Within the city limits of Austin, the regulations regarding short term rentals are pretty strict.  They have a comprehensive permitting process and caps on the number of short term rentals allowed.  In fact, in the City of Austin, it's almost impossible to get a permit to operate a short term rental for a single family home if it's not your primary residence.

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• the City of Austin breaks down short term rentals into three types, to learn all about these classifications, check out this previous post
• no permits are being issued for STRs for single family, investor-owned homes EXCEPT in the following zoning districts: Central Business District (CBD), Downtown Mixed Use (DMU), Planned Unit Development (PUD), General-Retail - Mixed Use (GR-MU), Commercial Services - Mixed Use (CS-MU), Commercial Services - Vertical Mixed Use (CS-V), General Retail - Vertical Mixed Use (GR-V)
• STR permits are being issued for Type 3, multifamily properties i.e. condos. There are caps on the number of STRs allowed in each condo building. If the condo is located in a residentially zoned area the maximum number of units that can have a Type 3 permit is 3% of the total units in the condo building. For condos located in commercially zoned areas, the max number of STR permits is 20% of total units. 
• STR permits can be issued for single family homes where the owner has a homestead exemption on the subject property. These permits are used when you live in the home, and want to rent out the entire home from time to time, OR if you only want to rent out part of the home ie. a room or guest house on the property.
• Link to more info on COA regulations

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