Short-term rentals in Fredericksburg, explained properly.

Section 20-221 makes it unlawful to advertise, offer to rent or rent a residential property in the city as a short-term rental unless a permit application has been filed with the Development Services department and a permit has been issued. A separate application is needed for each short-term rental, on the City's form, with the nonrefundable fee from the City's fee schedule. Under that schedule (Appendix A, Sec. 5.450) the fee is $300 for an efficiency or 1-bedroom unit, $500 for 2 bedrooms, $700 for 3, $900 for 4 and $1,000 for 5 bedrooms; the same fee applies to renewals and includes the initial inspection. A permit transfer costs $300 and a re-inspection $75. Each rental gets a unique permit number that stays with the property when ownership changes. Permits last one year, and renewal must be filed before the permit expires; a complete renewal that arrives after expiry is treated as a new application. The physical permit, showing the permit number, address, maximum occupancy, the 24-hour contact's name and phone and the expiry date, must be posted inside the rental where guests can see it. The Director inspects before issuing a permit and before each renewal, and again on a change of ownership, after changes that affect occupancy or safety, and after health and safety complaints. The owner or operator must schedule an inspection within 30 days of being told the application has reached that stage or risk denial. A failed re-inspection means denial, and a property cannot be occupied as a short-term rental while it is noted as in violation. The Code defines a short-term rental as renting a residence for transient or guest overnight lodging for fewer than 30 consecutive days, and says it does not include hotels or motels. Permits are public information.

Section 4.400 of the zoning ordinance says short-term rentals are permitted ("P") only in specific zoning districts, plus planned unit developments that name short-term rental as a permitted use. Reading the City's table cell by cell: an accessory-unit rental (STR-ADU) and a B&B-type rental (STR-B&B) are permitted in R-1, R-2, C-1, C-1.5, C-2, CBD, MU-1 and MU-2; an STR facility (up to eight units on one lot) is permitted in C-1, C-1.5, C-2, CBD, MU-1 and MU-2; and an unoccupied rental (a dwelling that is not an accessory unit or B&B) is permitted in C-1, C-1.5, C-2, CBD, MU-1 and MU-2, and in R-1 and R-2 by special exception only. The table has no entry for R-1-A, R-3, R-4, R-5, Rural Residential, the industrial districts, M-1 to M3, OS or PF. A special exception for an unoccupied rental in R-1 or R-2 is available from the zoning board of adjustment only if the property shares lot lines with an existing unoccupied short-term rental or with CBD, C-2 or PF land, and more than 50 percent of the properties within 200 feet are unoccupied short-term rentals or zoned CBD, C-2 or PF (Sec. 20-223). Special exceptions are also available for a higher occupancy limit, a parking exception, and first-floor use in the historic shopping district overlay. We did not read the district sections, the zoning map or the planned unit development list, so confirm your address and district with the City's Development Services department before you buy. The City also posts a searchable short-term rental map and a zoning lookup.

The Code sets four kinds of short-term rental. An accessory-unit rental (STR-ADU) is a rental in a lawful accessory dwelling unit on the same lot as the main house, where the main house is either the owner's homestead (shown by a current homestead exemption with the Gillespie Central Appraisal District) or the primary residence of the 24-hour contact (shown by a sworn affidavit with the application). A B&B rental (STR-B&B) operates on a residential property where the owner, operator or 24-hour contact lives as their principal residence (homestead exemption or sworn affidavit). Each bedroom unit in a B&B needs its own permit, up to a maximum of four units. An STR facility is a complex under one owner or operator with up to eight units on one lot, and each unit needs its own permit. An unoccupied rental is a short-term rental in a lawful residential dwelling that is neither an accessory-unit nor a B&B rental. These types decide which zoning districts allow the rental (see Where STRs are allowed). Note: the City's permit FAQ page words some of these definitions differently and mentions an "STR-Condo" type that we did not find in the Code; we followed the Code text.

