After a year of discussion, Fort Worth passed a revised short-term rental ordinance in February. The final ordinance was restricted by recent court rulings limiting cities’ ability to regulate short-term rentals around the country.
Yet, just four months later, the city is being sued by the Fort Worth Short-Term Rental Alliance for its own ordinance.
The lawsuit, which lists over 100 plaintiffs, argues that the city is violating property rights enshrined in the Texas Constitution by preventing people from operating short-term rentals. Most of the individuals and LLC’s listed on the lawsuit are based in Tarrant County.
During a year-long public input process, residents advocated for and against allowing short- term rental properties in areas of Fort Worth zoned residential. For months, the city council went back and forth between tightening or loosening rules for where short-term rentals would be allowed to exist.
Short-term rentals are properties whose owners may rent out on websites like Airbnb or VRBO.
The final ordinance makes several changes to what is required of short-term rentals operating legally in Fort Worth and essentially bans short-term rentals from operating in residential areas. The city was forced to scrap several options to regulate short-term rentals after a U.S. Court of Appeals case in Louisiana threw a wrench in Fort Worth’s proposed policies by limiting the city’s ability to differentiate between owner-occupied and investor-owned short-term rentals.
The city neglected its responsibility to create a new ordinance and stuck with the status quo, said Adrienne Bennett, board president of the Fort Worth Short-Term Rental Alliance. She owns one property in Fort Worth, which she began renting out as a short-term rental until code compliance opened up an investigation into her property.
“We felt like we had to go to another branch of government for the checks and balances to have our voice heard,” Bennett said. “We’re cautiously optimistic.”
When Fort Worth passed the updated ordinance in February, Mayor Mattie Parker said short-term rentals are an “evolving issue” in Texas and around the country.
“We’re not done listening,” Parker said in February.
The city defended its ordinance in a statement Friday.
“The City of Fort Worth’s approach to short-term rentals balances the preservation of neighborhoods and the support of tourism,” City Attorney Leann Guzman said in a statement. “The City looks forward to vigorously defending this lawsuit.”
Lawsuit alleged Fort Worth violates rights, asks to stop enforcement
The lawsuit argues that the city is violating property owners’ property rights, discriminating against homeowners by treating them differently, violating the Zoning Enabling Act and retroactively regulating settled property rights. It asks the courts to stop the city from enforcing the ordinance and for the city to pay the plaintiffs attorneys fees.
“The appellate courts and the Texas Supreme Court have been consistent that short-term rentals are not commercial activity,” said Graigory Fancher, a lawyer for the Fort Worth law firm Bourland, Wall, & Wenzel, who filed the lawsuit on behalf of the property owners.
The suit also accuses the city of Fort Worth of “monitoring and surveillance” of private property based on the city’s beefed up enforcement standards passed as part of the updated ordinance in February.
“No one is now safe from municipalities’ prying into homes and private lives to enforce the status of not remaining in a home long enough to qualify as a residential tenant,” the lawsuit states.
In a press release, the Short-Term Rental Alliance said many of the plaintiff’s fear retaliation from the City of Fort Worth and code compliance officers who are tasked with enforcing the city’s short-term rental ordinance.
When the city council passed the registration ordinance in February, it offered a path to operating a short-term rental in residential areas through requesting a zoning change, a process that requires approval from the city council.
“We’re not completely taking out your personal property rights, you still have the right to petition his council, like you would any other zoning change,” District 9 council member Elizabeth Beck said at the February meeting. “If you want to make your home an Airbnb, then it becomes incumbent on the neighborhood and what they want.”
Fancher said the zoning change does not offer a legitimate path to operating a short-term rental in residential areas.
“It’s a process that is heavily weighted against the homeowner and it frankly, is never going to happen,” Fancher said.
The ordinance also requires legal short-term rentals to register with the city, comply with a list of rules and pay taxes to the city. As of June 9, 27 properties were registered as legal short-term rentals, the city previously estimated that there are 120 short-term rentals operating in allowed zoning districts.
“The city was trying to say that it’s not a wholesale prohibition, because they’re still allowing it in certain areas,” Fancher said. “But that’s really a distinction without a difference.”
Past case law could point to future success or failure of suit
The lawsuit cites several court cases, including City of Grapevine v. Muns, where the court of appeals ruled in favor of property owners after they sued alleging the city’s ban was unconstitutional.
Tarr v. Timberwood Park Owners Association, which the lawsuit cites, resulted in the Texas Supreme Court ruling in favor of Tarr, who was renting out his home as a short-term rental.
Proponents of short-term rentals have argued homeowners associations and city governments alike don’t have jurisdiction to ban them, citing Tarr v. Timberwood. Opponents of short-term rentals say the court opinion works in their favor by expressly allowing cities and homeowners associations to limit the minimum duration of rental periods.
Tarr v. Timberwood was cited as precedent in an Austin-area case, which was also cited in the short-term rental alliance’s lawsuit, where homeowners challenged the city’s attempt to ban non-owner occupied short-term rentals in their entirety.
The Texas Court of Appeals in Travis County held Austin’s ban was “unconstitutional as a retroactive law.” The city has argued that decision only applies to the banning of short-term rentals currently in existence, not potential new ones.
“In cities up to this point, not only the city of Grapevine, but the city of Austin, also has been shown to be violating the Constitution in their prohibition of short-term rentals,” Fancher said.
The court decided the Austin case in Nov. 2019. Nearly a year later, the Texas Court of Appeals in Fort Worth upheld an Arlington ban on short-term rentals.
Dave Schwarte, a retired corporate lawyer and advocate against short-term rentals across the state, said Fort Worth’s ordinance is very similar to Arlington’s ban because it allows short-term rentals in some locations and excludes them from residential neighborhoods. Arlington’s ordinance was challenged in court and upheld in Texas 2nd District Court of Appeals in Fort Worth.
“I think the city of Fort Worth is in a very strong position,” Schwarte said.
The Texas Neighborhood Coalition, which Schwarte helps lead from his home in Arlington, worked with Arlington’s city attorney to provide background for the city’s case and a member of the group testified at the trial. Residents who oppose short-term rental in Fort Worth may be able to do the same in their city, he said.
“She had personal, first-hand knowledge of the misery that the short-term rental near her was creating, and I think personal experience from the citizens is critical for any court to consider,” Schwarte said.
The Short-Term Rental Alliance is also looking forward to sharing the experiences of their members in court, Bennett said. The property owners listed in the suit started operating one or multiple short-term rental properties for different reasons, Bennett said. For her, it’s a matter of fundamental constitutional property rights, she said.
“There are multiple people who are retired, living on fixed incomes… and it’s helping to supplement their Social Security, the limited funds that they’re living on,” Bennett said.
Litigation was a last resort, Bennett said. She felt the public input process ignored the concerns of short-term rental operators in favor of neighborhoods that oppose short-term rentals. Part of her organization’s goal is educating people about short-term rentals, she said.
“We are your neighbors too,” Bennett said. “Unfortunately to this point, we just haven’t haven’t been able to bridge that gap.”
Rachel Behrndt is a government accountability reporter for the Fort Worth Report. Contact her at rachel.behrndt@fortworthreport.org or via Twitter. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.
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