Austin Short-Term Rental
Investment Opportunities

• Every STR in Austin's full-purpose jurisdiction must hold a valid operating license issued by Austin Development Services, per unit.
• New application fee: $836.30 total ($789 license fee + $47.30 neighbor-notification fee); renewal is $385.30. Fees are non-refundable.
• Licenses are valid for two years (extended from one year in the October 2025 changes).
• A Certificate of Occupancy and proof of insurance are no longer required for new applications or renewals (removed October 2025).
• Tenants may now operate STRs with the landlord's written permission — the license holder assumes responsibility for the unit.
• Applications are submitted online through Austin Finance Online (AFO); the city contracted Deckard Technologies in November 2025 to build a new customer-focused licensing system.
• Neighbor notification now occurs at every renewal, not just first issuance.

Source: City of Austin Ordinances 20250227-039/-040/-041 / austintexas.gov/development-services/short-term-rentals

• The February 2025 ordinances made STRs an accessory use to residential uses in ALL zoning districts, replacing Austin's old type-based system that had banned new non-owner-occupied STRs in residential areas.
• Under the old regime, new 'Type 2' (non-owner-occupied) licenses had been frozen in residential zones since 2016 — the 2025 overhaul re-opened the entire city to licensed investor-owned STRs.
• A proposed geographic density cap (limiting STRs per neighborhood) was defeated 8–3 at the September 2025 council vote.
• HOA rules, condo declarations, and deed restrictions still apply independently of city zoning — always verify before purchasing.

Source: City of Austin Ordinance 20250227-039 / Austin Monitor (Sep 2025)

• Ordinance No. 20250911-012 (adopted September 11, 2025; effective October 1, 2025) added portfolio-level limits for operators.
• Single-family sites: an individual may operate up to two STR units on one site, and additional STRs elsewhere must be at least 1,000 feet apart (measured site-to-site).
• Multifamily sites: an individual may operate the greater of one unit or 10% of the units at the property.
• Mixed-use sites (4+ residential units plus at least one commercial use): the cap rises to the greater of one unit or 25% of the operator's units.
• STR operators on single-family sites must be individuals — corporate operators face the multifamily/mixed-use caps.
• These limits shape portfolio strategy: scaling in Austin means spreading single-family STRs across the city or targeting mixed-use buildings.

Source: City of Austin Ordinance 20250911-012 / Austin Monitor (Sep 2025)

• A local contact must live in the Austin metro area (Travis, Williamson, Hays, Bastrop, or Caldwell County) and respond promptly to complaints.
• Operators must fix repeated violations; the city can require mitigation measures for operators with chronic problems.
• The STR license number must be displayed on all platform listings.
• Neighbors are notified at every license renewal.
• STRs are defined as rentals of a housing unit (or portion) for less than 30 consecutive days.

Source: City of Austin Ordinance 20250911-012 / austintexas.gov

• City of Austin Hotel Occupancy Tax: 11% (a 9% occupancy tax plus a 2% venue project tax).
• Texas State Hotel Occupancy Tax: 6% of rental revenue.
• Total tax burden: approximately 17% of gross rental income — one of the highest combined rates in Texas.
• Since April 1, 2025, booking platforms (Airbnb, Vrbo, Expedia, Booking.com, etc.) must collect and remit the city HOT on operators' behalf.
• Operators must still file quarterly HOT reports with Austin Financial Services noting what each platform collected and remitted — even for zero-revenue quarters.
• Confirmation of quarterly HOT filings is required as part of license renewal.
• HOT applies to cleaning fees, pet fees, reservation fees, and similar charges — not just the nightly rate.

Source: City of Austin Ordinance 20250227-041 / austintexas.gov/financial-services/hotel-occupancy-taxes

• Since July 1, 2026, the city requests removal of unlicensed properties from STR platforms.
• Platforms must display valid STR license numbers on listings and honor delist notices from the city.
• The city notified STR owners in early 2026 that they had until July 1 to obtain an active license before delisting requests began.
• Unlicensed operation is an offense under Title 4, with penalties; updated revocation procedures cover chronic violators, including declaring a property a nuisance.
• The city uses Deckard Technologies software to identify unlicensed listings and support enforcement.

Source: City of Austin DSD memo (Apr 2026) / KXAN (Feb 2026)

• Many Austin condo buildings and HOA communities restrict or prohibit rentals under 30 days regardless of the city's citywide allowance.
• Texas Property Code gives HOAs enforcement power over deed restrictions, including fines and legal action.
• Review CC&Rs, condo declarations, and lease terms before purchasing an STR investment property.