Austin's rules on short-term rental units – those vacation rentals on apps and sites like Airbnb and Homeaway – are under fire at the Texas Capitol. House lawmakers heard testimony Thursday on a bill that would override the city's ban on properties in residential areas that aren't owner-occupied.

Richardson Republican state Rep. Angie Chen Button said the bill would prohibit "arbitrary" bans on those properties. She said they inhibit an industry that brought more than $3 billion into the state's economy last year, according to a recent analysis.

Austin was one of the first cities in Texas to regulate short-term rentals, but its rules specifically targeted homes rented out by people who don't live in them full-time – known in city code parlance as "Type 2" properties.

Daniel Armstrong, a code enforcement officer with the city, told the House Urban Affairs Committee the bill would kneecap Austin's enforcement efforts against properties that perennially violate noise, parking and nuisance ordinances. Armstrong, a former police officer, said those complaints typically come between 2 and 5 a.m.

“It’s been my experience and observations with homestead STRs, that they are not the bad actors because the property-owner still lives in their home and still cares about their neighborhood," he said.

Assistant City Attorney Patricia Link told lawmakers the bill, as written, was vague and didn't clearly define restrictions a city could impose. For example, a city could adopt its own permitting process on a block-by-block basis, she said, like one that was adopted in San Antonio. She also said the bill wouldn't allow a city to effectively address properties with multiple complaints.

"Many of the provisions in [the bill] are vague to such a degree that this bill, when utilized by Texas cities, will actually encourage litigation," she said.

Austinite Sharon Walker, who runs a vacation-rental business, said Austin's current rules violate the rights of property owners. She said she manages 50 properties – some owner-occupied and some not.

"We need protection from our overreaching City Council," she said. "The Texas Supreme Court has already ruled short-term rentals are a residential use of a home. But the Austin City Council have already put a complete ban – no matter what they tell you – they have put a complete ban starting in 2022.”

Representatives from Homeaway and the newly formed industry group Texans for Property and Rental Rights testified in favor of the bill, but admitted there was work to be done in allowing cities to effectively police bad actors.

Shortly after the city passed regulations phasing out Type 2 properties in 2016, it was sued by the Texas Public Policy Foundation, which alleged Austin was infringing on property owners' rights.

State lawmakers singled out Austin's rules last legislative session in an effort to create similar, uniform rules statewide – rules that would allow the rentals of investor-owned properties and override Austin's rules.

As the meeting closed, Button admitted there were no clear solutions as of yet, but that she intended to keep forging ahead to solve the issue that's plagued lawmakers for three sessions.

"Do we have all of the solutions? No," she said. "I can tell we still have a long way to go, but if we choose the easy way – to stay out of this issue – we are failing you as your state representatives."