## In the Court of Appeals Second App ellate D i strict of Texas at Fort Worth

___ ________________________ No. 02

- 19

- 00257

- CV

___________________________

On Appeal from the 348th District Court Tarrant County, Texas Trial Court N o. 348

- 3 03736

- 18

Before Sudderth, C .J. , an d Kerr, J. 1 Opinion by Justi ce Kerr

1 Justice Lee Gabriel was a membe r of the original panel but has s ince retire d. Because they agree on the judgment, the two re maini ng justices decided the case. See Te x. R. A pp. P. 41. 1(b). 

### C ITY OF 

### G RAPEVINE 

### , Appellant

V



### . L UD MILLA 

### B. M UNS 

### , R ICHARD 

### M UELLER 

### , K ARI 

### P ERKINS 

### , K EVIN 

### P ERKINS 

### , P AME LA 

### H OLT 

### , AND 

### A

- 1 C OMMERCIAL AND 

### R ESIDEN TIAL 

### S ER V ICES 

### , I NC



### . , Appellees2 OPINION This appeal arises f rom a challenge to the City of Grapevine ’ s munic ipal
ordinance banning short

- term rent al s (STRs)

. 2 Ludm illa B. Muns , R ichard Mueller,
Kari and Kev i n Perkins, Pamela H o l t, and A

- 1 Commer cial a nd R esidential Service s , Inc. (colle c tively, “ t he Homeowners ”) ow n r esidential properties in Gr ap evine that they lease to others on a short

- term basis. In S eptember 2018 , the City of Grapevine passed an o rdinance expressly prohibiting STR s in the C ity (the “ STR Or dinance ” )

. As a result, t he Homeowners sue d the City , req ue sting decl ara tions that the STR
Ordinance vi olates the ir substa ntive

- due

- course

- of

- law r ights , is preempted, and is

un constit utionally retroactive. The Homeowners also asserted a re gulatory

- takings
claim a nd sought injunctive relief

. T he Ci ty moved for s ummary judgment and file d a plea to the jur isdiction arguing t hat the trial cour t l acks subj ect

- matter juri sdiction ove r thi s case because (1) the Homeowners fa iled to exhaust th eir adminis tr ative remedies ; (2) t he
Homeowners are seekin g a n a d visory o pinio n on the STR Ordinance because they have not challenged the Ci ty ’ s existing zoni ng ord i nanc e under which ST Rs are not a
perm itted use in the first place ; (3) the Homeowners ’ regulato ry

- taki ng s claim is
inval id; and (4) govern mental immu nity b ar s the Homeow ners ’ claims for de claratory and injunctive relief

. The trial c ourt disagre ed and den ie d the C ity ’ s motion a nd plea.

2 An STR is a home l ease fo r few er t han 30 days

.3 The City has filed this i nterlocutory ap pe al , 3 contending in five i s su es that the trial

cou rt lacked juris diction and thus er red by denying the City ’ s jurisdiction al ple a. 4 We
wil l reve rse and re nder in part and affi rm in part.
I. Backgro und
In 1982, the City ado pted a com prehensi ve zoning ordinance ( the “ Zoning
Ordinanc e ” ) th a t prohibits the use of a bu i lding within the City ’ s limits for a n y purpose except those us es that th e ordinance specifical ly authorize s : “ n o use of any
build ing, st ructure [,] or lan d

. . . shall herea ft er be established, altered, moved,
di vided [,] o r maintained, in any manner except as authorized by the provision s of th i s ordi na nce .” See Grapevine , Tex. , Code of Ordinances, a pp. D , § § 1, 6 .C

. ( 2020 ) (emphas e s adde d). The Zoning Ordinance defin e s “us e” as “the purpose or activity
for which a piece of land or its bui ldings is designed, arranged, or int ended, or for
which i t is occupie d or m a intained.” Id. § 12.A

. 426.
In the two zoni ng districts in which the Ho meowners ’ properties are located,
the Z oning Ordinance authorize s “single

- family det a ched dwellings” as a pr inc ipal permitted use. Id. §§ 15.A.1, 16

. A.2. A “ s i n gle

- fami ly detach ed dwelling” is “an

en closed building hav in g accommodations for an d occ upied by only one fam ily,

3 See Tex. Civ. Pra c . & Rem

. Code A nn. § 5 1. 014(a) (8) (pr ov i di ng for i nter lo cuto r y appeal from the grant o r den i al of a p l ea to th e jur isd ictio n filed by a gover nme ntal un i t).

4 In addition to the parties ’ b riefs, we have re ceived an a mic us brief supporting the Hom eowners fro m the Texas As soc iation of R ealtors. S ee Tex. R. A p p. P. 11.4 which build in g must of itself meet all the lot a rea, fr ont yard, side yard, rear yard , height[,] and other zoning requirements. ” Id

. § 12.A.3 9 4

. A “ f a mily” is “ any number
of individ uals living together as a single house ke eping uni t interd ependent upon one another.” 5 Id

. § 12.A.140. In 2000, th e City amended the Z oning Ordinanc e to all ow bed and breakfasts
in c ertai n areas of Grapevi ne. 6 See Grap e vine , T ex., Ordina nce 2000

- 4 7 (Apr. 18, 2000)

. Th is amend men t d e f i n e d “ bed and breakfast facility” as “an accessor y use to a single

- famil y dwelli ng unit in which n o more tha n twelve ( 12 ) rooms in the principal
residential structure a re set as i de for gu e st cl i ents ; . . . [the] length of stay of guest clients range s from one (1) to thirty ( 30 ) days; and the owner/operator of t he prin cipal st ru cture resides on

- site

. ” Id. sec . 2.A

. (codified at Grapevine, Tex., Cod e of
Ordin ances, app . D , § 12.A.2 9a)

. The am en d m ent ex cluded from “ [ b ] ed and
bre akfast home stay [s]

. . . uses s uch as mo tels, hotels, community residential home s, boarding or l od g ing houses, apartment dwellings, guest cotta g es or single

- family dwelling transient rental. ” Id. Th e amendment did not defi ne “ s ing le

- fa mily dwel ling
transie nt rental

. ” See id. The City c o ntends that be c ause th e Zoning Ord inance do es not ex pres sly allow
S TRs , they have ne ver been a per mitted use in t he City

. But for se veral years before

5 T he Zo n i ng Ordinance do es not def in e “ si n gl e ho u seke eping unit

. ”

6 None of the Homeowners ’ properties a re in those areas.5 the STR Ordinance ’ s 2018 pa ssage , t h e Ho meowners had r ented out th eir Gr apevine
proper tie s on a s hor t

- term ba s is witho u t interference from the City. I n fact, when

so me of the Homeowners contacted t h e City ’ s Pla nning and Zo n in g Depart ment to ask about any rest rictions on S TR s, Cit y e mployees told t hem th at the City had no

rest rictions, regu lat ions, or perm i t requirem ents for STRs. Based on thes e

r eprese ntations and the e x isting Z oning Ordinance , t he Homeowners invested money
to p u rchase or to i mpr ove G r ap e vin e homes for use as furn is h ed STRs

. 7 Som e of the
Homeowners p a i d short

- term

- occupanc y ta xes to the City , wit h out incident and with the City appar ently happy to accept them

. 8
More r ecently, how ever , Grapevine ’ s STR market ha s exp l o ded because
web si te s li ke Ai rbn b , Hom eaway, a n d Vrbo have ma de it easier f o r property owners

to ma rket th e ir STR s to pr ospective ren ters
. For some p ermanent residen ts who liv e

near STR s , this u ptick has created prob le m s such as no ise d isturb ance s , incr eased
veh i cle tra f f ic , and str ee t

- park ing probl ems . For t he City ’ s pol ice dep a rtment , ST Rs have g enerated in crea sed compl ain t s from residen t s involvin g STR g uests : criminal
mi schie f, domesti c dis put e s , park ing violati ons, a lar m calls, a nd noi se di st urbances

.

