Newlyweds Ryan and Pam Hess bought their first condo in , an affluent Austin neighborhood, in March of this year. They immediately looked into listing their home on the popular home sharing website, Airbnb.

Ryan owns Ready to Run, a running store in West Austin, and Pam, a coordinator for the online interior design platform, Homepolish, has a side business as a dog walker and house sitter. Listing their condo on Airbnb seemed like an easy and logical way to supplement their income.

Pam, 26, who described the couple as “rule followers,” received multiple inquiries within the first few days of listing their property. But before Pam could accept any requests, she was directed to a page on Airbnb that listed the various laws and taxes imposed by the city of Austin on homeowners wanting to rent out their properties. It was there that she first came across the term Short-Term Rental License, otherwise known as an STR License.

“So I realized that we had some homework to do,” Pam said. “We even reached out to some of our friends to see if people are actually policing this law. I reached out to the city of Austin. I even went to the city to see what requirements they had. They said, oh well we require a Short Term Rental License,”

Austin has developed a reputation as a fast growing, tech friendly city. With budding young start-ups and venture capital pouring into the city, the sharing economy should be flourishing. However, two home sharing platforms, Airbnb and Homeaway, which is headquartered here in Austin, would disagree. Home sharing is one of the most successful and accessible sects of the sharing economy but many Austinites are finding it increasingly difficult to list their homes legally. Since 2012 the City Council has passed a series of regulations requiring any citizen who want to own and operate Short Term Rentals, or STRs, to acquire a license. A process that has been further complicated by a recent City Council vote tightening regulations and outlawing some STRs altogether.

Pam’s condo is a part of a multifamily unit, which at the time meant she needed a type 3 STR. There are two other types of STRs. Type 1 is for owner occupied single family properties that are listed as primary residences and Type 2, which have faced the most scrutiny from homeowners’ associations and lawmakers, are for single family dwellings or duplexes that are not owner occupied.

The process of acquiring an STR varies from case to case. First, you need to a certificate of occupancy. If your property doesn’t already have one, then you need a Short Term Rental Inspection by a third party inspector which costs between $200-$250. Then you need to fill out an application and pay the application fee, which after the recent vote, was increased from $235 to $393. There is also a 3% cap for Type 2 STLs per census tract, which means there are only a limited number of licenses available per neighborhood.

Pam and Ryan’s condo did not have a certificate of occupancy on file so they went back to the city hoping that the thorough $300 inspection they were required to have before purchasing their condo would suffice. They were told it would not and that they needed to pay a third party STR inspector. After some research they hired someone to come to their place for $250. The condo that had passed an inspection two months prior, when they were buying it, failed to pass the third party STR inspection.

“We had to get an inspection to buy it. We had to get an inspection to get homeowners insurance, all these things and it’s passed all the codes for that. So if it’s doable to live in and have it and everything is up to code it shouldn’t be any more strenuous” to pass the STR inspection, Ryan Said.

Ben Cross, 36 who works as an analyst for the state, has a Type 1 STR License to rent out a detached garage apartment on his property. For him the entire process took about 4 weeks.

“Before we bought it, this house had been remodeled in 2006. So it had a certificate of occupancy and I know that is something some people struggle with,” Cross said. “But that was a very simple process for me”

The difference in these two homeowners’ experiences mirrors a trend in STRs. This is because of conflicting opinions about Type 2 and Type 3 STRs.

“Phasing out Type 2, or commercial, short term rentals will increase housing opportunities for students and other Austinites who want to purchase or rent those structures,” said City Councilwoman Kathie Tovo, who proposed many of the new regulations that recently passed in the council, including the ban on Type 2 STRs with the intention of outlawing them by 2022. “And it will remove an inappropriate commercial use from our neighborhoods.”

Pete Gilcrease, 36, who manages over three STR licensed properties, has been operating short-term rentals in Austin since 2010, two years before the first short term ordinance passed establishing STR Licenses. Citing a 2012 audit and an Educational Impact Statement from 2013, he believes that Council Member Tovo’s assessment of STRs is incorrect.

“Short-term rentals are not a commercial use of property any more than long-term rentals are,” said Gilcrease, whose primary source of income comes from listing his properties on sites like Homeaway.com and Airbnb.com.

City Councilwoman Ellen Troxclair has her own concerns and voted against the new regulations.

“She voted against the new regulations because she felt that the new regulations would not address the specific issues that some of our neighbors were concerned about. There were a small group of “bad operators” who were violating the rules already in place,” said Michael Seale, Troxclair’s chief of staff.

Many share Troxclair’s concern that the new regulations don’t adequately address the problems with the current short-term rentals. Specifically, enforcing the rules that were already on the books.

“She was also concerned that passing some of the regulations would violate personal property rights which are protected under the Texas Constitution,” added Seale. “And we are looking forward to the State’s opinion on the recent lawsuit.”

The lawsuit Seale is referring is being funded by the Texas Public Policy Foundation and was filed against the city by seven short-term rental owners claiming, “that Ordinance 20160223-A.1 (the “STR Ordinance”) violates the Texas Constitution by infringing upon the rights of private property owners and tenants to operate and enjoy individual residences as short-term rental properties.”

Since Proposition 1 passed, causing Uber and Lyft to leave Austin, many have questioned whether the city is a hostile environment for tech companies that rely on user generated resources. Tovo, unsurprisingly, is not one of them.

“I don’t regard commercial short term rentals as examples of the “sharing economy,” she said. “These are investor-owned properties operated for maximum profit, often at the expense of Austin residents.”

For the Pam and Ryan Hess, the expense of not being able to participate legally in Airbnb is a frustration.

“I mean I wish I didn’t have a conscience, of course,” Pam said, “But unfortunately, I do.”