Lawsuit: Austin ‘Carpet Bombing’ Private Property Rights in ‘Sharing’ Industry

property sharing Airbnb
File Photo: JOHN MACDOUGALL/AFP/Getty Images

An Austin, Texas, city ordinance designed to regulate short-term rental properties with warrantless “bed checks” and curfews is now in legal crosshairs amid a lawsuit filed Monday by local homeowners. Should the City prevail, sharing economy staples like Airbnb could effectively follow Uber and Lyft’s example by vacating the Texas capital city.

Beginning in February 2016, Ordinance 20160223-A.1 prohibited the new operation of short-term property rentals (those lasting less than 30 days of occupation per tenancy) and restricted “assemblies” of tenants and guests with curfews and warrantless bed checks, according to legal documents obtained by Breitbart Texas. Plaintiffs allege that such regulations are tantamount to “carpet bomb[ing]” the constitutional rights of real estate owners and renters of all kinds if left unchallenged.

“The fundamental purpose of government is to preserve and protect liberty,” Texas Public Policy Foundation General Counsel Robert Henneke said – a key organizer of the legal effort. “One does not forfeit protections to privacy and warrantless searches and seizures simply by choosing to stay as a guest in a short-term rental.”

Previous Austin ordinances governing short-term rentals often accessed by Airbnb and other services were segmented into three primary categories: owner-occupied; residential rentals without a homestead claimed; and portions of a multifamily complex. Permits are required for any such uses. The complaint notes that as of August 2015, roughly 90 percent of properties fell into the owner-occupied and non-homestead categories. The current ordinance disallows new non-homesteaded properties to be rented and creates a variety of enforcement measures that trigger privacy and equal protection concerns.

According to the complaint, short-term renters, regardless of property type, may not “assemble” with six adults or more directly outside the premises between the hours of 7:00am and 10:00pm or host an assembly of any size, anywhere on the property from 10:00pm to 7:00am. Only 10 related adults or less may establish tenancy at a time, regardless of square footage. During overnight hours, no more than two adults may reside in a single bedroom. Part 7 of the 2016 ordinance requires that tenants submit to the entry of city permit officers “at all reasonable times” for warrantless searches of “all buildings, dwelling units, guest rooms, and premises.”

In terms of enforcement, renters are not allowed guests constituting an “assembly”, nor “make or allow another to make noise”, according to the court document. Violators face permit revocation and daily fines up to $2,000.

Plaintiffs indicate that the City’s focus on social gatherings and noise are not borne out of existing nuisance issues. The filing notes that since short-term rental regulations came into force in 2012, “there have been zero (0) citations issued for noise, occupancy, trash or other violations” documented.

Assisted by the TPPF and its litigating partners, the plaintiffs coming forward represent an ethnically-diverse background of families facing severe financial consequences should the ordinance continue its enforcement as is. Emerging economic matters such as loss of a job typically forced plaintiffs to place their primary residences on short-term rental markets to cover property taxes and debt payments. Without an injunction, they face losing their respective properties altogether.

During a media teleconference call on Monday, the TPPF argued that such onerous regulations were part of the “California-ization” of Texas.

The 43-page complaint lays out six counts of causes of action in response to the ordinance, ranging from privacy concerns to zoning violations and unlawful searches and seizures. A chief concern revolves around the alleged discrimination between short and long-term tenants throughout the city. Whereas a holiday weekend renter must accept unannounced visits from city officers and be in their bedroom by 10:00pm, the neighbor occupying according to the terms of a one year lease is left unrestricted. Disparate treatment between owner-occupied properties and not are also probed. The complaint adds that such acts of discrimination are founded in “prejudice and favoritism, rather than to further a legitimate state interest.”

The plaintiffs seek a permanent injunction for Austin’s short-term rental ordinances or face “imminent and irreparable harm”. All due attorneys’ fees are sought as well.

The City of Austin has a well-established record of regulating stakeholders of the sharing economy to the point of total market exit in recent months. Breitbart Texas reported on the vacuum left behind when ridesharing companies Uber and Lyft objected to requirements that drivers pass background checks and submit to fingerprinting. Lana Shadwick, Breitbart Texas’ Legal Analyst, noted that Uber spent $8 million to promote a ballot measure that, if passed, would have softened a December 2015 Austin City Council rule on the matter.

Breitbart Texas has also shed light on how municipalities utilize their zoning powers to price lower income home buyers and rental customers out of the market. This latest example in Austin demonstrates how such codes may harm both lessors and lessees of all types.

The lawsuit was filed in the District Court of Travis County, Texas. A copy of the original complaint has been made available below.

Logan Churchwell is a founding member of the Breitbart Texas team. You can follow him on Twitter @LCChurchwell.

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