Waco ADUs may be rented long-term (30+ days) provided owner occupancy continues under the typical SUP condition. Short-term rentals (under 30 days) are regulated under the Waco STR ordinance with registration, hotel occupancy tax collection (Texas Tax Code Chapters 156/351), and zoning-based restrictions. STRs near Magnolia Market, Baylor University, and the Silos see the highest density and the most active enforcement.
Long-term rental (30 days or more) of an ADU is permitted in Waco provided the property owner continues to occupy either the principal dwelling or the ADU as required by the Special Use Permit condition under Waco Code Chapter 28 and the recorded deed restriction with the McLennan County Clerk. Short-term rentals (under 30 days) are regulated under Waco's STR ordinance which requires registration with the city, hotel occupancy tax collection, fire and safety inspection, and a local responsible party. Operators must collect and remit the State of Texas Hotel Occupancy Tax of 6% under Texas Tax Code Chapter 156 and Waco's municipal HOT of up to 7% under Texas Tax Code Chapter 351, for a combined rate of approximately 13%. STRs in residential zones face stricter standards; the most permissive STR regulations apply in commercial and mixed-use zones near tourism attractions (Magnolia Market/Silos, downtown Austin Avenue, near McLane Stadium on game days). ADUs typically cannot be operated as standalone STRs unless the property's SUP specifically authorizes ADU short-term rental — most ADU SUPs limit use to long-term residential or owner-family use. Neighborhoods near Baylor University see active STR enforcement because of student-area conversion concerns. Texas state law has not preempted Waco's STR registration regime (HB 2128 and similar preemption bills failed in the 87th and 88th Legislatures).
Operating an unregistered STR carries fines up to $500 per day under Texas Local Government Code § 54.001 and is a Class C misdemeanor. Unpaid hotel tax accrues penalties and interest under Texas Tax Code Chapter 156. Waco monitors Airbnb and VRBO listings and pursues unregistered operators.
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See how Waco's adu rental restrictions rules stack up against other locations.
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