactive strategy, ensuring readiness and resilience in this evolving market.

Lee Hampton, Builder | Developer | STR Operator | Former P&Z Commissioner

Lee Hampton

Houston, Texas

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