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Last updated: August 31, 2023

Short-Term Rental Report: The State of Texas STRs in 2023

With many top travel destinations in the Lone Star state, local governments have seen a rise in short-term rentals.
Posted by Cole Zercoe
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This article is part of an ongoing series of reports on the state of short-term rentals in the U.S. You can view our other reports here.

In Texas, home to some of the most populous cities in the U.S., officials have seen a steady rise in the number of short-term rentals (STRs) available across the state. Not surprisingly, Austin, one of the premier cities for live music, is among the top STR markets, with cities like Houston and San Antonio also high on the list for travelers. Given the plethora of destinations in the Lone Star state–each of which features numerous draws for potential visitors–local officials have had their hands full when it comes to effectively managing STRs. Here’s a look at how Texas is tracking and regulating the industry.

Houston

Like many cities, Houston has seen an influx of STRs over the past decade. Here, residents are calling for officials to pass legislation focused on STRs that are rented out full-time in residential areas. These properties are currently required to collect occupancy taxes via STR platforms, but, locals say, should also be subject to many of the other rules traditional hotels must follow.

The Colony

In 2022, The Colony established a program that utilizes software to better track STRs in the area and to receive complaints about any issues that arise at properties. Since then, in response to complaints regarding trash and noise, officials in The Colony are considering further restrictions on STRs.

Galveston

In Galveston, STR operators must register with the Park Board of Trustees and pay a 15% hotel tax on a monthly or quarterly basis. To make the process easier for operators, the Park Board set up an online system for tax payments. The city plans to identify and, if necessary, pursue legal options for operators who do not register and remit occupancy taxes. Galveston-Texas-Pier

Allen

In Allen, Texas, STR operators are required to get a permit for each rental they operate and renew them annually, as well as pay a 7% hotel occupancy tax. To make tax payments and permit applications and renewals easier, the city set up software that offered the services to operators through an online portal.

Fort Worth

In Fort Worth, the fifth most populous city in Texas and thirteenth in the U.S., city officials are allowing STRs only in commercial and mixed-use areas while restricting them in residential zones. The ordinance, which passed earlier this year after lengthy debate, was designed to boost both compliance enforcement and hotel occupancy tax revenue, as well as make the path to registering and tracking STRs easier. The city has given residents who wish to operate STRs in residential zones the option to request a zoning change through the city council.

Austin

In Austin, one of the state’s most popular areas for STRs, city officials sought to implement an ordinance to limit STR operations to those living on the property they’re renting. Despite hitting a legal roadblock to this policy, the city plans to enforce all other STR compliance rules through its Permitting and Development Center as part of a merger with its Development Services Department. One official estimates less than 2,000 of the estimated 11,000 rentals in the city are licensed, underscoring the need for effective tracking tools to collect taxes.

A Guide to Short-Term Rentals for Local Governments

San Antonio

In Texas’ second largest city (after Houston), officials have focused on density to tailor their STR ordinance. Properties classified as “Type 2” STRs (rentals that are not used as a residence) have percentage limits. Depending on the property, these limits are based on the number of homes on a residential block, or the number of dwellings in a small multifamily development or a larger multifamily complex (more than five units).

Fredericksburg

In Fredericksburg, the city has set up an STR hub for operators or would-be operators to check the latest zoning restrictions, apply for permits, and ensure they’re in compliance with inspections and tax remittance.

El Paso

Despite being the sixth most populous city in Texas, El Paso doesn’t have specific ordinances for the estimated 1,500-1,850 STRs operating in the city and is currently weighing a number of options for regulation of the industry. Among them: a 17.5% hotel occupancy tax, a limit to the number of STRs per area, permit fees, and agreements with popular STR hosting platforms like Airbnb and Vrbo.

STR compliance and tax collection made simple

Managing STRs is a complex operation—but the right tool can make it easier. Whether your local government is looking to get better data on how many STRs are operating in your area, streamline the permit application and renewal process, collect taxes, or better monitor safety, GovOS’ STR management platform is up to the task.

Learn how GovOS can help unify and simplify the numerous components of STR monitoring.

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