The Katy City Council Monday passed an ordinance to set standards for city residences being used as short-term rental properties.

Under the ordinance, which passed on a 4-1 vote, property owners wishing to use their property for short-term rentals must first apply with the city. A new application fee is $300. A renewal application is $200. An inspection fee is $50.

Property owners must also supply proof of qualifying general liability insurance and hotel occupancy tax registration. City planner Rachel Lazo said the appropriate paperwork would be placed on the city website and be processed through the city's permits department.

On the hotel occupancy tax collection and remittance, Lazo said up to 7% is paid to the state. Lazo said some listing sites, such as Airbnb, VRBO, and HomeAway, collected such taxes and paid them to the state. Under the new ordinance, an additional 7% rate would be paid directly to the city by the property owner.

Property owners would be required to provide a site plan with parking identified, a floor plan, ingress/egress, and fire extinguishers. In case of emergency, she said, the information would help with safely navigating a property. Lazo said after the city approves an application, the property would be inspected to ensure compliance with applicable codes.

Lazo said under the ordinance, properties could not be used as a wedding or event venue. She said the ordinance prohibited tents, hammocks, RV/campers or vehicles to be used as a short-term rental.

Lazo said repeated code violations could lead to permits being revoked.

Don Rao, former Ward B council member, said the ordinance was much needed in the city.

“We’ve been dealing with this issue since November in our neighborhood,” Rao said. “It hasn’t gotten any better. Hopefully, this will help everybody.”

Rao said he hoped the new ordinance would benefit city residents both in terms of safety and protecting property values.

“Our quality of life is being reduced every day,” Rao said. “We have no idea of who is coming and going. They use our street (Magnolia Street) for drag races. Cars and trash have been allowed to sit outside the house for three weeks at a time.”

Rao said he and his neighbors “might as well be living next to Motel 6, but at least Motel 6 knows who their guests are.”

One Katy couple that owns a local Airbnb told the council their experience with their guests was different from what Rao described.

Charles and Debbie Dowdell own property at 2218 Ave. A. Charles Dowdell said they have used that property as an Airbnb for the last four years and it served as a long-term rental before that.

“We’re very sorry to hear that terrible story, because that’s not our experience,” Debbie Dowdell said, adding that they inspect their property regularly. She said they wanted to work with the city.

“It matters to us very much that it’s a plus for the community, and not a negative, because we care about Katy,” Dowdell said. “We put our kids through school here.”

Ward A Council Members Dan Smith and Janet Corte, Council Member-at-Large and Mayor Pro Tem Chris Harris, and Ward B Council Member Rory Robertson voted for the ordinance. Ward B Council Member Gina Hicks voted against the measure. She said she felt the ordinance was an overreach on the part of the city. Homeowners’ associations should make such rules, she said.