7 According to the Hom e owners, n o ne of the m ren t out in div i dual ro oms, h av e employe es sta ffin g the i r p rope rt ie s , mai n tain a front d es k or c on c ierge s e rvice, o r o therwise ope ra te a busine s s o n thei r STR p rop er ties.

8 Homeowner Holt, for example , has paid roughly $32,000 in such taxes to t he City , which th e City has kept.6 But the City has never issued a citation for short

- ter m renting in vi o latio n of th e Zo ning Ordinance

. 9
B ecaus e of the inc rease in STR s and the assoc iated complain t s , the Grapevine City Council be ga n a ten

- mo n th st u d y an d observation period in November 2017

concern i ng how STRs affect res id e n t ia l neighborhoods

. In e arly Se ptemb er 2018, th e city co uncil hel d a public h earin g on the ST R is sue. At the be gin ning of the hearing ,
t he City ’ s A ssi stant Attorn ey , Matthew Boyle, stated that

— despite what t h e Homeowners had been l ed to believe

— the Zoning Ordinance h ad al wa ys prohi b i te d
ST Rs : A nd at th e out set as to wh ere we are now, I want to m ake it cl ear that the short

- term rent als are no t [a] permitted u se in the [C] ity of Grap evine and th ey h ave never b e en listed as a permit te d use under the zo ning ord inance and a s such the y ar e c u r re ntly a nd have been sin ce at le ast 2000 p rohibited in the [ C ] i ty o f [G]rapev ine. A fter h earin g c itizen s ’ comments, the city coun cil passed th e ST R Or din a nce , which (1) d efines a “ single

- family d we lling tran sient renta l ” as “ [t ]he rental or o f fe r for renta l

o f an y dwelling or any porti on of a d well ing for a period of less tha n 30 day s ” 10 and (2 ) expr essly pr ohibits them in the C i ty
. Gr apevine, T ex., Ordinance No. 2018

- 065

9 C

f. Zaat ari v. Cit y of Austi n , 6 1 5 S.W.3d 172, 189 (Tex . A pp.

— Aus tin 2019, pet. denied ) ( not ing t ha t “ the City has not initiated a single proceeding to remove a proper ty owner ’ s short

- term rental licens e in response to c omplaints about parties ” ).

10 S ingle

- fa mily dw el li ng tra ns ient ren tals do not in clud e traditi o na l re sid ential le a seback arran gemen t s as socia ted with some rea l

- esta te tra ns action s . See Grap evine , Tex., Co de of Or dinan ces , ch. 1 4 , ar t. V I, § 14

- 15 0.7 (S ept. 4, 2018 ) ( codified at G rap ev ine, Tex., C o d e of Or dinances , ch. 1 4 , ar t. VI, § § 1 4

- 15 0 , - 1 51 )

. Accordin g to t he C ity, the STR Or dinan ce did not really amend the Zoning Or d inan ce but si m ply c larified and aff ir med that the Z o ning Ordinanc e d id
not allow ST R s . Immediate ly af ter th e STR Ordinance ’ s enact ment, S cot t W i lliams, the C ity ’ s
Bu ilding O fficial a nd Dire c tor o f De velopm ent Se r vice s , p r epared and ma iled
ident ical n otic e l etters to al l Grapevi ne ’ s kno wn S TR ow ners a nd o p er ators
. T h e

no tice

— w hich each of the H omeowners re ce ived

— st ate d , Be advise d t hat shor t term/transient rentals ( “ ST R ’ s ” ) ar e pr ohibited in the City o f Gr apevine. STR ’ s are not listed as a permit t ed
use in any Zoning cl assification in the City, an d as such, are not allowed

. . . . Fol lowing the [ September 20 18] P ublic Hearing, the Cit y C ouncil approved [the STR O rdinance ] that a ffirmed the p rohibit ion on STR ’ s in Gra pevine. Single family dwe lling t r ansient renta ls (aka ST R ’ s ) are def ined a s “ the ren tal or offer for rental of any dwelling or a ny po rtion of a d welling for a period of les s than 30 days

. [ ” ] The c omplete Ordin ance is attached. The notice inform ed S T R owners that they wo u ld be allowed a 4 5

- day cond it ional grace perio d t o a llow them a “ reaso nable time t o ho n or commitmen t s that have already been made, and/o r t o mark et their ho me (s) for other, permitte d uses. ” The

n otice w arned t hat a f ter the grace period e xpire d , “ a ny perso n fo un d to be in vi ol ation
of the Zo ni ng Ordinance regarding S TR ’ s [w ould] be iss ue d a citatio n , and upon

c onviction thereof [would ] be f ined in a s u m not to e xceed $2,000.00. ” T he n otice
further wa rn ed that ordinance violations durin g the con d itional grac e period would8 “ result in an order to imm ediately cease the STR ” and w ould “ result in pr osecution as
described above. ”
In October 2018, the Homeowners sue d th e City , s e eking d ec lar a tions t hat th e STR O r dinance is un constitut ional b ec a u s e i t (1) i s a regula tory taking of their
p roperty without compe nsation ; 11 (2) vio l ate s t heir due

- co urse

- of

- law ri ghts under the
Te xas Co nstitution ; 12 (3) is impliedly pre e m pted b y Ch apter 156 of the Texa s T a x Code al one or i n com bination wit h Chapter 92 of th e T e x as Prope rt y Code ; 13 and (4) de prives the Homeowners of the ir vested rights to c on ti nue th eir STRs , in
violati on of Cha pter 245 of t h e T e x as Local Government Code

. 14 T h e Homeowners
also sou g ht to e njoin the City from en forcing the ST R Or di n a n ce . T he trial court granted the Home owners ’ request f or temporary injunct ive

r elief

. 15 The C i ty filed a plea to the j uris diction and brief in support with attached
evidence cha l le ngi n g the Home owners ’ plea dings and t he exi ste nce o f j uris d i cti on al facts, argu ing th at

11 See U .S. Const . am end

. V ; T ex. C on st. art. I , § 17 (a)

.

