Austin City Code Chapter 25-2 establishes three STR license types, and Type 1 requires the operator to occupy the property as a primary residence. Type 2 (non-owner-occupied) and Type 3 (multifamily) carry stricter limits, density caps, and ongoing litigation over permitted neighborhoods.
Austin's STR ordinance under Land Development Code Chapter 25-2 categorizes short-term rentals by owner relationship. Type 1 is owner-occupied; the licensee must use the unit as a principal residence and may rent it during absences or as a host-present home-share. Type 2 covered non-owner whole-home rentals in residential zones, but Austin halted new Type 2 licenses in 2016 and prevailed in part in subsequent litigation. Type 3 covers multifamily commercial settings such as condos and apart-hotels. All STR operators must register, post the license number in listings, collect Hotel Occupancy Tax, meet life-safety standards, and respond to nuisance complaints. Austin enforcement is among the strictest in Texas.
Operating without a license, exceeding occupancy or density caps, or violating neighborhood Type 2 restrictions can produce Class C misdemeanor citations up to two thousand dollars per day per violation, license revocation, and HOT tax assessments with penalties.
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