Vacation rentals find welcome in smaller towns

LODGING

With home sales still sluggish, some properties are being turned into shortterm rentals in a move that creates both revenue and controversy as East Wilco towns grapple with the emerging trend.

In Hutto and Taylor where the housing shortage is not as critical as in Austin, short-term rental houses are a growing commodity. The capitol city just passed stricter rules for those types of lodging, including Airbnbs.

“You don’t want to have any town filled up with short-term rentals. You need a balance. I’m not worried about that happening in Taylor. I think there’s still room for people to come in and fix up some of these older houses,” said Sean Johnson, Taylor’s downtown and tourism director.

Short-term rentals — turning a home or other property into a vacation site or temporary lodging — are filling a gap in Taylor, which only has 100 hotel rooms while more are in the planning stages.

A Home2 Suites by Hilton hotel, 190 N.W. Carlos G. Parker Blvd. in Taylor, is opening in November, and a city spokesman said other inns have shown interest and are looking at available properties.

“Chain hotels are nice and they offer consistent quality so travelers know what to expect. But as far as getting a full character experience and getting to know a town, short-term rentals are probably the way to go for experiential travelers,” Johnson said. “They may come back and decide it’s a good place to live or retire. The more quality visitors we have come to town the better.”

Johnson himself has been living in a short-term rental since August when he came to Taylor from Mississippi to take over the reins of the tourism department. He said the experience has given him a great perception of Taylor and a feel for the Texas lifestyle.

RENTALS IN RESIDENTIAL AREAS

Short-term rentals, or STRs, are unique because they are located in residential areas, while hotels are generally in more commercial zones. Because they are part of a neighborhood, visitors can get a more close-up feel for the city.

David Legere is a developer whose company, Houses Sing & Sleep, owns two STRs on Third Street near downtown. He sees himself as an ambassador for the city.

“We have a guidebook that lists things to do in the area. We have coupons and offers from local places. We’re available to give people suggestions about things to do. They can contact us and we try to just help them have a good time in Taylor,” Legere said.

Legere began by renovating old houses in downtown Taylor and surrounding cities, but found he loved the history of the properties so much he didn’t want to sell them. So he started into the shortterm-rental business and found that it worked well for him. He enjoys providing hospitality and he personally meets guests in his houses to show them the amenities and welcome them to town.

He makes sure his rental homes are stocked with fresh flowers, a fruit basket, snacks, water and coffee for the guests.

While Legere says his most common guests are people visiting their grown children with families who have moved to Taylor or people traveling to sporting and fitness-tourism events, recently the investor has seen an uptick in executive rentals.

The advent of Samsung Austin Semiconductor and related businesses have drawn new tenants to the area.

Realtors say the rise in industry and in commercial interest has increased the demand for rooms which can be rented for a few weeks at a time. Legere says more is needed.

“We desperately need to bring more people to downtown Taylor and create a more inviting environment. There needs to be things to do down here. We need more and better choices for dining and entertainment. More people would not only support the vacation rental industry but local businesses. People beget people,” he said.

BENEFITS

Short-term rental properties benefit the city by helping tourism efforts, but there are other advantages as well. To be competitive and get good ratings, owners must keep the property in top condition. Neat lawns and fresh paint are a must. Cleanliness is a priority.

STRs are investment properties, so they do not receive homestead exemptions and pay more in property taxes. Short-term rentals are also subject to paying hoteloccupancy fees, an additional tax to the state and city for each night they are rented.

The short-term rental industry is new locally, and Taylor and Hutto are still developing protocols for ensuring SRT units are registered and paying occupancy taxes. Taylor now requires a special-use permit for new STRs which must be approved by the Zoning Commission as well as the City Council.

In Taylor, hotel-occupancy taxes added $363,112 in revenue to city coffers in 2024. The majority of that was from five hotels in the city limits, but vacation home rentals contributed $15,042.

A Hutto representative said the city didn’t have a similar list to share because they were in the middle of implementing a new and revamped policy.

One result expected to come from any new policies is increased enforcement of lodging registrations. A report from the Taylor city clerk showed nine SRTs were registered and paid lodging taxes in 2024, including Legere’s property.

But a quick search of Airbnb.com shows more than 25 homes in Taylor and a similar number in Hutto are listed as being available for a weeklong stay in October.

TAYLOR AND HUTTO RULES

Jared West, who owns a registered SRT on Tenth Street, got approval from the Taylor council in September to operate West Mansion, 2112 W. Lake Drive, as an unattended short-term rental property. Now, travelers can stay in one of the city’s first houses, a historic home built in 1887 that sits on almost 6 acres.

“It really helps families or people who need multiple bedrooms at less expense and allows them to all be together more than having separate hotel rooms. We can put a family together all at once, and a lot of people really like that,” West said.

The decision to make the home into an SRT was mainly a financial one. West said rising market appraisals on the house made the amount he would have to charge a long-term renter unfeasible.

“The property taxes kept going up and up. They have more than doubled on the house. It made no financial sense to keep it as a long-term rental. The alternative was to make it an STR to have a little more income to offset the taxes.”

Like Legere, West has his properties registered and pays hotel-occupancy taxes to the city and state. HOT funds can only be spent on events and projects that increase tourism, which in turn puts more heads in beds and helps the lodging industry.

While Taylor and Hutto are working on ways to capture the HOT funds from STRs, they are also striving to ensure the rented houses don’t become a nuisance.

“We know it’s a popular form of tourism as well as business travel to utilize short-term rentals so we’d like to create a better framework within the city than we have now,” said Daniel Seguin, a Taylor spokesman.

He added, “What we’d like to see in Taylor is a comprehensive ordinance that outlines when you can have a short-term rental, what expectation the city has of the owner when it comes to noise and trash and safety of their customers, making sure they have a safety plan, those sort of things. Currently that’s not in place.”

Seguin said once a city ordinance is adopted, staffers will make efforts to educate STR owners who are not registered and not paying occupancy taxes. Owners who want to get their paperwork in order before a new policy is enacted can contact the city’s Development Services Department at 512-309-6172.

Hutto is also working on ways to solidify the relationship between STR owners and the city. A spokeswoman said they expect to have new policies online in a few months. Cheney Gamboa, Hutto director of economic development, said Hutto isn’t feeling the squeeze Austin is in terms of housing shortages, so they are not concerned about STRs taking too much inventory. Hutto has several new residential developments under construction, including single-family, multifamily and build-to-rent housing.

“It’s really about the fitness of the property in the neighborhood. We definitely recognize the problems that could come with having short-term rentals in neighborhoods but we really haven’t had the need to address that at this point,” she said. “We also are more affordable than Austin proper, in terms of housing, so there’s not that pressure surrounding taking homes off the market for shortterm rental. Everything responds to the market.”

We try to just help them have a good time in Taylor.”

— DAVID LEGERE HOUSES SING & SLEEP

It’s really about the fitness of the property in the neighborhood.”

— CHENEY GAMBOA > edwardjones.com | Member SIPC HUTTO DIRECTOR OF ECONOMIC DEVELOPMENT