In light of Fort Worth’s recent actions and rumors of new taxes and regulations on small businesses, Texas Scorecard asked local homeowners in the DFW Metroplex for their feedback.
On December 26 of last year, Fort Worth briefly launched a survey on short-term rentals, defined as “vacation rentals that are rented for less than 30 days.” These rentals can be offered in cabins, condominiums, or homes of the property owner. The practice has become popular and convenient for homeowners, thanks to companies like Airbnb and Vrbo.
Fort Worth took down their survey after just four days because it was not authorized by city management; however, Texas Scorecard learned that one of the actions the city could consider taking with short-term rentals is to make the property owners pay the hotel tax.
We reached out to some homeowners in the DFW Metroplex who are known to have rented out their properties as short-term rentals: Julie McCarty of Grapevine, CEO of True Texas Project; Raz Shafer of Fort Worth; and another Fort Worth homeowner, who wished to remain anonymous. Shafer and the anonymous homeowner both offered part of their homes to short-term renters at one time, whereas McCarty has about six different properties around the metroplex that she rents out and has been in the business for two years.
TS: How do you feel about homeowners and property owners having the opportunity to offer short-term rentals on their properties through sites like Airbnb?
McCarty: “We have a constitutional right to own and manage our own property.”
Shafer: “The ability to use our extra bedroom as a short-term rental was a great blessing and a great deal of fun for our family. It turned out that we really enjoyed it and found it to be a significant financial benefit.”
Anonymous: “It is an excellent and credible business, which allows revitalization of properties that otherwise might continue to depreciate.”
TS: Mrs. McCarty, Grapevine last year attempted to ban short-term rentals. How did that make you feel?
McCarty: Cheated, bullied, and violated by the city council.
TS: What if the government raises taxes on short-term rentals, so it would be equal to the taxes those staying at hotels must pay, or increased regulations?
McCarty: “We already pay taxes on the rentals. If the city adds the hotel tax, we’d just add it to the room rate. As for regulations, all concerns that have been brought up are already addressed by other city ordinances (like parking, noise, etc). The courts have said the same thing.”
Shafer: “I’d be enormously offended by a move to ban short-term rentals in Fort Worth and nearly as mad about the idea of levying a local tax on them. Cronyism in politics is rampant, and we’ve seen no clearer examples of this than what taxi companies have done when faced with competition from Uber, or hotels when faced with Airbnb. Banning them would be an infringement on my property rights and do great harm to middle-class families like my own who really need the income.
“Further, Fort Worth levies the highest hotel occupancy tax rate in the state (only 2 other cities charge the 9 percent rate) and uses the money exclusively for activities surrounding the Fort Worth Convention Center and Will Rogers Memorial Center.”
Anonymous: “I object to there being taxes, because a long-term renter wouldn’t have extra taxes, so why should a short-term rental?”
TS: What effect would any of these have on short-term renters such as yourself?
McCarty: “We already are on top of these issues. It would not affect us in any significant way.”
Shafer: “The same as any tax: either the customer’s cost would increase, decreasing demand, or my own profit would decrease, making the opportunity less appealing for my family.”
Anonymous: “We would have to raise our rates to cover the taxes, but I imagine that the property would still be rented frequently.”
TS: What kind of environment would you as a short-term renter want local governments to provide when it comes to short-term rentals?
McCarty: “Stay out of our business and focus on enforcing the ordinances already in place.”
Shafer: “I’d like it to stay the same. During the time frame I was renting out our spare room, I wasn’t bothered at all. These types of services are opening up Fort Worth to a new class of visitor, and that’s a boon for the economy and community. We need to make sure that corporations and their political cronies don’t mess up a good thing!”
Anonymous: “To keep their regulations out of my private property usage.”
TS: What do you think of the argument that unless taxes are raised on short-term rentals, property taxes will have to increase?
McCarty: “The property tax issue is due to overspending by the government. It is not a revenue issue.”
Shafer: “I think it’s silly. These taxes fundamentally fund different types of things. Texas’ Tax Code is very specific about what Hotel Occupancy Taxes can be used for, and I don’t see an area of overlap. Local officials will use most any excuse to raise property taxes or use it as a political bludgeon, and that seems to be what they’re doing in this case.”
Anonymous: “Property taxes are already paid by the owners. Short-term rental taxes would be double taxation.”
TS: With recent signals that Fort Worth may be preparing to change policy on short-term rentals, what advice would you give voters in Fort Worth?
McCarty: “I’ve been giving voters the same advice for 10 years. Pay attention and get involved!”
Shafer: “I’m quite disappointed in the signals I’m seeing. Voters need to be in contact with their elected officials and be on the lookout for attempts to persecute short-term rentals. Let them know you’re watching and weighing their actions in your voting decision.”
Anonymous: “Object to government control of your property.”