Plano short-term rental property owners say they have rights, too

Dallas’ vibrant real estate market brought Ofir Bugana to the metroplex, where possibilities seemed as endless as the suburban sprawl.

Bugana is a realtor and investor who has sold to clients purchasing homes in Plano, where residents in the Plano Texas Neighborhood Coalition are fighting to prohibit short-term rentals in single-family neighborhoods.

Of the over 100 transactions Bugana has closed, she said about 80% of her clients bought for the purpose of turning the property into a short-term rental (STR), a property rented out for 30 days or less through platforms such as Airbnb and Vrbo.

The metroplex isn’t exactly a vacation destination, but Bugana said property investors consider D-FW one of the country’s premier hubs because of its expansion and population growth.

Single-family homeowners in Plano are fighting to keep them out of their neighborhoods and want City Council to create a solution.

Bugana owns short-term rental properties and feels she should be able to continue business as long as she isn’t bothering neighbors.

“Someone else can really come and tell you what to do with your house?” Bugana said.

All neighborhoods are zoned residential districts, according to Plano’s zoning ordinance. The ordinance prohibits hotels, motels and bed and breakfasts in those districts, yet Plano collects hotel occupancy taxes from the properties.

Residents are concerned about disturbances, loss of community and safety. Homes have been used as everything from party destinations to brothels.

In the early hours of Feb. 26, a bullet connected to a shooting outside of a short-term rental property on Cannes Drive in Plano went through the window of a nearby home.

Neighbors in the Oakwood Glen development called the police throughout the night about a party at the property. Guests made the booking through Vrbo, though the property was previously listed on Airbnb and Vrbo. Airbnb claims it blocked reservation attempts for the property that weekend through its screening technologies.

Over a dozen residents spoke against short-term rentals at Plano City Council Feb. 27.

“This is not something that someone living in a residential area should have to deal with,” Oakwood Glen resident Terri Frazier told City Council. “I feel like I live next to a bar. And now after the events of this weekend, I’m terrified.”

Residents hope Plano City Council adopts ordinances similar to Arlington’s. There, short-term rentals are prohibited from single-family residential areas but can operate with a permit in designated entertainment zones.

Plano has started developing a short-term rental registration program and has gathered data from other cities, but Plano Mayor John Muns told The Dallas Morning News the city likely won’t have a decision until the summer. Cities like Austin have faced legal trouble for short-term rental ordinances that the Texas Supreme Court said violated the right to peaceably assemble on private property.

Bugana said she supports owner and guest regulations, but not a complete ban on STRs from single-family residential areas.

“I think from an investment perspective we’re not going to have as many options like we do now,” Bugana said.

One client Bugana works with is Goldnest, a top-rated property manager in Plano, according to AirDNA. Tal Ifrah, co-founder of the company, said short-term rentals are preferred alternatives to hotels. When people visit places like Plano for business or other purposes, it’s more comfortable to stay in a home with several rooms and amenities than a hotel unit, Ifrah said.

Ifrah said Goldnest informs neighbors about the properties and is accommodating to residents concerned about disruptive guests.

“We are on the side of … the initiation of creating a city ordinance with strict rules of how to accommodate short-term rentals to avoid all of these party houses. This is not what short-term rentals are meant to be,” Ifrah said.

While Ifrah said residents are justified in their grievances, he thinks his property rights should be protected.

“I think a homeowner should be able to use his house the way he wants as long as it doesn’t bother others,” Ifrah said. “There’s a saying (that) in a democracy a person should be able to stretch as much as he wants as long as his elbow doesn’t hit someone’s nose, and this is how I see it.”

A compromise in Arlington

Arlington has been the template for how other municipalities hope to regulate short-term rentals, but every city is different.

Unlike Arlington, Plano does not have a designated entertainment district. If Plano does follow Arlington, City Council must determine where Plano’s STR- friendly zones will be.

Short-term rental advocates challenged the ordinances — which forced STRs out of neighborhoods and into the entertainment district — in court.

Ken Cox said the ordinances respect the rights of both neighbors and property owners. Cox and his wife own and manage luxury short-term rentals in Arlington’s entertainment district. He said he screens tenants and manages his properties at a high standard.

Not everyone managed their properties well. Cox said City Council decided right in imposing the ordinances.

“We would not have done this at this high quality because of all the competition in the neighborhoods,” Cox said. ” … For us, the Arlington ordinances worked very, very well.”

Compromise might be harder in Plano, where entertainment zones are less defined.

Defending property rights

Airbnb and similar marketplaces feel bad actors should not negatively impact responsible hosts.

“The majority of hosts in Plano are responsible neighbors who rely on the income from sharing their home to make ends meet and support the local economy. We want to continue working with our host community and local leaders to support fair short-term rental rules that protect the economic benefits of home sharing, the property rights of homeowners, and help address community concerns,” Airbnb said in a statement to The News.

In 2022, Airbnb generated $8.4 billion in revenue and ended the year with 6.6 million active global listings, according to the company website.

Vrbo is owned by Expedia Group. The company counts Vrbo as part of its lodging service, along with hotel bookings, according to Expedia Group’s 2021 Annual Report. The report says lodging accounted for 75% of the company’s total worldwide revenue and earned around $6.5 billion in 2021.

The 2021 report says as of Dec. 31, 2021, Expedia’s global marketplace had about 3 million lodging properties available with around 875,000 hotels and over 2 million online “alternative accommodations.”

Unlike traditional hospitality companies, Cox said, short-term rental platforms have seemingly endless supply.

“Airbnb is like a giant rubber band,” Cox said. “It can expand and expand as far as it ever needs to go. And it can shrink when occupancy goes down. Hotels can’t do that.”

Over 700 Plano homes are listed as short-term rentals, according to AirDNA. Of that figure, 59% are listed on Airbnb, 11% are listed on Vrbo, and 30% are listed on both, according to AirDNA.

Airbnb says home listings in Plano comprise approximately less than 0.4% of the city’s housing stock and that the typical host in Plano earned around $12,600 per year as of Dec. 31, 2022, according to stats and information The News obtained from the company. The company states that approximately 80% of hosts in Plano share just one home.

It also says that Airbnb has been falsely linked to issues involving other short-term rental platforms. Airbnb claims it works with communities to promote security, like offering free noise sensors and operating a 24-hour safety line.

A neighborhood support line allows residents to speak directly with Airbnb about concerns they believe may be connected to a listing on the platform, according to the company. In response to claims that the company encourages hosts to accept as many reservations as possible, Airbnb says it bans disruptive and unauthorized properties and enables hosts to cancel stays penalty-free for any booking it believes will result in a party.

The owner of the short-term rental connected to the Plano shooting on Feb. 26 told Fox4News that Vrbo, with whom guests booked the property, did not handle the case well. Vrbo did not respond to The News’ request for comment.

Similar complaints have been made against Airbnb. The company says it investigates incidents, but according to a 2021 report from Bloomberg, Airbnb boasts an internal safety team that works to prevent PR disasters and pays millions to make problems disappear.

Guest demand remained strong in 2022, according to Airbnb’s website.

“Imagine your life or your friends’ lives without having Airbnb around,” Bugana said. “Imagine if you only had hotels. It doesn’t even make sense anymore.”

Bugana and other property owners stand strong in their convictions.

“This is your property. You can do whatever you want in it,” Bugana said. ” …Especially if you regulate it in a way that it really won’t bother anybody else and if you work together.”