12 See Tex. Co ns t. a rt. I, § 19

.
13 See i d. a rt. XI, § 5 (a ) ; Tex. Pr op. Code Ann. § § 92

. 0 01

– .355 ( “ R es idential Tenan cies ” ) ; Tex. Ta x Co de Ann. § § 156.0 01

– .252 ( “ Hotel Occ upan cy Tax ” )

.
14 See Tex

. Loc

. G o v ’ t Code An n. § § 245 .0 01

– .007 ( “ Issua n ce o f Loca l P ermits ” )

.
15 Th e Home owners s tate in their brie f that th e tria l c ourt grante d them temp orary injun ctive relief , alth ou g h t he tri al co urt ’ s o rder is not in the record

.9 • t he Homeowners ha d f ailed to allege a ju s ticiable cont rover sy because t h e STR
O rdina nc e was not a “ n ew ban ” on STRs

— that is, the unchall enged ex isting
Z o ning Or dinan ce al r eady ba n ned STRs

— a nd thus a rul i ng on the S TR
Ordi n ance w oul d no t change anything ;

• the Homeowners had failed to ex haust their adminis t r a t iv e remedies unde r C hapter 2 11 o f the Texas Local Gove r n me nt Code because they did not appe al to the City ’ s Board of Ad justment th e City ’ s determin ation in the no tice th a t

t he Z on in g O rd inance already prohi bited STRs ;

• gov ern ment al immunity b ar s the Homeown ers ’ claims , and G rap evi ne ’ s
g over nmental i m munity h ad not been w a i v ed ; and

• the Homeowners ’ request for declar atory rel ief was i n valid b eca use it mirrore d
thei r t akings c lai m . The trial court de nied the C i ty ’ s ple a , and the City did not appe al

. The H omeowners am ende d their petition to seek addit ion al declaratory relief

— that the ST R Ordinance is u nco n stitutio nally re t roa cti ve 16

— and to add a r e gulatory

ta k ing s c la im f or compe nsation or for a specific recou pment period

. 17 In r esponse , th e Ci ty m oved f or su mmary j udg ment , arg uing in rele vant part tha t the Homeowners ’
suit sh ould be dismi ssed fo r lack of subject

- matter j ur isdiction becau s e the

16 See Te x. Con st. art. I, § 1 6.

17 Se e U .S. Const . amend

. V ; T ex. C on st. art. I , § 17 (a)

.10 Home o wners ’ “ cau ses of act ion amoun t to nothing more th a n a request for an

a dvisory opi ni on ” and becaus e the y fail ed to exh aust their ad mi nis t rative remedies.
The City further argued that the Ho meowners ’ takings claim fa iled as a matter o f law
and t h at their re qu e st s fo r decl aratory r elief we re inva lid because t he STR Ordinance

w as not retroactive in that it did not ta ke away or i mp air the Homeowners ’ ve st ed rights and because t he Homeowners failed to ci te a stat e law that clea rl y pree mpted
the ST R O rdi nanc e . Co ntem p orane o usly with fi l ing its s ummary

- judgmen t m otion , t he City file d a n amended ju ris d i c t ion al ple a th at re urged t h e grounds from its or iginal plea. The pl ea al so incorp orated i t s summary

- jud gment motio n. T h e day b e for e the h earing on the amen de d jur isdictional plea and the

s u mmar y
- ju dgment m o ti o n, the Homeowner s nonsuited t h eir regulatory

- taking s a nd Chapter 245 re quests for decl aratory r elief. A fter a hearing , t h e trial cou rt denied t he
C ity ’ s amend ed ju r is di cti ona l plea and its summa ry

- ju dgment motion. The City h as app e ale d , cl aimi n g that the t rial court erre d by deny ing its

amen ded ju ris dictional plea. 18

18 T h e H omeo wners d o n ot sugg e st that the City ’ s earl i e r jurisdicti on al plea limits our jur isdic ti o n t o re view ju ri sdi c ti onal ch allenge s ra ised in t he City ’ s amen ded ple a tha t r e urge or overlap with those raise d i n the C ity ’ s origin a l p lea. See City of Ho uston v. Esta te of J o n e s , 388 S.W

. 3d 66 3, 666

– 67 ( Tex. 2012 ) (holding that an appel la te co urt doe s n ot have int er l ocuto r y juris diction over a n amend e d plea to th e jur isdiction that was substantiv el y a mo ti on to re c onsider th e o riginal plea because the
amen ded plea did not ass e r t a new imm u nity gr o und )

. B e cau s e t he Homeowners ame nde d their petition to add ad d itional c l aims a fter th e trial court denied th e City ’ s11 II. Governmental Im munity a nd Stand a r d o f Review
Unless the s tate consents to su i t , so vereign im m unity deprives a tr i al court of jurisd iction over lawsuits against the St at e or cert a in g overnmen tal u nits. Tex. Dep ’ t of
Parks & Wildlife v . Mi randa , 133 S.W.3d 217, 224 (Tex. 20 04) (op . on r eh ’ g)

. Cities are political subdivision s of the S tate and, abse nt waiver, ar e similarly e n title d to
governmen tal immunity

. Reata Co nstr. Co r p. v. Ci t y of Dalla s , 197 S.W.3d 3 71 , 374 (Te x. 2006) (op. on reh ’ g).
A plea to the juris dictio n is a di la tory plea t ha t seeks dismi ssal of a case for lack
of subj e c t

- matter jurisdiction. Har ri

s Cty. v. Sy ke s , 136 S.W.3d 635, 638 (Tex. 2 004). A ju risdicti o na l plea may challe ng e the pl ea dings, the e xi stence of jurisdictional fac ts, or both. Ala mo Hei ghts I S

D v. Cla rk , 54 4 S.W.3 d 755, 770 (Te x. 2018). Wh ether a cour t has subject

- matter jurisdic tion is a le g a l question, and we review de n ovo a tria l court ’ s

r u ling o n a plea to the juri sd ict ion

. Miranda , 133 S.W .3d at 226, 2 28

. When a plea challeng es the plead ings, we determ in e if the plaintiff has alleged
facts t ha t a f firm atively demonstrate the trial court ’ s jur isdiction. Id. at 226. We

c onstrue th e pl ea d ings l ibera ll y in the p laintif f

’ s favor and look t o the pl ai ntiff ’ s inten t.
I

d

. If the pleadi ngs are insufficient t o esta blish jurisdiction but do not affirmativ el y

o ri ginal p le a an d beca use the amende d p lea rel ie d on ad diti onal e vi de nce , w e conc lude that the am ended plea i s suf f ic ie n tly differ e nt fr om the orig inal one . See City o f M agno lia 4A E con. Dev. Co rp

. v . Smedle y , 5 33 S. W.3d 29 7, 301 (Tex. 2 017 ) (exp la ining th at “ [u] nder Jon es , th e t ou chsto ne of o ur analy sis [is] w he ther th e l ater pl ea to the jurisdictio n [is] a ne w a n d d ist i n c t motion o r a m er e motion t o r e c on sider ” )

.12 d e monstrate an incurable d efect i n jurisdiction , the plaintiff should be g iven the

o p portunity t o amen d. See id. a t 226

– 27

. B u t if the pl eadi ngs a ff irmative ly ne gate the existence of jurisdiction alt ogethe r , the n a juris dictional plea ma y be granted w ithou t

a llo wing a ( neces sari ly futile) chance to a mend. See id. at 22 7.
W hen a plea to th e jurisdict i on cha ll enges th e existence of juri sdicti onal fact s,

our rev iew m irro rs that of a traditional summary

- j udgment moti o n. Mission Consol. I SD

v. Garci a , 372 S.W.3d 6 29, 635 (Tex. 2012); se e Tex . R. Civ. P. 166a(c). We take as t ru e all evidence fav orable to t h e plai nt iff, and w e i ndulge every re as ona ble inference and

r esolv e any doubts in the plai ntiff ’ s favo r. M irand a , 133 S.W.3d at 228. The def en dant
carries the in i t ial bur den of establishing t hat the trial court lacks jurisdic ti on. G a rci a , 372 S. W.3d at 635

