Northeast Dallas neighbors’ claims about ‘party house’ illustrate why city must regulate short-term rentals

When Alison and Michael Hannah sold their home in the Lochwood neighborhood of northeast Dallas last summer, something was wrong – Alison couldn’t quite tell what -.

Just weeks after leaving everything in mint condition to welcome the new owners, Alison learned the truth from one of her former neighbors: No family moved in – instead, the 4,000-square-foot home would be advertised online as a short-term rental with space for up to 22 people.

Alison and Michael know a thing or two about real estate. Not only are she a seasoned mortgage banker, the couple have owned long-term rentals and flipped many homes over the years.

“We would never have sold the house – at any cost – in a million years if we had known this was going to happen,” Alison said. “We’re from the neighborhood.”

What the Lochwood home buyer did is 100% legal. The same could happen to the house next door of any of us, as Dallas hasn’t done anything useful to regulate the booming short-term rental business.

Lochwood House went live on VRBO and Airbnb platforms in August and – in the midst of a pandemic – was added to the stay described as the perfect corporate or group vacation retreat with a resort-style pool and selection of on-site activities.

Immediately, say the surrounding neighbors, their late summer weekends were destroyed by days of parties. They described loud music and brawls, smelly and overflowing trash cans, and dozens of fast moving vehicles parked in front of fire hydrants and other illegal locations.

Lochwood residents who have raised short-term rental concerns in their neighborhood include, from left, Caton Cadigan, Mary Nagler, John and Terry Kohl, Sharolyn Parker and Shelby Gibbs.(Juan Figueroa / employee photographer)

Over the Labor Day weekend, residents regularly reported complaints to 911, the city’s 311 service line, the property’s owner and manager, and any other option they could find through the online rental sites.

Signs saying “We say no to VRBO” sprouted all over the neighborhood. Most recently, the residents launched the website and prepared a petition asking for help from the town hall.

“This house was built for a single family, not a commercial hotel … with up to 22 people and their party guests and yoga or cooking classes,” said neighbor Mary Nagler, a 36-year-old counselor and mother of two preschoolers me.

The nongovernmental owner of the home, whose company owns several Dallas rentals, told me none of the neighbors’ allegations were true.

She declined to go into details on the file, other than the fact that the house is currently a month-long rent. In fact, the property was removed Thursday by Airbnb and Vacation Rentals By Owner, better known as VRBO.

Due to the ongoing controversy surrounding the neighborhood, the owner did not want her name to be used.

Ugly tales like the one in Lochwood are unraveling in neighborhoods across Dallas: Angry neighbors who say their quality of life and even their safety are under attack. Short term landlords who say the complainants are not honest. People on both sides creating a stinking pit of naming, social media threats and disgusting allegations – some with racist overtones, too.

White Rock Creek erosion has severely impacted the Tenison Glen Golf Course in Samuell Grand Park.  The master plan therefore envisages converting it into a 9-hole course and converting the eastern section into a nature reserve.

The core problem isn’t the Lochwood home – or any of the other short-term rentals that are causing hardship. The fact is, the city has not yet addressed an issue that, without proper regulation, could threaten stable neighborhoods and housing in Dallas.

Starting Tuesday, the city council has an opportunity to take control of this issue – and even take the lead in what has become a nationwide short-term rental problem.

A city-appointed task force spent much of 2020 working out various regulatory options. Now the Quality of Life Committee will receive these recommendations and set a decision-making course for the entire city council.

Over the past few days, committee members have heard from residents concerned that the task force did not have enough voices from the neighborhood and asked to be heard before making recommendations to the entire council. With so many council members up for re-election this spring, the stakes are particularly high to make that happen.

I’ve been researching the problem for weeks, and it makes sense for the city to at least investigate whether short-term rents in single-family areas are condos. Some voters, especially those living in neighborhoods with problematic homes, want a complete ban on real estate in single-family areas.

Nobody, including the city of Dallas, knows exactly how many short term rentals operate here.

The city is asking short-term landlords to register their property and pay hotel occupancy tax. As of December 31, 736 properties had done so; Another 1,425 were classified as requiring registration.

Some short-term rental industry observers believe the number of properties in Dallas could go as high as 5,000.

More than two dozen More than two dozen “We Say No to VRBO” signs line the blocks around a Lochwood property that went online as a short-term rental in August. The owner converted it to long term rental this month and removed its listing from Airbnb and VRBO.(Juan Figueroa / employee photographer)

Opponents of short term rentals argue that the properties are indeed hotels and are banned in single-family neighborhoods as the city requires them to pay hotel occupancy tax.

However, prosecutor Chris Caso pointed out a code language that defines a hotel as “a facility with six or more guest rooms that are rented to residents on a daily basis.”

He said renting all or part of a home to someone who is not permanent resident would meet the definition of a hotel for tax purposes, but would not meet the definition of “six or more guest rooms” for zoning purposes.

If your head is going to explode at that point, I’ll be right there with you. Now you can understand why Lochwood’s neighbors – and residents elsewhere in Dallas – are so frustrated.

The Lochwood house, operated by a multi-property non-state corporation, is also one of many local examples breaking Airbnb and VRBO marketing strategies that characterize rentals as “mom and pop” operations designed to help them to make ends meet.

The Wall Street Journal reported last year that, according to market research firm AirDNA LLC, only a third of Airbnb’s U.S. listings for condos or apartments – with the exception of shared rooms – come from hosts with a single property. Another third is operated by hosts with two to 24 properties. The remaining third concerns hosts with more than 25 properties.

Among Lochwood’s neighbors who are concerned about the crowds who haunted the short-term rental – especially before the weather turned cold – are Terry Kohl, 70, and her husband, John, who is 80. The property has “deprived us of the peaceful use of our own property,” Terry told me.

The Kohls have had a tough time the last ten years. In 2013, John was still recovering from a long battle with cancer when he was ambushed while walking on nearby Lake Highlands Drive.

He suffered broken bones and head trauma, and has since experienced years of surgeries and ongoing health problems. The stream of screeching cars, roaring music, and pool parties of 20 to 40 people didn’t help, Terry said.

“It seems that the owner is taking advantage of the neighborhood by running a business at our expense.”

Undoubtedly, the city has many perspectives that need to be considered when considering the short term rental issue. However, the property rights of the operators must not be considered more important than the rights of the rest of us.

We buy houses with the expectation that we will live as single-family houses in a neighborhood – not next to hotels – according to our crime restrictions.

Lochwood’s mother, Mary Nagler, said it best, “It’s no fun living next to a party house and I still don’t understand how you can legally do it.”

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