Background
Plaintiffs, property owners in New Braunfels, Texas, challenged the City’s zoning ordinance that prohibits short-term rentals in residential districts. The Plaintiffs purchased their properties after the ordinance was enacted and were denied zoning changes to allow short-term rentals. They sued alleging violations of the Due Process and Equal Protection Clauses of the United States and Texas Constitutions. The district court granted summary judgment for the City, and the Plaintiffs appealed.
The court’s reasoning
The court first addressed the Due Process claim, determining that the Plaintiffs failed to allege a constitutionally protected property interest under Texas law. While Texas courts have recognized vested rights in certain contexts, they have not found a vested right to lease a home on a short-term basis. The court noted that the right to lease is a core incident of property ownership, but the specific use of short-term leasing carries no common-law categorical vested-right protection. Regarding the Equal Protection claim, the court applied rational-basis review. The court found that the City’s goal of preserving the residential character of neighborhoods is a legitimate government interest. The ordinance’s distinction between rentals of twenty-nine days and thirty days, as well as the zoning of specific districts, represented reasonable legislative line-drawing. The court concluded that the ordinance was not arbitrary or unreasonable and that the City’s legislative choices were based on rational speculation.
Texas courts, however, have held that it does not.
Marfil v. City of New Braunfels, 25-50025 (5th Cir. 2026)
What it means going forward
The ruling confirms that property owners in New Braunfels cannot claim a constitutional right to short-term rentals in residential zones and that similar zoning ordinances in Texas are likely to withstand constitutional challenges under rational-basis review.