Texas Cities Continue to Refine Short-Term Rental Regulations
The regulatory landscape for short-term rentals across Texas continues to evolve as cities refine registration programs, strengthen enforcement mechanisms, and navigate ongoing legal challenges. While statewide legislation remains a topic of discussion heading into the next legislative session, local governments are continuing to adopt new ordinances, adjust permitting requirements, and expand compliance efforts.
June brought several significant developments for STR operators, including new registration programs in Central Texas, ordinance amendments in North Texas, major court activity in Dallas and New Braunfels, and important enforcement deadlines in Austin and Houston.
Here’s what Texas operators should be watching.
El Paso Adopts Hotel Occupancy Tax Collection Program for STRs
The El Paso City Council recently approved measures to strengthen Hotel Occupancy Tax (HOT) collection from short-term rental operators. City officials indicated that enforcement will begin with an extended education and outreach period estimated between three and six months before more active compliance measures are implemented.
For operators, the move reflects a broader trend among Texas cities seeking to ensure STRs are participating in local tax collection systems alongside traditional lodging providers. The phased rollout gives operators an opportunity to confirm registration and tax remittance requirements before enforcement begins.
Dallas Litigation Moves Forward at the Texas Supreme Court
One of the most closely watched legal battles in Texas continues to unfold in Dallas.
The City of Dallas filed its Petitioner’s Brief on the Merits with the Texas Supreme Court on June 10 as part of its effort to overturn lower court rulings that have prevented enforcement of the city’s 2023 STR restrictions. The Dallas Short-Term Rental Alliance and other property owners have until June 30 to file their response, with reply briefs due July 15. The Court has indicated no further extensions will be granted.
The case stems from Dallas’ attempt to prohibit most STRs in single-family residential neighborhoods. Lower courts have repeatedly sided with property owners and upheld an injunction preventing the city from enforcing the ordinance while litigation continues.
The eventual Supreme Court decision could become one of the most consequential STR cases in Texas, potentially shaping how far local governments may go when restricting STR activity through zoning regulations.
Fort Worth STR Restrictions Upheld by Texas Appellate Court
Another important legal precedent continues to shape the short-term rental landscape in Texas.
In Modern Builders, LLC v. City of Fort Worth, the Texas Second Court of Appeals upheld Fort Worth’s authority to restrict short-term rentals in single-family residential zoning districts. The court rejected arguments that property owners possess a vested or constitutionally protected right to lease homes on a short-term basis and affirmed the city’s ability to regulate STRs through its zoning code.
The case centered on Fort Worth ordinances that prohibit or limit rentals of fewer than 30 consecutive days in certain residential neighborhoods. Property owners challenged the regulations, arguing that the restrictions unlawfully interfered with private property rights and exceeded the city’s authority.
The appellate court disagreed, finding that the ordinances were rationally related to legitimate governmental interests, including reducing traffic and noise impacts, preserving neighborhood character, and maintaining the stability of single-family residential areas. As a result, the court upheld the regulations as constitutional and enforceable.
The decision has already been cited in recent briefs filed in the ongoing City of Dallas v. Dallas Short-Term Rental Alliance appeal before Supreme Court of Texas. Combined with recent court decisions in New Braunfels, the ruling reinforces the significant authority Texas cities currently possess to regulate short-term rentals through local land-use and zoning ordinances.
Irving Approves Significant STR Ordinance Amendments
The City of Irving adopted substantial updates to its short-term rental ordinance in May, making it one of the more significant local regulatory changes this year.
Among the new provisions:
- STR density on a block face is capped at 10 percent.
- Single-family homes may not offer more than one lease during a single lease period.
- Operators must provide a minimum of four off-street parking spaces or one parking space per bedroom, whichever is greater.
- Enhanced fire safety standards are required.
- Floor plans must be submitted as part of the registration process.
City officials described the changes as an effort to balance neighborhood concerns with the continued operation of legal STRs. The ordinance places increased emphasis on safety, parking management, and density controls while maintaining a pathway for compliant operators to remain active.
Richland Hills Launches Registration and HOT Compliance Program
Richland Hills is beginning implementation of a new STR registration and Hotel Occupancy Tax collection program.
City staff report that eleven STRs have already registered, while officials estimate at least twenty-five properties are currently operating within city limits. An outreach campaign is launching this summer to identify additional operators and encourage compliance.
The city is also considering future zoning amendments related to accessory dwelling units (ADUs). Current discussions include prohibiting ADUs from operating as short-term rentals, though city leaders acknowledge that future state legislation regarding ADUs could require additional adjustments.
Operators should pay close attention to registration deadlines. City officials have indicated that properties operating without registration may be subject to significant penalties, reportedly reaching $1,000 per day for ongoing violations.
Austin Enforcement Deadline Approaches
Austin operators face one of the most important compliance deadlines of the year.
Beginning July 1, online booking platforms will be required to display valid City of Austin STR license numbers and remove unlicensed listings when notified by the city. Austin officials have publicly stated that enforcement efforts are increasing as the deadline approaches.
Acknowledging a backlog of pending applications remain in review, city staff clarified in a recent memo that enforcement on listings with an application will be paused, however operators with other violations reported may have mitigation requirements imposed.
TXSTRA and ATXSTRA are actively monitoring the City’s licensing updates as it rolls out a software aimed at streamlining the application process. Join ATXSTRA’s community portal to stay informed.
Visit the Member Portal for more resources on recent regulatory updates and upcoming policy activities in our Regulatory Tracker.
Looking Ahead
The first half of 2026 has reinforced a trend that has become increasingly clear across Texas: cities are moving away from broad debates over whether STRs should exist and toward more detailed discussions about how they should be regulated.
Registration programs, tax collection systems, safety requirements, local contact provisions, and enforcement mechanisms continue to be the primary tools local governments are using to address STR operations.
At the same time, major court cases underscore that important legal questions surrounding property rights, zoning authority, and local regulatory power remain unresolved.
TXSTRA will continue to monitor developments across the state and provide members with updates, analysis, and opportunities to engage as these policies evolve. Members receive updates on emerging issues, proposed regulations, advocacy efforts, and opportunities to engage with policymakers. Not a member yet? Explore the benefits of membership today.