Dan King
Dan King · December 22, 2022

ARLINGTON, Va.—Yesterday, the Institute for Justice (IJ) submitted an amicus brief arguing that homeowners challenging short-term rental regulations in New Braunfels, Texas, deserve their day in court. A lower court threw out the constitutional challenge brought by the homeowners after accepting the government’s reasons for the city’s ban on short-term rentals, without giving the homeowners challenging the law an opportunity to rebut those reasons. The city said its ban on short-term rentals is constitutional, and the court just took the city’s word for it.  

“Evidence matters in constitutional cases that seek to vindicate economic liberty and property rights,” said Arif Panju, Managing Attorney of IJ’s Texas office. “If these homeowners have evidence showing that the city’s reasons for banning short-term rentals just don’t make sense, the homeowners get the opportunity to prove their case.” 

New Braunfels bars homeowners, like the plaintiff Rafael Marfil, from renting their homes out for less than 30 days if the home is in a “residential district.” The short-term rental regulations in New Braunfels went into place in 2011. Anyone who was running a short-term rental before that date was grandfathered in, but anyone interested in doing so after that was denied.  

Several homeowners, including Marfil, filed a lawsuit arguing the city violated both the Texas and U.S. Constitutions by allowing some homeowners to run short-term rentals while blocking others from doing the same. Unfortunately, the lower court dismissed the case without allowing the homeowners to prove their claims. In the judge’s view, the government need only conceive of a rationale for its regulations to prevail, regardless of whether the facts of the case undermine the government’s reasons. 

“Courts should not simply take what the government says at face value,” said IJ Litigation Fellow Betsy Sanz. “If the facts of a constitutional case dispute the government’s rationale for imposing a regulation, those facts should be taken into account.”  

Now, the homeowners are appealing the lower court’s ruling to the 5th U.S. Circuit Court of Appeals.    

IJ’s brief in support of the appeal seeks to build off its victory in a case called Saint Joseph Abbey v. Castille. That landmark case held that Louisiana’s law—which prevented anyone except for state-licensed funeral directors from selling caskets—was unconstitutional. Furthermore, it helped establish that plaintiffs can use evidence to counter a rationale provided by the government and that the government’s rationale cannot be a hypothetical fantasy.