City of Marfa’s short-term rental regulations to be enforced in 2023

MARFA — Effective January 1, the City of Marfa’s revamped short-term rental (STR) ordinance, which calls for increased permit fees, proof of insurance and self-reporting safety checks, marks the first time the municipality will enforce laws both long on the books and newly-adopted relating to vacation stays. 

At the last city council meeting of 2022, council voted to approve the new STR ordinance, which further built off of an existing ordinance first established in 2007. Discussion over the town’s abundance of STRs and lack of affordable housing for locals prompted the reassessment of the ordinance this past fall. 

“It was a council suggestion — they wanted to take a look at the way we were collecting fees and enforcing the ordinance,” said City Manager Mandy Roane. “When we started looking at what needed to be done, we realized that there was going to be a huge time commitment.” 

Kelly Perez, who previously served as city secretary but is now transitioning into her role of records clerk, has been building a list of the STRs in Marfa utilizing sites like Airbnb, VRBO and more, so the city can better track who is operating STRs and make sure the new ordinance is being followed. Roane said while the city has been criticized in the past for enacting things it can’t enforce, getting a better handle on local STRs in the wake of the pandemic and new administration is a priority. 

“[Greater enforcement] has been something that council has been very clear that they want done since I came on board. This is us doing that — we’re following through on this. We have tailored it in a way that we feel like we can enforce it,” said Roane. 

In order to legally operate an STR in Marfa, a permit from the city must be obtained. Permits cost $500 and will need to be renewed annually. An additional cost of $100 per unit applies. The new fees will pay for part of Perez’ salary as the new records clerk and cover the work of other city employees such as the city manager, city attorney and utilities staff (STRs are required to have separate meters and pay commercial trash.) 

“There’s a lot that goes into it. We’re being much more thorough than we were in the past,” said Roane.

The fee also includes membership to the Texas Hotel Lodging Association (THLA), with which the city registers Marfa STR owners for $175 each. Membership to the THLA is not required by law, but is considered a best practice, said Roane, because the THLA offers legal council, training and resources for STR owners. Members of the THLA traveled to Marfa this past August to host public meetings on STRs and Hotel Occupancy Tax (HOT).  

The city will also begin to enforce the collection of the HOT taxes that STRs are required to pay the city, per its existing ordinance. STRs are required to pay taxes to the state and local governments. In Marfa, the tax rate is currently 7%. According to state law, HOT revenue can only be used by a city to promote tourism, arts and culture and historic preservation. There have been previous discussions at the city level about what it might look like to be able to utilize HOT funds more creatively in order to help with city infrastructure or other projects, but the city is restricted in how it can use the funds by the state and discussions are ongoing. 

The city recently sent out letters to 212 individuals Perez believed to be operating STRs, informing them of the permit fees and additional requirements. The city’s goal is to obtain the STR permit fees by the end of February, said Roane. There will be a 30-day grace period and those not in compliance will be subject to a $2,000 fine. The city will distribute packets to STR operators including: copies of the ordinance, a registration form, information on how to calculate the permit fee, a tax remittance form that details requirements and how-tos for the quarterly HOT payments, helpful phone numbers for city departments and more.

The safety inspection requirements are new and consist of a self-reported checklist which confirms that STR operators have functioning safety features like smoke detectors and more on the premises. The city’s extra territorial jurisdiction, or ETJ, was included in the original 2007 ordinance and is still included in the new ordinance. The ETJ is anywhere a half mile outside of the city limits, meaning Antelope Hills is not included and only part of Sal Si Puedes is included. Perez said she was only aware of a small number of STRs operating in the ETJ. 

Whether or not to restrict the number of STRs utilizing zoning requirements, similar to the policies adopted by the cities of Austin and San Antonio, has also been a topic of discussion as of late but is not currently being pursued with the new STR ordinance.