Battle over Dallas’ short-term rental ban heads to appeals court

DALLAS - The Texas 5th District Court of Appeals is now deciding whether or not the city of Dallas can prohibit short-term rentals in single-family neighborhoods.

On Wednesday morning, an appellate court judge heard from people on both sides of what has become a heated debate. 

The city wants to see its ordinance take effect, but individual property owners argue their rights are being violated.

In the summer of 2023, the Dallas City Council passed an ordinance sharply restricting where STRs would be allowed in the city.

The ordinance prevents properties like those listed on Airbnb and VRBO in most single-family neighborhoods.

The council was responding to dozens of complaints from neighbors about noise, parking problems, loud parties, and illegal activity like drug use and prostitution.

But the ordinance has been on hold for nearly a year following a lawsuit filed by the Dallas Short-Term Rental Alliance. 

This case will come down to a battle of rights – the rights of the homeowners to live beside other long-term residents or the rights of STR owners to use their homes to earn money.

"The ban painted a broad brush stroke for everyone including me," said Karen Eubanks, an STR owner.

"You can still make money by leasing your property," argued Olive Talley, a Dallas homeowner and neighborhood advocate.

Attorney David Coale represents the Dallas Short-Term Rental Alliance.

"No one wants unregulated activity, when homeowner rights are at stake. But we don’t want swatting a fly with a sledgehammer. These ordinances went too far," he said.

Lisa Sievers owns two STR properties in Dallas. She argues the city could resolve the noise, parking, and trash problems through better regulations.

"They could put code enforcement out there on nights and weekends, which is not happening right now and bring in the 3% causing the problems," she said.

In September, police were called out to a massive party at a STR in West Dallas. Neighbors compared it to a nightclub, but police determined no crime was committed.

"STRs are businesses. STRs are hotels. Hotel businesses, bars, restaurants have not been allowed to operate in neighborhoods, period," Talley argued. 

She and other Dallas homeowners made the trip to the George Allen Courthouse to fight to preserve their neighborhoods.

"Shootings, killings, parties, drugs, brothels – those are the harms that erode neighborhoods," she said.

The Texas Neighborhood Coalition, an anti-STR group, filed a court brief earlier this year arguing that the temporary restraining order against the STR rules was a mistake.

The group says it is important that the Dallas ordinance stands.

"As the experience in so many cities has shown, dealing with STRs using anti-nuisance ordinances does not work," reads a statement from the Texas Neighborhood Coalition. "By the time residents file complaints, the harm has already been foisted on them. And because code enforcement does not work on the weekends and because the police already have their hands full on the weekends when the bad behavior is most likely to happen, no city officials often show up when the nuisances are ongoing.  And most importantly, there are no rules that can protect the neighborhood character when streams of transients replace long-term neighbors."

Some observers believe whatever ruling comes from this court hearing could set an important precedent for lots of other cities that are immersed in the same debate over the future of STRs.

A ruling from the three-judge panel is expected in 90 to 120 days.

Until then, Dallas cannot enforce its STR ban.