May 31, 2023 737 PM
MARFA — Bills filed during the recently-concluded 88th Legislative Session relating to local control over short-term rental regulation and hotel occupancy tax expenditure fell short of being signed into law, leaving local governments to reassess a path forward on tourism-related issues.
Short-term rental (STR) legislation
HB 2665 started as an STR preemption bill that would have severely limited cities’ and counties’ abilities to regulate STRs, allowing them to require a basic permit and fee, but preventing them from limiting duration, frequency, or capacity limits of STRs as well as their locations. (Cities, including San Antonio, have used zoning laws to curtail the number of STRs allowed on a singular block, for example).
The bill — which was met with extreme opposition by the Texas Neighborhood Coalition, which lobbies on STR issues on behalf of its various chapters at the Capitol — transformed into a study bill that would have assessed how STRs impact communities across the state.
Among other action items, the bill ordered for a task force’s findings on “the impact of rental properties and residential amenity rental properties on the quality of life in communities where those properties are located, including impacts on crime, noise, local school enrollments, and other unintended consequences.”
Justin Bragiel, general counsel for the Texas Hotel Lodging Association, which opposed HB 2665 in its preemption form, said if the STR study bill passed, he planned to advocate for the placement of a representative from Marfa on the committee. However, the bill died in the Senate, never having been referred to a committee.
Bragiel, who has seen many STR bills introduced but never passed over the past few legislative sessions, said it was the first time the idea to do a study was brought up, and while it was an interesting concept, the bill’s controversial beginnings as an STR preemption bill made it unpalatable to lawmakers.
Marfa City Manager Mandy Roane said she was disappointed with the outcome of the potential STR study bill, which she supported. As a city administrator, Roane said it would have been helpful to have access to hard numbers and empirical data as opposed to anecdotal information on the impacts of STRs.
“The questions that study bill seem to be answering are the things that people are asking us — it’s stuff that we just can’t answer,” said Roane. “The effect that STRs are or are not having on a community, to be able to have some actual literature [on that] would have been helpful.”
Abby Boyd and Kate Calder of Help Occupy Marfa Equitably (HOME), a “community action committee” still getting off the ground, were confident that a study on STRs would have proven what they already believe to be supported by existing data from AirDNA, an STR data aggregate with which the city recently partnered, as well as anecdotal evidence — that STRs have led to a shortage of available housing for locals, among other issues.
“We believe that it would have provided data in support of what we’ve been saying — that short-term rentals contribute to a housing market that harms communities and has already caused a lot of harm to ours,” said Boyd.
The idea to conduct a study on STRs in Texas’ communities could still come to fruition, said Bragiel, in the form of an interim charge — a directive handed down by the current speaker of the house, Rep. Dade Phelan, to the House Land and Resource Management Committee instructing them to study the matter further and make recommendations before the next legislative session in 2025. Phelan did not immediately return a request for comment.
While the interim charge would not have the same “depth and force” as the study bill, said Bragiel, there would likely still be an opportunity for public testimony from Marfa to be heard. Whether or not an interim charge on STRs has been issued will be known by this fall, predicted Bragiel, and the findings would not be presented until the following summer, closer to when the 2025 legislative session begins.
For now, the management of STRs remains in the hands of local officials, who are tasked with assessing options moving forward. Boyd and Calder of HOME said they were relieved no laws passed that would take away Marfa’s ability to regulate on the local level.
“The fact that because nothing gained any traction, municipalities will continue to be able to make decisions that best fit and best support our community, at least for the next two years, is a good thing in Marfa across the board,” said Calder.
More data collection should continue, said Calder, and community conversations with council members on potential solutions were the natural next steps. Boyd said options she would like to see Marfa City Council assess are the regulation of STRs via zoning, as well as a potential cap on the number of STRs.
“Our city is changing, and in response, we need to take a look at all of the codes and ordinances we have in place and see if they’re still effective, if they’re fair and if they make sense for the Marfa that we have today and the Marfa that we expect to have in the future,” said Boyd.
This past April, Marfa Chamber of Commerce leaders, including Boyd, and locals addressed city council members asking for greater exploration of STR regulations, drawing opposition from some STR owners. In candidate questionnaires published in The Big Bend Sentinel ahead of the May 6 General Election, both newly re-elected Mayor Manny Baeza and Mayor Pro Tem Raul Lara responded to a question on how they would address STRs, if at all, by stating they were waiting on bill outcomes from the legislative session and would revisit the matter after those decisions came down.
Roane — who has no voting power on city council — said it was possible city council would tackle the issue this summer during the budget process, where they also revisit ordinances. Recognizing that STRs are a hot button issue, where people on both sides hold strong opinions, council will have to take all of that feedback into careful consideration when making any decisions, she said.
“Because of the number of STRs we have and the size that we are, I think Marfa is unique in a lot of ways, and I think our STR situation is no different. It’s something that the city officials will have to grapple with at some point for sure,” said Roane.
Roane said in general, clearer direction and more specific guidelines from state legislators would be helpful for Marfa City Council moving forward. As it stands, because Marfa is a general law city — an unchartered city that may only exercise powers that are specifically granted or implied by statute, according to the Texas Municipal League — it needed to proceed with caution legally as far as any STR regulations go.
“If [the Legislature] were to lay out: you can regulate or you can’t regulate, or you can enforce density or not, I think it just would have given council just some clear guidance that’s not going to put the city in any type of legal trouble,” said Roane.
Hotel occupancy tax (HOT) legislation
SB 1208, a bill sponsored by Senator César Blanco, would have expanded cities’ legal uses for HOT expenditure — allowing small municipalities West of the Pecos River to utilize HOT taxes for infrastructure projects, including streets, water, sewer and broadband internet. But the bill gained little traction in the Senate Natural Resources and Economic Development committee to which it was assigned and never passed.
Marfa City Manager Roane and Alpine City Manager Megan Antrim previously voiced support for the HOT tax for infrastructure initiative. Roane said because Marfa’s population can increase significantly on any given weekend with events and festivals, being able to use HOT funds for general infrastructure improvements that support both locals and visitors made sense.
“When we have visitors come in and they’re paying that hotel occupancy tax, they’re coming, they’re visiting, but they’re also having an impact on our infrastructure,” said Roane. “That’s more people on our streets. It’s more people using our sewer and water.”
Roane was grateful for Sen. Blanco’s support on the effort, but was frustrated the bill didn’t progress further and hoped in the future similar bills garnered greater support and didn’t stall out in committee.
“I guess we can cross our fingers for 2025,” said Roane. “[And] really start working on it and try and build that momentum.”
Bragiel and the Texas Hotel Lodging Association (THLA) opposed SB 1208 on the grounds that the organization supports existing laws that require HOT tax to be used for tourism promotion and advertising of the area.
THLA did support a bill, HB 1689, that passed allowing for counties that levy a HOT tax, such as Brewster County, to use HOT tax revenue for HOT collection. Brewster County has recently struggled to collect all of the HOT taxes owed and hired an Austin-based company to help with enforcement.