Opposition to short-term rentals has spread to East Waco, where a neighborhood association is raising fears that tourism could crowd out housing for lower-income residents.

After East Waco residents spoke out against a special permit application for a short-term rental on Spring Street during a public hearing earlier this month, the Waco City Council delayed its vote on the permit until this coming Tuesday. The vote also was delayed in part because District 1 Councilwoman Andrea Barefield was not present. East Waco residents blocked a permit for a short-term rental on Nathaniel McCoy Street during a Sept. 3 council meeting.

Like residents in Castle Heights, who have successfully fended off short-term rentals in their upscale neighborhood since the city passed permitting rules in 2017, East Waco opponents argue vacation rentals could bring in unruly guests and erode neighborhood character.

East Waco opponents are also raising a different concern, which has been raised in larger cities across the country: that renting houses for out-of-town guests can displace affordable housing.

“We need affordable housing, subsidized housing, workforce housing, and we don’t want to get displaced,” North East Riverside Neighborhood Association President Jeanette Bell said. “Landlords might start renting their homes out to vacationers.”

East Waco’s stock of decent, affordable housing is already tight, and renting that housing to tourists would make it worse, Bell said.

“We’re a low-income, minority community,” Bell said. “It doesn’t address any of our challenges. It has no social impact at all. We’ve got to think about the whole community. We feel like we’ve been put on the back burner again.”

According to the “Waco Downtown Market Study” completed on behalf of the city last year, 70 of the Elm Avenue area’s housing units, or 20% of the total, were vacant.

Bell said she is in favor of the three hotels under construction in East Waco because of the employment they will provide, but said turning homes into vacation rentals does not have the same benefit.

“It just wouldn’t fit into this neighborhood,” Bell said. “We already have enough challenges.”

Barefield, who represents the area on the city council, said she does not share the neighborhood association’s hard-line stance against short-term rentals, but she does understand members’ concerns.

“When I’m talking about District 1, I’m not wholly, hard-and-fast against short-term rentals,” Barefield said. “What I’d prefer right now is that we stabilize our neighborhoods a little bit more before we introduce more transient living.”

She said East Waco’s proximity to tourist destinations and the Brazos River could make the area a hotbed for short-term rentals.

She said she would like to see more residential development in the area to attract people who are already moving to Waco, particularly young professionals who are likely to work in downtown.

“I’m really excited about the direction housing is going in,” Barefield said. “I’m really excited about some of the ideas that are manifesting and growing. They’re doing things to make our community what it needs to be to sustain growth.”

The handful of active short-term rentals in East Waco tend to be in areas where zoning does not require a public hearing process for a permit.

The 2017 ordinance requires special zoning permits for short-term rentals in certain residential zoning districts, meaning the city Plan Commission and Waco City Council have to hold public hearings and vote on each case.

If 20% of neighbors within 200 feet of the applicant oppose the special permit application, a ¾ majority is required for council approval.

A city-appointed committee had proposed an ordinance that would have allowed short-term rentals in all residential areas by an administrative permit, meaning no hearing or vote required, for applicants wanting to rent to space guests while permanent residents also stay on-site. But the council chose to require even those applicants to go through the public hearing process if they are in the more restrictive R-1 residential districts.

Nancy Grayson, owner of Lula Jane’s bakery on Elm Avenue, recently opened a short-term rental a few blocks away on Peach Street, where the zoning is R-2 and does not require a special permit. The century-old cottage is across the street from the giant Tejas Logistics warehouses.

Grayson, who founded Rapoport Academy in East Waco, said she understands the desire to protect the neighborhood from unchecked commercialization, but she thinks short-term rentals could be beneficial for the neighborhood if properly executed.

“I think you have to be deliberate and I think you have to be careful,” Grayson said. “I think if an owner can make a case for it that shows the significance to the neighborhood of that activity, I think that’s a good thing.”

Grayson said she had not initially set out to open a short-term rental. The previous owner of the home, Lo Ernest Taylor, asked her to buy and restore the home.

“It’s a little bit different. We were here to save the house,” Grayson said.

She said she secured a historical designation for the property, created a book detailing the history of the home that guests can read, and emphasizes the importance of that local history to guests.

“I’m a real believer in East Waco, and I would like other people to know how rich it is to be among the people here and the homes here, because many of them are historic,” Grayson said.

Grayson said she understands the argument that available homes should not be taken up by short-term rentals, but most of the rentals people are trying to get off the ground do not fit that category.

“I think for some, that may be more short-sighted in not being more deliberate in looking at which potential Airbnb has value to the community and which does not,” Grayson said. “It’s a subjective measure, but I think it bears looking at from a neighborhood standpoint.”

The Waco City Council will reconsider and hold a public hearing on the Spring Street short-term rental permit during its business meeting, starting at 6 p.m. Tuesday in the Bosque Theater at the Waco Convention Center, 100 Washington Ave.

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