A new permit application is required, before renting under the new ownership, when more than 50 percent of the ownership interest in a short-term rental changes, including a transfer of interest in a company that owns it (transfer fee $300). Where a property's district no longer allows short-term rental by right, the new owner must apply within the time the zoning ordinance allows to continue a nonconforming use (Sec. 6.110, which we did not read); if the new owner misses it, the use must stop. Rentals with a lawful permit on the ordinance's effective date had to meet the life safety, contact, signage, food service, host rules, conduct, hotel tax, application and advertising rules when they next renewed, but are exempt from the occupancy and parking limits. A holder who cannot renew because of noncompliance must stop within 60 days of the denial notice.

Section 20-222 limits a short-term rental to two persons per bedroom plus two additional persons, and never more than 12 occupants in total. An owner may state a lower maximum on the permit application or in the ad. A room that does not meet the life safety rules cannot be counted or advertised as a bedroom. The owner or operator must provide one on-site parking space per bedroom operating as a short-term rental, and it is unlawful for an occupant to park on an unimproved surface or for the owner or operator to allow it; tandem parking is permitted if no vehicle blocks a public right-of-way. A special exception from the zoning board of adjustment can raise the occupancy maximum or excuse part of the parking requirement. The occupancy and parking limits do not apply to rentals that held a lawful permit when the ordinance took effect (Sec. 20-226).

The owner or operator must name a 24-hour contact: a local responsible party who can be reached in person or by phone at all times during any guest's stay, and who is authorized to make decisions about the premises and its occupants. When the Development Services director, the police department, code enforcement or other City staff call, the contact must respond within 30 minutes and either resolve the issue or be at the property within one hour. The contact's name and phone number go on the posted permit and in the host rules packet. An unresponsive 24-hour contact is a major violation.

A listing may not be published, or allowed to be published by someone else, without the City permit number, the occupancy maximum, the maximum parking capacity, the host rules and a street-view image of the front of the property. Any ad online or in print for a stay of fewer than 30 days is treated as prima facie evidence that the property is used as a short-term rental. Signs must follow the City sign ordinance (Chapter 29); a nameplate sign of up to two square feet attached to the building is allowed. The owner or operator must post a host rules packet in a conspicuous place with at least: the maximum number of occupants; where to park and the ban on unimproved areas; quiet hours (10:00 p.m. to 7:00 a.m. in residential zones); waste pick-up and bin locations; exterior lighting (Dark Sky) rules; the 24-hour contact and operator names and numbers; emergency evacuation steps if relevant; emergency and non-emergency dispatch numbers; and a notice that breaking City ordinances is a violation for which an occupant may be cited. Unlawful advertisements are a major violation.

Section 20-222(d) requires working smoke alarms that meet Texas Property Code Sections 92.254 and 92.255, with at least one on each floor or level, one in each bedroom and, where several bedrooms share a corridor, one in the corridor near the bedrooms. At least one working carbon monoxide detector is needed on each floor if the home has natural gas, propane or an attached garage. At least one 2A:10B:C fire extinguisher (a standard five-pound unit) must be available on each floor, inspected annually under the International Fire Code and tagged by a third-party inspector. Gas appliances must be properly vented outside, each bedroom needs at least one means of egress opening directly outdoors, pools and spas must meet the International Property Maintenance Code, and the property must meet the setback rules in zoning Sections 7.330 and 7.340. A room that fails these rules cannot be used or advertised as a bedroom, and a bedroom door must stay locked while the home is rented.

An owner or operator may not rent for less than one night. Owners, operators and occupants must follow the City Code, and owners and operators must tell guests that they can be cited, including for violations of the noise ordinance (Chapter 20 Article VI, including on decks, patios, pools and hot tubs), the trash ordinance, the outdoor fire rules and the exterior lighting (Dark Sky) rules. Using the rental to sell illegal drugs, to sell alcohol or do anything else that needs an Alcoholic Beverage Code permit, or as a sexually oriented business is prohibited. Only overnight guests may be served meals, limited to a continental-type breakfast, unless the facility meets State and Gillespie County commercial food service requirements. Within ten business days of any change to the information on the permit application (other than a change of ownership) the owner or operator must file an amended application. A long-term rental of 30 or more consecutive days may be used without losing the permit only if staff are notified under Sec. 20-226(d).

