Item3a.LuisBriones-STRPresentationToArtsCommission — original pdf

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Arts Commission Meeting Short-Term Rental HOT Tax Collection Background ● In 2016, Austin City Council passed an ordinance that would restrict short-term rentals where the owner doesn't live on the property; so-called "Type 2 STRs" would be phased out by 2022. Prior to the 2016 effort, Austin Council had passed their original (2012) ordinance, with further amendments in 2013. ○ The Texas Third Court of Appeals declared this ordinance unconstitutional in 2019 and later denied the City’s motion for reconsideration. ● The City of Austin has issued few Type 2 operating licenses for short-term Rental property owners in the past decade; ○ Unlicensed hosts cannot pay HOT tax without receiving penalties from Austin Code. ● Platforms need an agreement with the City to collect and remit HoT tax. Background (Cont.) ● Austin has grown to be the leading short-term rental market in Texas. ● Short-term rental platforms have taken action to prevent community nuisances and promote safety at listings. ○ Suspended dozens of listings for party violations. ○ ○ Blocked thousands of bookings during holiday weekends for hosts that have violations. ● Short-term rental platforms have entered into many of these agreement with different government Launched a 24/7 neighborhood support portal and a law enforcement portal. entities around Texas: ○ The State of Texas, Comal County, Abilene, Houston, Corpus Christi, Galveston, Glen Rose, Plano, etc. ● There’s momentum with some on council to pass a similar agreement in Austin. Cultural Arts Letter of Support ● Several arts organizations within the Red River Cultural Arts District and Austin Cultural Arts Division have signed onto a letter of support – encouraging City Council to adopt an agreement that requires STR platforms to collect HOT tax on behalf of hosts. Cultural Arts Supporters ZACH Theatre Red River Cultural District The Archive Theater Jarrott Productions KJ Sanchez American Records Rude Mechs The Hidden Room Theatre Penfold Theatre Company ● ● ● ● ● ● ● ● ● ● Ground Floor Theatre Color Arc Productions ● Candyce Lucien Rusk ● ● Gary Thornsberry ● Kirk Lynn (Associate Professor, Univ. of Texas at Austin) ● Gilbert & Sullivan Austin ● Salvage Vanguard ● Southwest Theatre Productions ● Max Langert (Cinnamon Path Theater & Airbnb user) The VORTEX ● The City Theatre Company ● ● Christina J. Moore, ScriptWorks Polling Background ● ● ● A recent survey showed voter support for both Short-Term Rentals in Austin and requiring STR Platforms to collect HOT tax in the City. Littlefield Consulting conducted the poll in December 2021 – interviewing 400 general election voters across all Austin City Council districts in Travis and Williamson Counties. The margin of error for this sample size and voter population is +/- 4.9% at the 95% confidence level. Polling Demographics ● Ethnicity ■ 69% White, ■ 7% Black, ■ 10% Hispanic, ■ 4% Asian-American, and ■ 5% Other ● Partisanship ■ 64% Democrat, ■ 14% Independent, and ■ 17% Republican ● Gender ■ 55% Male, and ■ 45% Female Polling Results ● The initial test on “Would you support or oppose an ordinance that would require short-term rentals companies to collect and send to the City of Austin hotel occupancy taxes?” ○ 63% of respondents supported the ordinance. ● Potential impacts of the ordinance were given to respondents. ○ The City would collect an additional $15-$20 million in HoT revenue: ■ Increased favorability from respondents by 63%. ○ Austin cultural arts organizations would receive more funding: ■ Increased favorability from respondents by 68%. ● After reading respondents both positive and negative statements on Hotel Occupancy Taxes, Cultural Arts tax recipients, the Austin tourism industry, and the affordability crisis, respondents were asked again. ○ 72% of respondents supported the ordinance, and ● Once learning how the ordinance could affect the City, support increased 9% and opposition decreased 8%. Summary ● ● ● ● As you are aware, cultural arts are the lifeblood of Austin. A thriving arts and cultural scene is crucial in attracting new business and visitors to the city. The city currently estimates that it collects between $4 to $5 million dollars in HOT tax on short-term rentals annually. If the city were to enact this agreement, an additional $15 to 20 million dollars could be collected annually. This would be a tremendous boost to Austin’s Cultural Arts Division, which is a recipient of Austin’s HOT tax dollars. Questions?