On September 11, 2025, Austin City Council approved updates to the city’s short-term rental (STR) ordinance. The changes officially take effect on October 1, 2025 for operators, with platform-related rules beginning in mid-2026.
While the updates do add a few new requirements, they are not a sweeping overhaul. In fact, compared to how other cities handle STRs, Austin’s new framework is fairly lenient. Still, hosts should understand the details, especially around license eligibility and the new spacing rule.
Key Updates for STR Operators (Effective October 1, 2025)
Longer License Periods
STR licenses will now be valid for two years instead of one, making renewals less frequent.
Ownership Rules for Single-Family Sites
Only individuals (natural persons, certain trusts, or LLCs made up entirely of individuals) may hold STR licenses for single-family properties (defined as sites with three or fewer units).
Larger or layered corporate entities cannot apply for STR permits on single-family lots.
The 1,000-Foot Rule
A maximum of two STR permits per lot is allowed when the lot has one to three units.
If you own multiple STRs across different lots, they must be at least 1,000 feet apart.
This applies between lots, not within a single lot. For example:
A duplex or a home with an ADU on the same lot could be licensed for both units.
But you couldn’t also operate an STR on the immediately adjacent lot.
Multi-Family and Mixed-Use Properties
Mixed-use sites (4+ residential units plus commercial use): An operator may use the greater of one unit or 25% of the units as STRs.
Multi-family sites (apartments/condos without commercial use): An operator may use the greater of one unit or 10% of the units.
Local Contact & Compliance
Every STR must list a local contact who lives in the Austin Metro Area (Travis, Williamson, Hays, Bastrop, or Caldwell County).
Hosts are expected to respond quickly to complaints and resolve repeated violations.
Neighbor notification is now required at every renewal, not just at the initial license application.
Platform Rules (Effective July 1, 2026)
Platforms like Airbnb and Vrbo will eventually be responsible for:
Showing a valid city license number on every listing.
Removing unlicensed listings within 10 days if the city requests it.
Avoiding fee collection from unlicensed operators.
How strictly this will be enforced remains to be seen — cities generally have limited leverage over global platforms.
Why These Changes Happened
The biggest driver behind the ordinance was a legal one.
In 2019, Austin’s Third Court of Appeals ruled — and the Texas Supreme Court affirmed — that the city’s older STR restrictions were unconstitutional because they treated STRs differently from other home rentals.
The September 2025 update is an attempt to create a workable system that allows regulation and enforcement while staying closer to state law.
That said, certain provisions — especially the 1,000-foot spacing rule and ownership caps — may still be open to challenge, meaning the ordinance could change again down the road.
What This Means for Hosts
More predictability: With two-year licenses, renewals are less of a headache.
Eligibility matters: Make sure your ownership structure qualifies if you’re operating on a single-family lot.
Spacing awareness: The 1,000-foot rule could affect investors with multiple nearby properties.
Light enforcement touch: Compared to cities with bans or strict caps, Austin’s new rules are fairly permissive.
The Takeaway
Austin’s updated STR ordinance is less about cracking down and more about bringing the city’s rules in line with state law while addressing neighborhood concerns. For most hosts, the changes won’t dramatically alter day-to-day operations. The biggest impacts will be on owners with clustered STRs or complex ownership structures.
The rules are worth understanding, but they’re not the end of the STR market in Austin — far from it.