. I f th e defen dan t mee ts that burden, t he plai ntiff must then
demo nstrate that a disputed material fac t ex ists regard ing the jurisdictional is sue. Id

. If
a fact i s sue exi sts, the trial court shoul d deny the plea. Id

. But if t he evid e nce is
undis puted or th e p lain ti ff fa ils t o r aise a fact que st ion on the jurisd ictio nal i ssue, the plea must be g ranted as a matt er of law. See id. Overarching all these principles is t h at “ the plea should be decided without delving in to th e merits o f the case. ” Bland ISD v. Blu e , 34 S.W .3d 547, 554 (Tex. 2000).
III. F ailur e to Ex haust A dmin istrative R e medies
In its first iss ue, th e Cit y argues that the trial court err ed b y not dismissing the
Homeowners ’ claims altogether b ecause th e y fai led t o exhaust t hei r adm inistr ative

rem ed i es b y no t appealing Boyle ’ s an d Wi lliams ’ s de cisions that t he existing Zo ning13 O r d inanc e already pro hib ited STR s . T he City conten ds that Ch a pter 211 of the Texas
Lo ca l G ov e rn ment Code and the Z o ning O r d inan ce re qu ir e d the Hom eowne rs to appeal thes e dec isio n s to the City ’ s Board of Adjus t ment be for e sui ng the City

. According to the City, because the Homeown ers di d not do so and thus failed to

e xhaust their administrative remedies , the trial court lacks s ub ject

- ma tte r j urisdi cti on

ov er al l th e Homeowners ’ cl a i ms. A. A pplic able Law

Th e Local G ov ernment Code authorizes a municipality to p rom ulgate z on in g regulations and to esta blish a b oard of a djustment with th e p ower to “ hea r and de ci de

an appeal th at allege s er ror in an or d er , r equ ire me n t, decision , or d e te rm i nat i o n m ade
b y an a dmini strative offi cia l in the enforcement of [zoning or dina nce s ]. ” Tex

. Loc.
Gov ’ t Code A nn. § 211. 009 (a)(1 ) ; se e id. § § 21 1.003, .008 ; s ee also Grapev ine , Tex

. , Code of Ordinances, a pp. D , § 68. H.1. Any pe rs on aggrieved by a n administr a t ive
off icial ’ s d ecision m ay app eal to t h e board of a djus t me n t with i n a reason a bl e time a s determined by the boa rd ’ s rules

. 19 Tex. Loc. Gov ’ t Code A nn. § 211.010 (a)(1) , (b)

. C onsistent with th e L ocal G overnme nt Code, the Zoning O rdinance provide s that an

a p peal to th e City ’ s board of ad ju stm e nt may be ta ke n by “a ny pe r s on agg rieve d” by

19 The l e gisl ature am ended Local G o v er nment Co de S ec tio n 211.0 10 effective S ept ember 1, 2 0 19 , nearly a yea r a f ter Bo yle ’ s stat ements a t the S eptember 201 8
co unc i l meeting a nd Willi am s ’ s 2018 letter

. See Ac t o f Ma y 2 2, 2019, 8 6th L eg ., R. S. , ch. 8 2 0 , H.B. 249 7, § § 2 , 4

. We cite the v er s ion th at w as in e ffect a t t h e time of those
ev ents
. S ee i d. § 3(b)

.14 “a ny de c i sion o f th e b uildi ng i nspect or or ot her administrative off i cer of the c ity

re la tive to the z oning o rd i na nce ” an d that appeal must “be take n w it hin 15 days after
the d ate of t he dec ision of th e bu ilding in s pecto r o r oth e r a d min istra tive o ff icer h a s been ren der ed

. ” Grapev ine , Tex

. , Code of Ordinances, a pp
. D , § 68.G.
The ad justment board “ may reverse or affirm, in whole or in part, or modify
the administrative official ’ s order, requi rement, dec ision, or determination from which an appeal is taken and make th e c orrect order, requirement, decision, or
deter m ination, and for that purpose the b oard has the same authority as the
administrative officia l

. ” Tex. Loc. Gov ’ t Code A nn. § 21 1.009 (b) ; see Gr apev ine , Tex

. , Code of Ordinances, a pp. D , § 68. I. An aggrieved p ers on may th e n appeal the board
of adjustment ’ s d ec is ion by filing, within ten days of t ha t decisio n, a verif ied petition
in a d ist r i c t cou rt, c ounty co urt, or count y court at l aw s tating tha t th e board ’ s decis ion “is ille gal in whole o r in part .” T ex. Loc . G ov ’ t Code A nn. § 211.011 (a )(1), ( b).
General l y, a party must exhaust admi ni strat iv e remedies available under Local
G overnm ent C od e Section 211 .011 befor e se ek ing j u dici al r evie w of an ad m in istr ative
off ic ial ’ s de cision. See City of Grapevine v. CBS Out doo r, Inc. , No. 02

- 12

- 0 0040

- CV, 2013
WL 530 2713 , at *4 (T ex. App.

— F or t Worth Sept. 19, 2013, pet . den ie d) (mem. op

. on reh ’ g ) (citing cases). T he admin i str a ti ve

- exhau s t ion req uir em e nt compel s a par ty to

“ pursue al l a vailable remedies within the adminis trat ive process before se ek ing judicial

r eli ef. ” L a z a rides v. Farris , 3 67 S.W.3d 788, 798 (Tex. App.

— Hous to n [ 14th Dist .]15 2012, no pet.) ( quoting Larry Koc h

, I n c. v. Tex. N at

. Res

. Con s ervation C om m ’ n , 52 S.W.3d
83 3 , 839 (Tex. App.

— Austin 2001, pet. denied ))

. “ Un less the par ty has e xhausted all

a dmi nis tra t i v e re medi es, the tr ia l court lacks subject[

- ]mat ter j ur is d iction. ” CBS
O utdo or , 2013 W L 5302713, at *4 ( cit i ng City of P aris v. Abbo t t , 360 S. W .3 d 56 7, 572 (Te x . App

. — Texarkana 2011, pet. denied ) ); see Tex . G ov ’ t Code Ann. § 3 11 .034 (“Statuto ry pre req u i s ites to a suit

. . . are jurisdictional require ments i n a ll suits against

a governmen tal entity.”).
B. Analysis
He re , t h e Cit y c o nt ends that a l though the Homeowners ’ suit h as been brought

as a con s titutional ch allen ge to th e STR Or di nance, the source of t h ei r complaint i s the Ci ty ’ s determi natio n that the Z oning O rdinance has al ways prohi bited STRs

. T hus, it ar gue s , bec ause t he Home own ers were aggrie ved by Wi llia m s ’ s and Boyle ’ s decision s to that ef fec t , the Homeowners were r e quired to appeal th o s e decisions to
the C i ty ’ s board o f adj ustment be fore suing the City

. The Homeowners acknowledge
that t h ey did not appeal to the bo a rd of ad justmen t but coun ter that ne it her Boyle ’ s

com m ents durin g t he cit y
- co uncil meeting nor Williams ’ s stat em e nt s in the notice

tr igger ed S ecti o n 211. 011 ’ s ad ministrat ive proce dur e s . The Homeowners further

cont end that the y were n ot require d to exhaust their ad ministrative rem edies before
filin g suit bec aus e they are challenging the STR Or dinance ’ s c o n stitu tionality, which
the board of adjustment lacked the authority to determine. See Brennan v. City of Willow
Par k , 376 S.W. 3d 91 0, 916 (Tex. App.

