Texas Supreme Court Takes Up Dallas Short-Term Rental Ban

The Supreme Court of Texas has agreed to decide whether Dallas can enforce its ban on short-term rentals in single-family neighborhoods, a fight over whether Texans have a protected right to lease their own homes.

The court granted the City of Dallas’s petition for review on October 23 and set oral argument for 9 a.m. on December 3, according to its orders list. The case is City of Dallas v. Dallas Short-Term Rental Alliance.

What Dallas passed

In 2023 the Dallas City Council passed two ordinances. Ordinance 32482 banned short-term rentals in areas zoned for single-family residential use, and ordinance 32473 “regulated the remaining short-term rentals,” the Fifth District Court of Appeals wrote. The registration rules set fees, occupancy caps, limits on rental days and parking requirements.

A group of short-term rental owners sued, and a Dallas County district judge blocked enforcement with a temporary injunction in December 2023.

What the appeals court held

The Fifth District Court of Appeals in Dallas largely upheld that injunction in a memorandum opinion on rehearing issued July 18, 2025. It ruled under the due course of law clause of the Texas Constitution, Article I, Section 19.

Citing an earlier case from Grapevine, the court said the owners have “a vested right to lease their properties and this right is sufficient to support a viable due-course-of law claim.” Four of the owners “proved their probable right to relief against the City’s zoning ordinance,” the court wrote.

On the registration rules, the court said the city failed to “point us to evidence showing its legitimate governmental interests associated with restricting maximum occupancy in short-term rentals.” The court reversed the injunction for one plaintiff, a cleaning-services operator who did not show a vested interest.

What the Supreme Court will hear

Dallas argues that owners have no vested right to run short-term rentals. In its brief, it cites a 2026 Fort Worth appeals court ruling that it quotes as holding that owners “do not have a vested common-law right” to that use. The city also challenges the 2023 Texas Regulatory Consistency Act, which limits city regulation in areas the state already covers, and argues the law is unconstitutional. The owners argue the ordinances are preempted by that act.

Groups filing friend-of-the-court briefs include the Texas Public Policy Foundation and the Goldwater Institute, along with the Neighborhood Coalition of Dallas and the City of Dickinson.

The high court has not decided a short-term rental ordinance case on the merits. In 2023 it declined to review the Grapevine case, City of Grapevine v. Muns, and Justice Evan Young wrote separately that the question was of “increasing and demonstrable importance,” the city notes in its brief.