Airbnb hosts hope they can eliminate Fort Worth’s reservations about short-term rentals
Lauren Brady wasn’t always an Airbnb host. Before 2016, she used her home to provide shelter for a family member with a disability. But as her expenses continued to rise, Brady found herself unable to financially support them. So she took a dive into the world of short-term rentals and quickly found the extra revenue life-changing.
“It was an answered prayer because it has allowed us to keep her there and keep her safe and even make improvements to the home to make her more comfortable and to adapt to her physical needs,” she said.
But there’s a catch; under Fort Worth city ordinance, short-term rentals in residential areas are illegal. After facing years of public criticism and city citations, hosts are organizing to make their voices heard. Brady created the Fort Worth Short Term Rental Alliance several weeks ago, a 501(c)(6) organization she said will work to bridge the gap between hosts and city government.
“There is a robust hosting community that wants to do things the right way, and they want to be responsible neighbors,” Brady said. “They just want to be able to earn an income with their home and their largest asset.”
A plan put forward by the city manager’s office proposes hiring a third-party data mining firm to determine how many short-term rentals are operating in Fort Worth’s neighborhoods. The report also would include those rentals’ locations, booking frequency and operating characteristics.
The data gathered would help decide whether the city should amend its ordinance to allow short-term rentals in residential areas and begin collecting taxes from hosts.
“I think it’s 100% the right thing to do,” Brady said. “In fact, I think it should be done tomorrow. Any responsible host that is living in fear of their livelihood being taken away, would gladly register and pay taxes tomorrow.”
City missing out on tax revenue from short-term rentals
Traditional hotels are required to pay a 9% hotel occupancy tax in Fort Worth and use an online app to submit their payment and receipts.
In 2018, the city passed an ordinance defining short-term rentals as stays less than 30 days. The ordinance allowed the rentals in mixed-use and industrial areas, which were allowed to register and pay through the app on a voluntary basis, and barred short-term rentals in residential neighborhoods.
The ordinance didn’t stop hosts from renting out their homes in neighborhoods and playing Russian roulette with code enforcement. As a result, no method exists for the city to register and collect taxes from them and no way to tell how much money the city is missing out on.
“We really just need to get a handle on what we are dealing with,” City Treasurer John Samford said.
The app the city uses to collect hotel occupancy revenue was created in the early 2000s. In order to add rentals to the application, staff have to manually enter their information and mark them as a short-term rental.
In fiscal year 2021, Fort Worth collected $23,750,000 in hotel occupancy tax. Only $28,000 of that came from 20 registered short-term rentals. The remainder came from 200 hotels.
Fort Worth draws visitors throughout the year; attractions like the Stock Show and Rodeo, races at Texas Motor Speedway, and annual art festivals keep people flowing in and out of the city on a regular basis.
One solution under consideration is requiring all short-term rental owners to register their properties and pay the hotel occupancy tax on a separate app. While Airbnb collects a state hotel occupancy tax, it has not entered an agreement with Fort Worth to collect the city tax.
Brady suggested the city work with sites like Airbnb and VRBO to start a registration program, rather than shell out money to a data mining company. In Texas, Airbnb already has contract agreements with several cities and counties.
“The city’s proposal to hire a data mining company that could take six months to get that data and would cost who knows how much money feels like red tape that doesn’t need to be there,” she said.
Other Texas cities experiment with data mining, short-term rental ordinances
Several Texas cities have already started using data mining technology. Austin staff collected data in-house and used those results to register and regulate properties. The system allows the city to track and restrict renting at properties with a history of complaints.
In Dallas, city staff initially collected data on its own, but had little success. After hiring a firm, hundreds of short-term rentals were identified. The city currently allows residential short-term rentals, but like Fort Worth, does not require registration. The lack of a concrete accountability system has left Dallas residents frustrated.
“There’s a lot of different options,” Assistant City Manager Dana Burghdoff said. “Fort Worth is not the same as Galveston, for example, with a lot of seasonal visitation, so it won’t be the same answer.”
Arlington opted to create a specific entertainment district where residential short-term rentals are allowed, and outlawed them in other areas. Arlington’s model likely wouldn’t work for Fort Worth, Burghdoff said.
“Short-term rentals are much more spread out in Fort Worth,” she said. “We’ll likely need to have a mix of language (in a new ordinance).”
Residents frustrated by slow code enforcement process
Because short-term rentals aren’t registered with the city, code enforcement officers rely on resident complaints to initiate investigations. Through fiscal year 2021, there were 65 total complaints.
Once a complaint is filed, it can take enforcement officers between three to five days to gather enough evidence to prove a property is being improperly rented out — time that could be spent on other, more pressing issues.
“It’s really hard to prove when short-term rental activity is happening,” Burghdoff said. “It’s very resource intensive staking out these private properties.”
Officers have to time their visits when someone is home, check the license plates of cars parked in front of the building, and conduct interviews with neighbors who may have information about the problem. Even if the code enforcement department has evidence that the property is being advertised on a site like Airbnb or Vrbo, advertising on its own isn’t enough to cite someone for an ordinance violation.
“That’s one of the reasons we want to do the data mining, to help us understand how many short term rentals there are. Not just the ones where we get complaints but ones where we can validate that they not only advertised a short term rental but that they actually had a booking,” she said.
Once data on the properties is collected, Burghdoff said, it will be easier for the code enforcement department to identify and educate owners when a complaint is filed.
Short-term rental hosts draw power in numbers
While still in its infancy, the Fort Worth Short Term Rental Alliance has attracted host members across all walks of life. Some are real estate investors; others are retired couples looking to supplement their income. By organizing the group, Brady is hopeful its interests will be better represented in city government.
“Our group really does run the gamut of anyone who wants to participate in short-term rental activities,” she said. “But the one thing that we all have in common is we want to do it the right way and want to be great.”
One of the primary arguments against legalizing residential short-term rentals is a fear of increased noise and partying in neighborhoods. The city could hold hosts accountable if the practice was made legal and a registration system was put in place, Brady said.
“We know that there are things that the government is not prepared for or has the capacity to handle if this ordinance is amended and short-term renting is allowed in the future,” she said. “So we would help with things like educating hosts on how to fully vet your guests and how to contribute to the economic development within your own community.”
Susan Wilson, a retired middle school teacher, said she’s made several good friends from her time as a host. She enjoys being able to show off her city to newcomers and provide a safe space for women traveling alone.
“I feel like I’m a good person for them because I can kind of watch out for them,” she said. “Women traveling alone need an advocate. If there’s ever a situation or they need something I’m a phone call away, and they’ve met me already so they know me. Airbnb hosts give a personal face to Fort Worth.”
The money Wilson earns from hosting helps supplement her retirement income and keeps her busy and social now that her kids have moved out of the family home.
Brady said she’s had several couples stay with her while adopting a baby in Fort Worth. Prospective parents have to stay within city limits for around two weeks before leaving with the child.
“Those parents don’t want to have a newborn baby in a hotel,” she said. “They want a home. So I’ve hosted seven or eight parents that are literally here adopting children.”
The full city council likely won’t see a resolution on legalization of residential short-term rentals for several months. In the meantime, hosts have started an online petition requesting a pause to current enforcement measures. As of Monday, the petition had garnered 222 signatures.