— Fort W o rth 2012 pe ts. d enied) (identi f ying16 exce p ti on to exhaustion

- of

- administrative

- rem edies r e quirements “ when certain
constitutional issues are involved ” )

. In the trial court, t he City had the in itial bur den of establishing t ha t the
Ho meowners had to exhaust t heir a dm inistr at ive remedies b ut failed to do so

. See
G a rci a , 372 S.W.3d at 635 ; Ri sol i v . Bd. of Ad justment of City of Wim berl ey , No. 03

- 17

- 00385

- CV, 2 017 WL 4766724, at * 5 (Tex. App.

— Austin Oct. 2 0, 2 017 , no pet .) ( mem. op .)

. As noted, the board of adju s tment ’s autho rity includes th e power to hea r and to decide an appeal that alleges error i n a decision or determination made by an
administrative official in the enforcement of a zon ing ordinance. Tex. Loc. Gov ’ t Code Ann. § 211.009 (a)(1) ; see Grapev ine , T e x . , Code of Ordinances, a pp. D , § 68. H. 1

. The Local Govern ment Code d o es not define “ en fo r cement
. ” O u r objec ti ve in

co nstru ing the Local Government Code is to discern t he l eg is lature ’ s intent

. See F ort
Worth Transp. Au th. v. Rodrigue z , 547 S.W.3d 830 , 838 (Te x. 20 18 )

. In doing so , we look
fi rs t to the pl ai n meaning of the text , using any definitions pro vided. See i d. When , as he re, no d efinit ion is given , we give a wor d i ts common, ordina ry m eaning

. S ee id. An d

t o d et e rmine a term ’ s co mmon, ordin a r y m eaning, we lo o k t o dic t io n a ry d efi niti on s. S e e i d.
I n ordinary usage, “ e nforcement ” is the “ act or process of compelling

com pliance with a law, mandate, command, decree, o r agreement
. ” Enforcement , Black’ s Law Dict ionary ( 11th e d. 2019)

. “ Compel ” means “ [t ]o cause or br ing abou t17 b y forc e, threats, or overwhel ming pressure

. ” C ompel , Black’s Law Dictionary (11th e d. 2019)

. Assuming that Boyle’s and Williams’s statements that the Zoning Ordinance
ha s always prohibited STRs ros e to the level of bein g decisi o ns or determinati ons made by an ad ministrative official, building inspect o r, or other administrative officer , those decisions or determination s were not “ made i n the enforcement ” of the Zoning
Ordinance bec ause they were not made in the ac t or process of c omp elling complia nce with the ord i na nce . Both statements are purely informational , 20 essentially telling the Homeowners how the City had recently decided to interpret the Zoning
Ordinance , with Williams’s notice det ailing the penalties for violating it and sta ting
that the City would start en forcing the Zoning Ordina nce 45 days in the f u ture , even though the City had not enforced it thus far. 21 Moreover, we agree with the Homeowners that they were not required to
exhau st their a dministrative rem edies before f ili ng suit becaus e the ir claims in t his suit

are c hal lenging the STR Or dinance ’ s c o nstitu tionality and would not have been mooted by an administrative decision

. Generally , administrative bodies do not have

20 The trial court viewed Williams ’ s letter t he same way , sta ting during a hearing that the letter was “ infor mati ona l ” and questioning the City ’ s a ttorney, “ Where doe s it say that y our condu ct is in violatio n of the ordinanc e?

. . . Whe re does it say that the C i ty has determined that yo u are in v iola tion of the ordi nance and you are being advised to s top ? ”

21 Indee d , as we noted earlier, City employees had explicitly ass ured some of th e Home owner s th at the City had no r estrict ions, regulations, or permit re quirements for STRs , and the City accepted sh ort

- term

- occupancy taxes proffe red by some of the Homeowners.18 auth ority to rule o n the constituti onality of sta t ute s and ordinanc es. S ee City of D allas v. Stewa rt , 361 S.W.3d 562, 5 68 (Tex. 2012) (op. on reh ’ g ) (citing Cent. Power & L ight Co. v. Sharp , 9 6 0 S.W.2d 617, 618 (Tex. 1997))

. “ The su preme court has held that
ad ministrative ag encies lack th e ul timate power of constitutional co nstruction

. ” C ity of
Richardson v. Bowman , 555 S.W.3d 670, 6 86 (Tex. App.

— D al las 2018, pet. denied) (citing Ste wa rt , 361 S

. W .3d at 56 8 )

. “ No Texas agency has been granted the power to
engage in constitutio nal construction, and any such att empt by the le gis lature to vest such p ower would raise serious and grave issues of a separat io n of powers violation. ”
Id. (quoting Ste wa rt , 361 S.W.3d a t 56 8 ). The adju stment bo a rd th us lacked the p ower

to de clar e whether either the Zoning Ordinance or the STR Ordinance vi ol ates th e Texas Con stitution.
As th e City poin t s out, though, just because a claim is based on the T exas Constitution does not ne cessarily mean that a plaintif f ca n proceed direc tly to filing

su it wi thout first exhausting his administrativ e remedies

. S ee Ga r cia v. City of Willis , 593
S.W.3d 2 01, 21 0

– 12 (Tex. 2019 )

. C laims based on the Texas Con stitution are not

“ globally ex emp ted ” f rom “ statutory exh austion

- of

- r e med ies requirem ents
. ” Clint ISD

v. M arquez , 487 S.W.3d 538, 55 2 n. 9 (Tex. 201 6)

. If the admi nistr ativ e proceeding

cou ld have obviated the ne ed for a p laintiff to file suit because the proceeding had the potential to moot that claim, then the plaintiff mus t pu rsue his a dmi nistrative
remedie s. See, e.g. , Gar cia , 593 S.W.3d at 211

– 12 ; Wat son v. Cit y o f S outhla ke , 594 S.W.3d 506, 52 2 (Tex. App.

