Ordinances limiting short-term rentals in Dallas amount to a complete ban, a lawyer for local STR owners argued in a court hearing Wednesday.
The argument came up in the Dallas Fifth Court of Appeals, where STR owners were challenging the legality of the two regulations passed in June 2023.
The city says the STR policies are meant to limit where those properties can be in operation. The rules say STRs can’t be rented out in single-home residential neighborhoods.
But more than 90% of STR’s are in single-home residential areas, according to the Dallas Short-Term Rental Alliance, the plaintiffs in the suit. That means the limitations would lead rental owners to bankruptcy, lawyers argued Wednesday.
David Coale, who is representing the Dallas STR Alliance, said at the hearing the city’s ordinances reinforce homeowners’ rights – which STR operators are also entitled to as property owners.
“These are people’s houses,” Coale said. "They own residential properties. They require the space that they have. The overwhelming majority of them, they are in areas zoned for residential use."
Short-term rentals like Airbnb and VRBO were limited in Dallas after the city council voted to ban them from single-home residential neighborhoods last year, arguing they were bringing in parties and crime.
Rental operators almost immediately sued the city, claiming the new regulations violated the state constitution. A Dallas County judge sided with STR operators, placing the ban on hold until the case goes to trial. STRs continue to operate as the lawsuit is pending.
But Andrew Spaniol, a lawyer for the city, argued the STR operators aren’t homeowners because STRs are more akin to hotels, not homes.
STR owners are required to pay a hotel occupancy tax to operate. City officials during a meeting last week said there are about 2,000 known STRs in Dallas and cities collected more than $4 million in taxes – but only 45% of STRs are paying their fees, according to Spaniol.
The lawyer added "actual homeowners” have their rights and expectations, too.
“When they bought their houses in single residential neighborhoods, they reasonably expected that there wouldn’t be a business operating,” Spaniol said. “[They] reasonably expected that their neighbors would actually be neighbors.”
Dallas code inspectors in the past said they received 160 complaints about STRs since last year, citing noise, parking, and litter as the main concerns from residents. Staff said their resources for solutions are limited so long as the injunction is in place.
Some residents who support the ban expressed their concerns at past City Council meetings, complaining about STRs bringing loud parties, litter and parking issues into their neighborhoods.
Some of those residents were at Wednesday’s hearing. Olive Talley, who lives in Dallas supports the ban, said rentals in her neighborhood have caused nuisances and safety concerns.
“You can’t know who your neighbors are if the home next door is a constant stream of strangers that change every day,” Talley said.
Dolores Serroka has lived in her home for 48 years. She said her life and the neighborhood dynamics have changed since STR arrivals in the area.
“Some people argue that there are parties, and those kinds of things go on,” Serrok said. “It was peaceful, we all knew each other, we depended on each other.”
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