We've been meaning to post the Texas Court of Appeals' opinion in Zaatari v. City of Austin, No. 03-17-00812 (Nov. 27, 2019) for some time.
The City of Austin adopted an ordinance that, among other things, prohibited short term rental of a residence that is not also owner-occupied, barred certain activities (such as weddings) on other properties, and permitted City officials to enter such properties to ensure compliance with the regulations. Property owners challenged the ordinance, and the State of Texas intervened as a plaintiff. The trial court granted the City summary judgment.
The court of appeals reversed:
The ordinance provision banning non-homestead short-term rentals significantly affects property owners’ substantial interests in well-recognized property rights while, on the record before us, serving a minimal, if any, public interest. Therefore, the provision is unconstitutionally retroactive, and we will reverse the district court’s judgment on this issue and render judgment declaring the provision void. The ordinance provision restricting assembly infringes on Texans’ fundamental right to assemble because it limits peaceable assembly on private property. Therefore, because the City has not demonstrated that the provision is narrowly tailored to serve a compelling state interest, the provision violates the Texas Constitution’s guarantee to due course of law, and we will reverse the district court’s judgment on this issue and render judgment declaring the provision void.
Slip op. at 2.
The good stuff starts on page 16 of the slip opinion, where the court concluded that the ordinance is unconstitutionally retroactive. The owners have a settled property right to rent their properties, and the ordinance "eliminate[d] well-established property rights that existed before the ordinance's adoption." Slip op. at 17. The City did not show a compelling interest in regulating these properties, but even if it had done so, on balance the settled expectations of property owners would have outweighed the government's interest.
The right to use property includes the right to rent it, and although it may be regulated to some extent, the City even admitted that "Austinites have long exercised their right to lease their property by housing short-term tenants." Slip op. at 22. The ordinance resulted in a total elimination of that right.
The owners and the State also raised a takings claim, but "having determined that [the ordinance] is unconstitutionally restrictive, we need not address the State and the Property Owners' remaining constitutional challenges to that same section." Slip op. at 23.
Check it out. The entire opinion is worth reading.
Zaatari v. City of Austin, No. 03-17-00812-CV (Tex. Ct. App. Nov. 27, 2019)