— F o rt Worth 2019, pet. den ie d )

.19 Here, it is immaterial wheth er the a dminist rative p rocee ding could have
resolve d the H o meo wners ’ claims, so long as the a djustment board coul d “ render
rel ief that wo uld have moot e d tho se cla ims

. ” Wat son , 594 S.W. 3d at 522 ( ci t ing Gar cia , 593 S.W.3d at 211

– 12 ). In other words, “ [t] h e q u estion

. . . is not whethe r an administrative h earing co u ld have re so lve d all of [ the plain tiff ’ s ] claims, c onstitutional

or otherwise. ” Gar cia , 593 S.W. 3d at 211

. The pr oper i nquir y is whethe r the
administrative proce eding

—here, appe aling to the adjustment board

— could have
rendere d the Homeowners ’ claims moot. See id

. ; Stewart , 361 S.W.3d at 57 9 ; see also Cit y of D allas v. VSC, LLC , 347 S. W.3d 231, 23 6

– 37 (Tex. 2011) (holding tha t p roperty owner was barred from bringing constitutional

- takings c laim where owner failed to
pursue a dmi nistrativ e re medy that could h a ve mooted claim th rough return of
pr operty or just compensation )

. H ere, Boyle ’ s statement an d William s ’ s letter informed the Homeowners that
the Zoning Ordinance ha s al ways prohibited STRs

. Although the mea ning of the Zoning Ordinance is a compone nt of th e Ho meowners ’ cl aims, the t arget of their suit
is t h e STR Ordinance ’ s express STR ban. Had th e Homeo wners appealed B oyle ’ s and
Williams ’ s in terpretation of the Z o ning Ordinance to t he adjustment board , the
board ’ s decision reg arding th at interpretation wou l d n ot have ob via ted the need for

t he Homeowner s to bring their t a kings claim and constitutio nal challen ge s to the STR20 Ordinance because the STR Or dinance would have r emained in place

. 22 In other words, a boa r d determination th at Boyle and Williams w ere cor r ect

— that is , t hat
S TRs are not a p ermitted use under the Zoning Ord i nance

— would not have avo ided

t he need for the Homeowners to bring their takings claim and their challenge to the
STR Ordinance ’ s constitutionality . The sam e would be true if the board ha d
de t ermine d that Boyle and Wi lliam s were wrong

— t h at STRs are a permitte d use under the Zoning Ord inan ce

— because the STR Or dinance expressly banning STRs would still be in place. 23 Accordingly, we overrule the City’s first issu e.

22 As noted, the bo ard o f adju stment ’s autho rity includes th e p ower t o “ hear a nd decide an ap peal that alleges er ror in an order, requirement, decision, or determination made by an administrative offi cial in the enforcement of ” a zon ing ordinance. Tex

. Loc. Gov ’ t Code Ann. § 211. 00 9 (a)(1). In exercising that authority , the adjustmen t board “ may re verse or affirm, in whole or in part , or modify the administrative official ’ s order, requirement, decision, or determination from whic h an a ppeal is taken and make the c orrect orde r, requ ir ement, decision, or de t ermination, an d for that purp ose the b oard h as the same authorit y as the adminis trative officia l

. ” Id. § 211.009 (b)

. The C i ty does not c ontend that the adju stment board could hav e done away with the S TR ban a ltoge ther.

23 The C i ty do es not contend that th e H omeowners were requi red to ap peal Wil liams ’ s statement that the STR Ordinance si m ply affirmed the Zoning Ordinance ’ s prohibition on STR s. But even if the City had so argued, we d o not see ho w the adjust ment board ’ s review of t hat s ta tement could have obvi a ted the n eed f or the Homeow ne rs ’ takings cla im and claims challe nging the STR Or di nance ’ s constitutionality.21 IV. The Zoning Ordinance
B ec au se wheth er the existi ng Zoning O rdinance allowe d STRs informs our

ana l ysis of the City’s r emaining issues, we must address whether STRs were in fact allowed in the City before the STR Ordinance expressly banned t hem.
We con s true ordina nce s and statutes u si ng th e s am e rules

. Bd . o

f Ad just me nt of
the Cit y of S an Antonio v. W e n d e , 92 S.W.3d 4 2 4, 4 30 (Tex. 2002) ; Town of Annetta S

. v. Seadrift De v . , L .P. , 446 S.W.3d 823, 825 (Tex. Ap p
. — F ort Wor th 2 014, p ets. denied )

. T he constru ction of an ordinance is thus a l egal question. Powell v. City of Houston , No.
19

- 0689 , 2021 WL 2273976, at * 2 (Tex. June 4 , 2021). Our objective i n construing the
Zonin g Ordinance is to discern the City ’ s intent. See To wn of Annetta S

. , 4 4 6 S.W.3d at
825

. “In giving effect to the

. . . o rdinance as a whole, we should n ot assign a meaning to a provision that would be inconsist ent with other provisions of the

. . . ordi nance.”
Id. (citing Wende , 92 S.W.3d at 430). Ordin a nces regulating land u se are in deroga tion
of the common law and ar e th us strictly construed against th e municipality and in the
landowner’s favor. See id. at 82 5

– 2 6; City of Kermit v. Spruill , 328 S.W.2d 219, 223 (T ex. App.

— El P aso 1959, writ ref’d n.r.e

. ) ; Thomas v. Zoning B d

. of Adjustment of City of Univ.
Park , 241 S. W. 2d 955, 957 (Tex. App.

— Eastland 19 51, no writ)

. As n oted, the zoning districts in which the Homeowne r s ’ propertie s are lo cated
allow “sin gle

- family d et ached dwellings” as a principal permitted use. See Grapevine,
Tex ., Code of Ordinances, app. D , §§ 15.A .1 , 16

. A. 1

. A “single

- fam i ly deta ched
dwelli ng ” is “an enclosed building hav ing accommodations f or an d occ upied by only22 one famil y, ” and a “ fam il y ” is “any numbe r of individuals living to gether as a single housekeeping unit interdependent upon one anoth er.” Id. §§ 12.A. 394, 12.A.1 4 0.
The City argues t hat STRs do not fit within the definition of a “ si n g le

- family
d etached dwelling ” becaus e STRs are n ot occupied by a s ingle family but are occupie d by grou ps of people

— some f amily, some not

— in quick succession. R e lyi ng o n out

of

- s tate ca ses, the City further argues that STR t enants

— “whose stays c a n be a s tempor ary as one da y ”

— “ are no t living at th e properties as a single housekeeping
unit” b ecause t he phrase “single h ousekeeping unit” is a “commonly used t erm in

z o nin g ord inances [, ] a nd cour ts throughout the country agree that th e term requires
an ele m e nt of permane ncy an d stability, rat her than tra ns i ency.” 24 But w e are of

24 See, e.g. , Planning & Zoning Com m ’ n of t he Town of Westport v. Sy nan on Found., Inc. , 216 A .2d 442, 443 (Con n. 196 6 ) (co nc luding t hat “eve r

- ch a n g i ng” group of i n divi duals who s lept, co oked, a te, worked, and carr ied on activit ies in a dwelling did not come within the meaning of the word “f amily”) ; Open Door Alcohol ism Progra m, Inc.
v . Bd

. of A dj ustment of Cit y of N e w B runs wick , 491 A.2d 17, 2 2 (N. J. S up . Ct. 1985) (“[I]n ord er fo r a group of u n related persons l iving together as a single housekeeping unit t o consti tute a single family in t erms o f a zoning regulati on, they must exh ib it a kind of stabili ty, perm a nen c y a nd f unctional lifes tyle whic h is equ iv alent to tha t of the t radit iona l family u n it.”); City of Wh ite Plains v. Ferraioli , 313 N.E.2d 756, 758 ( N.Y. Ct. App. 1974) (“So long as the grou p home bears the ge neric chara cter o f a fa m ily u ni t as a r elative l y pe r m a n ent household , and is not a fram ewor k for transi ents or tran sie nt liv ing, it c o nforms to the purp ose of the ordinance.”); Slice of Life, LLC v. H amilton Twp. Zonin g Hearing Bd. , 207 A. 3d 886, 899 (Pa. 20 19 ) (noti ng that the Pen nsylv an ia Supre m e Co urt has a d o pted the comm o n def inition o f “singl e housekee ping unit,”
us e d by cou rts thr oug hout the country , as requiring the person or persons residing in the hom e to function as a family and t o be “sufficiently stable an d perman en t” a n d not “ purely t ransi ent ” an d h o ldin g that, b y defi ning “fam il y” as re quiring “a single hous e keeping unit,” the ordinance “clea rly and unambiguously excluded , in pertinent part, purely transient uses of property in Zoning Distri ct A”)

