On Galveston Island’s west end, there are approximately 41 different resort subdivisions, each with its own set of deed restrictions. Only two neighborhoods ban short term-rentals via their deed restrictions.
In 2004, six property management companies organized the Galveston Association of Rental Managers (GARM), to proactively prevent additional deed restriction changes.
We worked closely with all the West End neighborhoods to create our strategy: good neighbor policies, universal registration, guest “code of conduct” forms, and most important, patrolling off-duty police who are available 24/7.
In 2010, a homeowner sought to amend the deed restrictions in her subdivision and ban vacation rentals. There were numerous meetings, and neighbors debated the idea among themselves. GARM also participated in the discussions.
Recently, I stumbled across this letter which was written anonymously by a homeowner in the subdivision in response to the proposed ban. Even though it was written several years ago, the positions presented in the letter are valid and relevant today. I have adapted and updated the letter in hopes that it serves as a template and provides positioning assistance to other companies, neighborhoods, and homeowners facing the same challenges in their communities.
A Letter to Our Friends And Neighbors Regarding Changing The Deed Restrictions In Our Subdivision:
A survey has been sent to everyone in our neighborhood proposing to change our subdivision deed restrictions to exclude short-term rentals. As you contemplate this proposal, there are various factors that should be considered.
Life can change, so maintain all your options.
It is risky to unnecessarily restrict property ownership rights. Storms come, finances change, or family dynamics shift. When these life events occur, property owners should not be restricted from adjusting their investments—including real estate investments—to meet their needs.
In our resort subdivision, for example, many large beach homes were built by the rich and famous of Houston. Those vacation houses were well used and enjoyed for many decades; however, the owners aged, as did the homes, and circumstances changed. Some of the homes became vacation rentals, which enabled the homeowners or their heirs to defray expenses while continuing to utilize the homes on occasion. The fact that these homes became rentals did not diminish the value of the subdivision.
Vacation rentals and renters drive the real estate sales market.
Vacation rentals are the driving force behind the real estate market on the West End of the island. Countless buyers start out as renters of vacation homes, learn to love the island and then purchase a home. Local Realtors® report that most clients won’t even look at beach properties in areas where vacation rentals are restricted. Even buyers who have no intention of renting do not want their options limited. It is frightening to think of trying to sell a home in Pirates Beach West if rentals were restricted. The number of buyers will be limited, and real estate values will go down.
Vacation rentals are not a problem in our subdivision.
If rentals were to become a problem, negotiations with the property management companies for more stringent policies would be a better solution than a drastic change in deed restrictions.
The Galveston Association of Rental Managers (GARM) is an established organization made up of seven property management companies which are dedicated to good-neighbor policies. GARM carefully monitors renter activities via carefully crafted, universal registrations, on-site check-in procedures, and year-round, off-duty police officers who patrol our area and monitor renters’ activities 24 hours per day. GARM companies manage several vacation homes in our subdivision. When there is a problem, we have one number to call for assistance, 24/7.
In addition, several homes are managed individually by their owners—Rent-By-Owners. Report directly to these homeowners, your neighbors, if you feel their renters are breaking subdivision rules or are out of bounds. Most people are reasonable and we are all dedicated to maintaining a peaceful neighborhood.
There are ten summer weeks and a couple of festival weekends a year when rentals are at a peak. During the other 42 weeks there are approximately ten families in residence in our area. To change the deed restrictions for those ten weeks and those ten families seems extreme. In reality, we are a community of absentee owners.
Are you certain of the legality of the proposed deed changes?
These changes propose grandfathering current owners. Will you be ready to defend yourself in a lawsuit if you fail to disclose to a new owner that their deed restrictions are different than those of their neighbors and different than what you enjoyed?
A change in restrictions that does not restrict everyone equally will be confusing and risky. If the new deed restrictions do not comply with fair housing rules, would individual homeowners be liable? What if one section decided to change and another section didn’t? Does that help the marketability of the neighborhood to have a plethora of different deed restrictions?
Most important, who is going to police this restriction and how? Will our property owners association be responsible? Will we have to increase our dues to make it work?
Let the market determine the rules. Why put your fate in the hands of someone else?
Our current deed restrictions are moderate, just enough to ensure the beauty of our community. The initial platting with the wide concrete streets, the curving roads, the separation from the highway and the set back requirements are the real reasons for the success of the subdivision, not the deed restrictions.
Many neighbors go far above and beyond deed restrictions with beautiful landscaping, clean wetland areas, stunning architecture, and year-round property maintenance. Our beautiful entrances and cul de sac landscaping are mainly the result of homeowner donations. Cooperation among neighbors has been key to the success of our neighborhood.
We will always be friends.
Thank you for your consideration of these points. Many of us in the neighborhood are against the change in the deed restrictions. We want to remain anonymous as we care more than anything about the sanctity of the subdivision as a collegial environment. No other neighborhood in the area has what we have—our monthly parties, our Christmas celebration, and the July fourth festival. Let’s all decide this issue privately, vote anonymously, and stay friends.
GARM celebrated its twelfth anniversary this year and now has eight members companies. Over the years, we have become a known entity at City Hall and the go-to organization when any questions come up about vacation rentals. Over the past two years, we participated in the formulation of a city-wide short-term rental ordinance along with representatives of the Rent-By-Owner community.
Our ordinance requires that:
- All vacation rentals register with the city.
- All vacation rentals pay lodging tax.
- All registrations list a 24/7 contact who will respond to problems at the property.
We remain proponents of the “good neighbor policy” and strongly believe that our work—started over 12 years ago—has contributed to our community having (mostly!) positive attitudes toward vacation rentals.
What was the outcome of the neighborhood debate discussed in the letter? The homeowners voted overwhelmingly to maintain the original deed restrictions and allow short-term rentals.