The City can cite the owner, operator or any occupant right away. Violations are minor (rule breaches of Sec. 20-222 that do not threaten health and safety) or major (health and safety, occupancy, noise, failing to update application information, an unresponsive 24-hour contact, not remitting hotel tax, unlawful advertisements and operating without a permit); three minor citations in 12 months count as one major violation. If an owner, operator or occupant accumulates three major violations in 12 months, the Director refers the permit to City Council, which may suspend it for up to 90 days. Five or more violations of other laws or City Code provisions in 24 months at the property can also be referred, with a 90-day suspension possible. If a permit is referred more than twice in 24 months with no change of ownership, Council may revoke it or suspend it for 90 to 180 days. Failing to pay hotel tax after a delinquency notice from the Finance department brings a 90-day suspension. A denial of a new or renewal application can be appealed to City Council by a sworn appeal filed with the Director within 20 days; enforcement is paused during the appeal, and Council hears it at the next regular meeting after 14 calendar days. Court review is in Gillespie County. The fine amounts for citations are not set in this Article.

Chapter 41 Article IV of the City Code taxes the cost of occupancy of a room or space furnished by a hotel at seven percent of the amount paid, where the price is $2.00 or more a day, exclusive of other occupancy taxes charged by other government agencies. Permanent residents of a hotel are not taxed. Whoever owns, operates, manages or controls the hotel must collect the tax, and using a booking service does not relieve them of responsibility. A report is due on the last day of the month after each calendar quarter, with payment at the same time and a copy of the quarterly or monthly reports filed with the Texas Comptroller. A collector may keep up to one percent of the tax as a collection fee. A late or missing payment brings a 15 percent penalty and the loss of that fee. The permit rules also require a short-term rental owner or operator to contact the City Finance department before submitting the permit application and to remit all hotel taxes on time. A rental that is paused for repair, owner use or long-term rental to protect its permit must file a zero-dollar report each quarter. The State of Texas 6% hotel tax is separate and is reported to the Comptroller (see State law that also applies). We did not read any county or other local lodging tax, so we do not give a combined total.

Texas Tax Code § 156.052 sets the state hotel occupancy tax at 6% of the price paid for a room, and § 156.051(a) applies it to rooms or spaces costing $15 or more a day. Section 156.001(b) makes a short-term rental (renting all or part of a residential property to someone who is not a permanent resident) a "hotel" for state and local hotel occupancy taxes. Stays of at least 30 consecutive days, with no interruption of payment, are not taxed (§ 156.101). Local hotel taxes are added on top and vary by city and county.

Whoever owns, operates, manages or controls a hotel must collect the state tax (Tax Code § 156.053), and the Comptroller's office treats short-term rentals the same way. The Comptroller does not issue printed hotel tax permits; a business that reports the tax sends Form AP-102 (Hotel Occupancy Tax Questionnaire) to the Comptroller. A short-term rental platform that has agreed with the owner to collect and remit state hotel tax files Form AP-102 itself, and an owner who rents only through such a platform does not collect and remit the state tax. An owner who takes bookings directly or through a platform that does not collect must collect and remit the state tax. Local hotel taxes are handled separately by the city and county.

Each calendar month is a reporting period, with the return and tax due to the Comptroller by the 20th of the following month (Tax Code § 156.151(b)). A taxpayer who owes less than $500 for a month or $1,500 for a quarter files quarterly, due the 20th day after the quarter ends (§ 156.151(c)). The Comptroller allows a 1% discount when the return is filed and paid on time.

Cities, some counties and special purpose districts may levy their own hotel taxes, generally up to 7%, and sports or community venue projects may add up to 2% (Dallas County up to 3%). Local hotel taxes apply to sleeping rooms costing $2 or more a day. The Comptroller collects only the 6% state tax; cities and counties collect their own local hotel taxes, so hosts should check with the city and county where the rental is.