Key takeaways
- Texas lacks a statewide licensing policy for short-term rentals (STRs).
- Many Texas counties and cities have enacted their own STR ordinances in recent years or are considering STR governance.
- STR laws are inconsistent among Texas counties and municipalities.
- The costs and confusion associated with hosting STRs in Texas have many property owners eyeing alternatives to traditional STR platforms.
- PadSplit can be beneficial and more profitable for property owners who desire to maximize their rental income by transitioning from short-term to mid-term rentals.
As more Texas counties and cities adopt strict short-term rental (STR) laws, some property owners are re-evaluating how to best utilize and market their rental properties.
One potential solution is a change from short-term rentals that rely on STR platforms to mid-term rentals, such as those facilitated by PadSplit. Like short-term rentals, affordable mid-term rentals are in high demand in Texas.
But mid-term rentals and their hosting sites are not subject to the same regulatory patchwork that makes operating STRs increasingly complicated and expensive. This can make the switch to a mid-term rental marketplace like PadSplit an attractive—and profitable—option for property owners.
The state of Texas’ short-term rental rules
Texas does not currently have a statewide licensing requirement for STRs, though STR operators are obligated to register with the Texas Comptroller’s Office and collect the state’s hotel occupancy tax (HOT).
County and city governments have the authority to establish local STR statutes. They are also entitled to levy their own HOTs.
Texas hold ’em: Efforts to limit local STR codes stall
In 2023, the Texas House of Representatives advanced House Bill 2665, which would have temporarily prevented cities from instituting STR policies and created a task force to assess the effects of municipal STR laws already in place. That bill failed in the 2023 legislative session.
Similarly, House Bill 2767, a measure that would have prohibited municipalities from regulating online marketplaces, including STR platforms, crashed in the 2025 legislative session. Meanwhile, a growing number of counties and cities in the Lone Star State have passed new STR ordinances, revised existing STR rules, or are considering STR guidelines.
Why the rise in Texas STR laws?
In 2025 alone, several Texas cities—notably Austin, Garland, and Houston—joined the likes of Corpus Christi, Dallas, Fort Worth, and San Antonio in governing short-term rental properties at local levels.
The uptick in STR regulations is fueled by a few prominent factors:
- The absence of a state framework to administer STRs
- The escalating popularity of STRs
- The surging revenue associated with STRs
- The multiplying legal issues linked to STRs
Short-term rental use and revenue skyrocket
The number of short-term rental users has grown every year since 2020. STRs rebounded from the COVID-19 pandemic in 2021 with about 50 million users, and users are projected to reach about 66 million in 2025.
The market for short-term rentals increased as well. Conservative estimates indicate that STRs jumped from about $29 billion in revenue in 2023 to $32 billion in 2024, and are forecast to surpass $36 billion in 2025.
Full-court press: Lawsuits take aim at STRs
As short-term rentals become more prevalent and generate more revenue, STRs have also become the target of public complaints and lawsuits.
Texas courts have heard at least a dozen legal cases related to STRs since 2018, and a couple have advanced to the state Supreme Court. In response, many Texas counties and cities have passed rules that provide structure for STR operations and compliance enforcement.
Common Texas STR law provisions
STR policies vary widely by county and municipality, but they generally define a short-term rental as any residential dwelling that is rented for less than one month.
Some statutes further specify the types of dwellings deemed residential, such as apartments, condominiums, and single-family homes. Many stipulate a maximum number of consecutive days the property may be rented.
STR host responsibilities and liability
Local STR laws in Texas typically detail host responsibilities—routinely referred to in statutes as “licensee/operator responsibilities”—and often contain provisions that mandate:
- Fee-based licenses or permits that must be renewed annually or biannually
- STR platforms such as Airbnb and VRBO to collect and remit state and local HOTs from hosts
- Adherence to zoning regulations regarding residential and mixed-use properties
- Observance of residential occupancy limits and noise restrictions
Liability for violations may rest with the property owner, host, hosting platform, or a combination thereof, depending on the municipality and circumstances.
Variances in Texas short-term rental rules
Most local STR codes share common ground regarding licenses and taxation, although they differ in licensing frequency and tax rates. But some STR laws feature unique directives, and others diverge when it comes to operational particulars.
For example, Houston’s recently adopted short-term rental ordinance requires owners and operators to undergo human-trafficking awareness training. Some Texas municipalities cap how many STR properties a host can operate within city or county limits and set a minimum distance for how close those properties can be to one another.
Contrasting legal standards for owners, tenants, and HOAs
Several STR statutes bar rental tenants from applying for STR licenses or permits. Others allow rental tenants to seek STR licenses if their leases authorize subletting and STR use.
Local STR laws also vary in the extent to which homeowners’ associations (HOAs) can enact their own short-term rental policies. Because STR rules have subtle and significant deviations, it’s crucial for property owners and real estate investors to consult their local ordinances to ensure ongoing compliance.
Moving away from standard STR platforms
For many property owners, the ratification and evolution of Texas STR laws are accompanied by confusion, rising costs, and liability concerns. Property owners searching for an alternative to conventional STR marketplaces may find value in shifting from short-term to mid-term rentals.
For instance, PadSplit helps property owners maximize their rental income by offering private rooms in shared spaces. Resident stays can last a few months or more without the need for long-term leases or the worries associated with STR regulations.
PadSplit advantages for hosts
PadSplit’s host benefits compared with conventional STR platforms, such as Airbnb, include:
- Greater revenue and higher occupancy rates
- Access to a diverse range of screened potential residents
- Longer guest tenures and less turnover
- Simple management tools
- Broad advertising power across Google, Facebook, and major housing sites
- Manageable regulatory risks
PadSplit also fosters positive community impacts by allowing property owners and real estate investors to tap into the soaring demand for affordable rental housing. PadSplit members save an average of $366 per month over apartment rentals, and hosts achieve resident stability and steady income.
Unlock your property’s income potential
Want to learn more about how partnering with PadSplit can help you optimize your property’s profitability while helping to relieve the affordable housing crunch?
- Do the math: Check out our earnings calculator
- Take a closer look: View market insights like occupancy rates and room pricing by ZIP code
- Find inspiration: See what other property owners have to say in our host success stories
If you’re looking to increase your revenue, connect with PadSplit’s team of experts today. We’ll answer your questions and help you learn how you can earn 2.5x more revenue while making a community impact.