.23 course not bound by out

- o f

- stat e au thorit ies, and t he City cites no Texas cases that
di rectly sup por t t his int erpretation o f “single housekeeping uni t.”
As the Zoning Ord i nance defines t he wo rd, “ family ” doe s not re qu ir e that the people li ving as a “si ng le housekeeping u nit ” be related by bloo d or marr iage

. Moreover, n either “ single

- fa mily det a che d dw el ling ” nor “ li ving toget her as a single housekeepi n g u nit interdependent upon one anothe r ” ha s any occupan cy

- duration
req ui reme nts , and neither phrase add ress e s leasing, whether short

- or long

- term. W e decline to add occupancy

- duration restr i ctions wh e n n on e are there

. C f. Sch ack v. Prop.
Owners A ss ’ n of Sunset Bay , 555 S.W

. 3d 339 , 350 (Tex. Ap p.

— Corpus Christ i

– Edin burg
2 01 8, pet. denied) ( holdin g that phrase “living as a sin gle household unit” in a restrictive covenant did not prohibit s h ort

- term rent a ls)

. We thus co nclude tha t the term “single

- f amily det ached dwelling” as d efined in t he Zoni ng Ordinance does not
pr ohibit S TRs in the two zoning d istricts in wh ich the Homeowners ’ properties a re located , so long as the rent ers meet the Z o ning Ordinance ’ s def in ition o f “ f amily

. ” S ee id. The City n ex t conte nds that an STR is mor e in line with a “b us iness serv ic e , ”
which i s not a permitted “ accessor y use ” i n either of the two zoning districts

. Grapevine, Tex., Code of O rdinances, app. D , §§ 15.B, 16

. B

. An “a c ces sory use” is “a
use subor dinate to and incid ental to the p rincipal use.” I d. § 12.A.2a. A “pri ncipal u se ”
is “ a use which, in co mpa ri son with another use occurr ing on the same pro p erty, has the g reatest effective produc ing power

. ” Id. § 12.A. 327

. Rele v a nt here, a “ business24 service ” is “a co mmercial use, other th a n retail sales a nd p rofessional serv ices , de vote d to
. . . [t]he providing of temporary abodes for tra nsie nt persons, su c h as a hotel or motel.” Id. § 12. A. 36(c). “Commer cial” in t urn mea ns “any bus iness, ot her than a customary hom e occupation or man ufact u ring bu siness, w hich involves t he

ex change of go od s or services for the remuneratio n of a person occupying the pre mises up on whic h the transactio n or part thereof takes p lace

. ” Id. § 12.A

. 64 (em p has is ad ded)

. Because
the H omeowners d o not simultaneously occupy the ST R s , the ir S TRs are n ot a

commer cial use and t hus not a “ business service. ”
T he C ity also argue s that the c ity c oun cil ’ s amen dment to the Zo ning
Ordinance in 2 000 t o allow bed a nd brea k fas ts as perm i tte d accessory uses for

“ single

- fam ily dwelling u n its ” but to sp ecifical ly e xc lud e “ single

- f amily dwel li ng transient rental s ” from the defin ition of bed and bre akfast s i ndicated that t he City did
not inten d for STRs to be i nc luded wit hin the def in i tion of “ s ing le

- fam ily detached
dw elling. ” Th e C ity contend s that a ltho ugh the p hrase “ single

- famil y dwelling
transient rentals ” was undefined , it s meaning is “ cl ear ly differ ent ” from that of “ a sin gle

- family d e tached dwelling. ” Th e Zon ing O r dinance ’ s l anguage, h o wev er, d oes not support this interpretation

. If the City i ntended to excl u de “ single

- fami ly dwelling

tr ansient rental ” from the definition of “ singl e

- family d e tached d welling , ” it c o uld
have ame nded the Zoning Ord i nance to re fle ct that inten t
. A ccordingly , we conclude as a matter of law that STRs w ere a p ermitt ed use under the exist ing Zon ing Ord inance.25 V. Advis ory Op inion
In i t s second issue, the Ci t y ar gue s that an y o rder declaring t he STR Ord ina nc e unconstitutio nal and enjoining the City f r om en forcing i t would be a n advi s ory

o pinio n because the existing Zoning Or d i na nce do es not allow S TRs

. Bec aus e the
Homeow ne rs ha ve not directly chall enged the Zo ning Ordi na nce , so the argument
goes, any order decl a ring the STR Ordin ance uncons titu tional a nd enjoining its
enf o rce ment would be advisor y because the City c ould continue to enf or ce it s STR
ba n thr ough the Zoning O rd inance . In othe r w ords, th e declara to ry an d inju nct ive
relie f the Homeowner s seek

— that the STR Ordinance is unconstitu tional

— would

n ot affect the Homeow n ers ’ abili ty to opera te ST R s in the City because S TRs are not
a p ermitt ed use under the Z o ning Or dina nc e . F or t his reason, t he Ci ty c ontends tha t
the trial court la cks s ub ject

- matt e r jurisdictio n over the Homeowners ’ cla ims

. Subject

- m a tte r jurisdiction re q uir es that the case be just iciable. St ate Bar of Tex.

v. G omez , 8 91 S.W .2d 243, 245 (Tex . 1994). A “justiciable co ntroversy” is a real and
substant ia l co ntr over sy involving a ge nuine conflict of tangible interests and not j us t a

t he or e tic a l dispute. B on ham S tat e Bank v. Bead l e , 907 S.W.2d 4 65, 467 (T ex. 1995)

.

“ [F]or a contro ver s y to be justi ciable, there must be a re al con troversy between the parties t hat wi ll b e actually res olv ed by the judicia l relief sought. ” Gomez , 891 S.W.2d
at 2 4 5

. Witho ut a justiciab le contr oversy, a tr ial court must dismiss a c ase for l ack of subjec t

- matte r jurisdiction. Tran sp. Ins. Co. v. W.H. Cleaners, In c . , 3 72 S.W.3 d 223, 227 (T ex. App.

