Southeastern Legal Foundation (SLF) filed an amicus brief with other organizations calling on the Fifth Circuit Court of Appeals to rein in local government and reverse an unconstitutional ban on short term rental properties that not only runs afoul of the Constitution but is also harmful to the local community.
The City of New Braunfels, Texas, enacted a ban on short term rental properties (STRs), claiming that they were “nuisances” that harmed the community. Property owners represented by Texas Public Policy Foundation sued, and the Fifth Circuit held that the government had to show concrete evidence proving that STRs would be a nuisance before it could ban them.
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Evidence proved there was no good reason for the ban. The city allowed STRs elsewhere, those STRs posed no issues in the areas they were located, and they did not detract from local property values. Even so, the case is back before the Fifth Circuit because the lower court ignored the evidence and let the city ban STRs anyway.
SLF and amici explain in their brief that it is a basic tenet of our longstanding property rights tradition in America that an owner can do what he wants with his property, so long as it is not harmful to others. Furthermore, America’s housing market requires new and innovative solutions to a dwindling supply of short term rental units. Short term rentals are an important part of our economy that allow Americans to temporarily live in certain places based on careers, tourism, and other factors that require flexibility and transience.
Courts have allowed the government to get away with overregulating property rights by only subjecting governments to the “rational basis” test—so long as the government can show a good enough reason for imposing a restriction, courts let it slide.
But since property rights are fundamental in America, regulations that severely limit or curtail the right to enjoy one’s property should be subject to a higher standard in court. The government must clearly show how a restriction on property serves the public interest.
The government may still regulate aesthetics and other issues that are important to neighborhoods, but lawmakers must show how doing so serves a public interest that outweighs a property owner’s right to use his property as he wants. Here, New Braunfels failed to do that and simply claims that it can ban short term rentals because it wants to.