Of the more than 10,000 short-term rental units advertised in the city of Austin, only 2,500 are operating legally with the proper licenses, according to a recent city study.
Cora Wright, director of the Austin Code Department, authored a July 19 memo that broke down the department's use of resources to handle code violations related to the city's STR program. A third-party contractor hired by the city of Austin identified the 10,000-plus STR listings.
Those unlicensed operators are potentially costing the city of Austin millions of dollars in hotel occupancy tax revenue. If STR websites began collecting the hotel occupancy taxes at the time of checkout, as was discussed last year, Austin could bring in as much as $7 million in taxes annually from just Airbnb, the Austin American-Statesman reports.
The contractor that identified the STR properties, Host Compliance, will also "identify and provide location and advertising data on a total of 3,500 unlicensed properties by February 2020," according to the memo.
Over the past couple of months Host Compliance has helped the city begin enforcement actions against the thousands of unlicensed operators throughout the city. The Host Compliance data has helped lead to 224 violation notices for illegal advertising, according to the Austin Code Department. The early progress gives the Austin Code Department hope that all 3,500 unlicensed properties identified by Host Compliance will eventually be targeted for enforcement action.
The hope is that more eligible properties will acquire licenses by the end of the fiscal year. If 200 such properties do so, it would result in a 59 percent increase in the number of properties licensed in the past two fiscal years, according to the memo.
This story was first published in the Austin Business Journal. Click here to see the rest of the story [subscriber content].
