Leon Valley Tightens STR Rules While Protecting Existing Permits

On August 4, the Leon Valley City Council unanimously approved Ordinance No. 2026-17, adopting several significant changes to the city's short-term rental regulations. The amendments expand the separation requirement for new STR permits, establish a square-footage-based occupancy standard, make STR permits nontransferable, and strengthen requirements related to trash originating from STR properties.

Council also took an important step for current operators: existing STRs were expressly grandfathered from the new requirements.

Separation Requirement Expands to a 300-Foot Radius

The most consequential change for future permit applicants may be the expansion of Leon Valley's STR separation requirement.

Previously, the ordinance prohibited an STR within 200 feet of another STR on the same block face. Ordinance No. 2026-17 replaces that standard with a 300-foot radius.

The distinction is substantial. The former rule limited the separation analysis to properties along the same block face. A radius captures properties in every direction, potentially including STRs on adjacent streets and around corners. As a result, considerably more properties may be excluded from eligibility for a new STR permit.

For anyone considering purchasing a Leon Valley property for STR use, confirming permit eligibility before closing is now particularly important.

Current STRs Are Grandfathered

Existing Leon Valley STR operators received an important protection during the August 4 Council meeting.

Council added an explicit provision stating that STRs currently in operation would not be affected by the newly adopted requirements. That should protect existing permitted operations from becoming noncompliant solely because they do not satisfy the new 300-foot separation requirement or other newly adopted standards.

Grandfathering, however, should not be confused with permanent STR eligibility for the property itself. The ordinance's treatment of permit transfers creates an important distinction between the rights of an existing permit holder and those of a future purchaser.

STR Permits Are Now Nontransferable

Under the amended ordinance, an STR permit does not transfer when a property changes ownership. A purchaser must apply for a new permit and qualify under the regulations in effect at that time.

The interaction between grandfathering, nontransferability and the new 300-foot radius may ultimately have a greater effect on Leon Valley's STR inventory than any of the individual provisions standing alone.

An existing STR may continue operating despite another permitted STR being located within 300 feet. If that property is subsequently sold, however, the purchaser cannot rely on the seller's grandfathered permit. A new application would be evaluated under the current ordinance, including the 300-foot separation requirement.

Consequently, a property that is legally operating as an STR today may not necessarily remain eligible for STR use following a sale.

For owners, buyers and real estate professionals, that distinction should be factored into any transaction in which existing or anticipated STR use contributes to the property's value.

New Occupancy Standard

The ordinance also establishes a maximum occupancy standard based on one occupant for every 200 gross square feet.

The practical effect will vary by property size. More importantly, operators and prospective buyers should rely on the occupancy authorized by the City rather than assuming that bedroom count, sleeping capacity or an online platform's maximum guest count determines lawful occupancy.

Additional Trash Requirement

The amended ordinance also addresses trash originating from an STR that is found beyond the property's boundaries. After proper notice, the operator has 24 hours to remove it.

For operators, this adds another compliance issue that requires a reliable local response system. It is particularly relevant because individual operational requirements do not exist in isolation when a city's enforcement framework allows repeated violations to affect permit status.

The Longer-Term Effect: Attrition Rather Than Displacement

Taken together, the amendments establish a clear distinction between existing operators and future STR activity.

Leon Valley did not apply its more restrictive standards retroactively to existing STRs. Instead, current operations are grandfathered while new permits—and new owners of existing STR properties—must satisfy the revised ordinance.

That creates the potential for gradual attrition in Leon Valley's STR inventory. As properties are sold, permits are surrendered or operations otherwise cease, grandfathered STRs may not necessarily be replaced. Any subsequent applicant must satisfy the 300-foot radius and the other requirements then in effect.

In that respect, the ordinance can reduce STR density over time without requiring currently permitted operators to cease operations.

What Leon Valley STR Owners Should Watch

Current operators should protect the continuity of their permits and understand precisely what circumstances could result in the loss of grandfathered status. A lapse, surrender, revocation or change in ownership may have consequences that did not exist under the previous regulatory framework.

Prospective purchasers should conduct STR permit due diligence independently of the property's current use. The fact that a home is operating legally as an STR at the time of sale does not establish that a purchaser will qualify for a new permit.

The City has published Ordinance No. 2026-17 on its Uncodified Ordinances page. The online Code of Ordinances has not yet been updated to incorporate the amendments.

Leon Valley Uncodified Ordinances