Texas Supreme Court sets hearing on Dallas rental rules

Court sets arguments

The Texas Supreme Court will hear arguments Dec. 3 in Dallas’ dispute with short-term rental operators over where those rentals may operate. The case reaches the court after a lower court sided with operators and paused enforcement of the city’s rules.

Dallas has asked the justices to lift that stay while the legal fight continues. The city argues that the regulations do not prohibit short-term rentals across Dallas because owners may still offer them in commercial and multifamily areas. The restrictions apply to single-family residential neighborhoods.

Why Dallas adopted the rules

The Dallas City Council approved the regulations after residents raised concerns about housing availability, shootings and noise connected to large parties. City officials also say the enforcement pause has made it harder to register operators and collect hotel occupancy taxes, which support arts and tourism.

The city maintains that courts should not protect operators that do not contribute those taxes. Its request would restore enforcement while the broader dispute proceeds.

Operators’ objections

Operators argue that the rules are more severe than expected and would force most short-term rentals to close, rather than simply limit where they can operate. They say that outcome violates their property rights.

They also contend that nuisance cases involving short-term rentals represent only a small share of the businesses. The Dec. 3 arguments will place those claims against Dallas’ defense of its location rules and its request to end the enforcement pause.