— D allas 2012, no pet .).26 Here, t he Homeowners admit that they ar e not di r ectly challeng ing the Zoning
Or dinance : “ It is qu ite true that the Home owners conten d tha t t he prior ord inances
did not ban STR ’ s . But th at is not the objec ti

ve of their suit; it is a requ ire d element of
their const itutional claims

. ” The Home owners c on ten d th a t , to a certain exten t , whether they succeed on their claims hinges on wheth er the Z o nin g O rdinance
all owed STRs. We agree wi th th e Hom e owners that their retroactivity , due

- course

- o f

law , an d takings cl aim s turn on whethe r the e xisti n g Zoning O rdinanc e al low ed STRs

. Beca u s e we have det ermined that it did , the H ome own er s ’ fa ilure to direct l y c hallen ge the Z o ning Ordinanc e does no t ren de r t heir suit a request for an advisory opinion.
We thus ov errule the City ’ s second i ssue. VI. Article I , Se ction 1 7 of t h e T exas Constitution ( Re gu la tory Taking s )
In its third issue, the City a s ser ts that the tr ial co u rt erred by no t dismissing th e
Home ow ner s ’ regulatory

- tak ings cl aim under the Texas Constitution

. 25 Through that
claim , the Homeowne rs seek monetary compensa t ion or a “specific re cou pmen t
pe riod

. ” See Tex. Const. art. I, § 17(a) (“ No person ’ s p ropert y shall be ta ken , damaged,

or destroyed fo r or applied to pu blic use with out a dequ ate compensation being

25 A reg ulatory

- takings cl aim is a type of inverse

- con demnation claim

. Edwa rds A qu ifer Aut h. v. Br ag

g

, 4 2 1 S.W.3d 118, 1 3 4 (T ex. A pp.

— San Anto nio 2013, pets. deni ed) (op

. o n r eh ’ g)

. “A compensable regulatory taking can occur when [the] government[ ]

. . . i mposes restri ctions that either deny a pro perty ow ner all economica l ly via ble u s e of his property o r u n r easonably in te r f ere[ ] wi th the owne r ’ s right to use and enjo y t h e p ro perty. ” Ci ty of Dall as v. Blanton , 200 S.W.3d 266, 271 (Tex. App.

— Dallas 2006, no pet.)

.27 made

. . . . ” ). C iti ng the S u preme Court ’ s opinion i n Penn Central and the Texas Supreme C ou rt ’ s Sheffield opinion , t he Homeowners pl eaded that t he STR Or dinance

un reasonably interf ere s with th e ir right to use a nd e njoy their pro pert ies by
elimi na t ing their ability to genera te short

- t erm rental income fr om their p rope rties and
interfe r ing with th eir reasonable investment

- backed expectations i n buyi ng and improving th eir properties to use as STRs

. See P enn Cent . Trans p. Co. v. City of New
York , 4 38 U.S. 104, 124 , 98 S. Ct. 26 46 , 2659 (1978) ; Sheffield Dev. Co. , Inc

. v. City o f
Glenn He ig hts , 140 S.W .3d 660, 672 (Tex. 2 004)

. The City argues that the reg ulat or y
tak ing s claim i s inval id be c ause (1) the Home own ers h ave no vested right t o a particular use of th e ir pro perty ; ( 2) the Cit y ’ s action did not cause a taking; a n d ( 3 ) the
value of t he Ho meowners ’ prop ert ies has increased

. Th e C i ty thus contend s tha t its
immuni ty is not wa i ved. Se e Hearts B luf f Game Ranch, Inc. v. Stat e , 381 S.W.3 d 46 8, 491 (Tex. 201 2) (holding t hat trial court did not have jur isdiction over disp u t e becaus e
pro perty owner did n ot plead and prove sufficient fa c ts to establish a v iable inve rse

co n demnation cl a im) ; City of Carr ol

lto n v. Hamrla , No. 02

- 15

- 0 0119

- CV, 201 6 WL
93 031, at *2 (T ex. App.

— Fort Wor th Jan. 7, 2016, pet. denied ) (mem. op.) (“Gove r n mental i mm uni ty is waived for vali d takings claims.” (emphasis added)).
B efore we dis cuss wh ether the Homeowner s pleaded a Penn Centr al cla im , we must first address the C i ty ’ s vested

- rights an d caus ation argum ents , whic h

— if
merit orious

— would ob viate the n e ed for a Pe n n Central ana lysis

.28 The City maintains that because the Hom eowne r s do not have a ve sted r ight to
use the ir p ropert ie s in a certain way without restricti on

— spe cifi call y , a s STRs

— thei r regulatory

- taking s claim fai ls as a matter of law. Al though a property own e r gener ally
has no ves ted r ight to use h is property in a c ertain w ay w it hout r e stric tion, s ee FLCT , Ltd. v. Frisco , 493 S.W.3d 23 8 , 27 1 (Tex. App

. — Fo rt Wort h 2 0 16 , pet . denied ) , the
Hom eow ner s do have a propert y inter est in the p r o perties th e mse lve s , see Strat ton v.
Aust in ISD , 8 S.W.3d 2 6 , 29 ( Tex. A pp.

— Austin 1999, n o pet.) ( “ A pe rson ’ s p r operty
in terests include actual ownershi p of real e state , chatt e l s, a nd m oney . ” ( cit ing Bd. of Regent s of State C oll s . v. Roth , 40 8 U.S. 564, 5 7 1

– 7 2, 92 S

. Ct . 2 701, 2706 (1972) ) ). “ In a regulatory tak ing, it is the passage of the ordi nance that i njur es a property ’ s val u e or useful ness . ” Lowenbe rg v . City of D allas , 168 S.W .3d 800, 802 (Tex. 2005)

. Bec au se the
Homeow ners have a veste d property i n t erest in t h e prop erties themselves and cla im that the City has u n reasonably interfered with their right s to us e and e n joy their
proper ties by passing th e ST R Or di nance , w e conclude that they ha ve identified a
p ro perty right s ufficient at this stage to al l e ge a regu l a tory

- t akings claim. We further
note th e unremarkable a nd well

- established notion that privat e

- property ownership is a fundamental right , see He ar ts Bluff , 381 S.W.3d at 4 76, that embraces such “ essential

a ttributes ” as “ the right t o use, lease [ , ] and disp o se of it for lawful purposes, ” Terrace v. Thompson , 26 3 U.S. 197, 215, 44 S. Ct. 15 , 17

– 18 ( 1923).
Next , we address ca usa tio n. “ Pr oximate cau se i s an essential element of a

t akin gs case. ” Hearts Bluff , 3 81 S.W.3d at 483. “ [ W] ithout c au sat ion, th ere is no29 ‘ taking

. ’ ” Id. (quotin g Ta rrant Reg ’ l Wa ter Dist. v. Gr agg , 43 S.W.3d 609, 615 (T ex. App.

— W ac o 20 01), aff ’ d

, 15 1 S .W.3d 546 (Tex. 2004) )

. “ C au sa tion is in trinsic to a

t aki ngs claim . The governmen tal entit y su ed mu st have taken direct gover nmental action, o r have been the proximate cause , of the harm. ” Id. at 48 4

. “ [ O ]wners of inversely condemned p roperty cannot r eco ver damage s the governme nt did no t

cau se. ” Koppolow Dev., I n c. v. C ity of San Antoni o , 399 S. W.3d 532, 53 9 ( Te x. 2013) ; se e Hear ts Bluf f

, 3 81 S. W .3d at 483 (not ing “ the governmental entity must be the cause of
the harm ” ).
For the first t ime o n a ppe al, 26 the City claims that the STR O r din an ce was not
th e cause in fa ct o f any al leged takin g of the Home ow ne rs ’ propert i e s b ecau se STRs

are not a permitt e d use un der th e e xisting Z oning Ordinance. T h e H o meowners respond th at this argument fa i ls b ecause the Zoning O r dinance allow ed “ le as ing

unres tricted by duration. ” We agr e e , having conclud ed above tha t th e Zoning
Ordi nance pe rmitted STR s . W e thus conclude that the Homeowners have suffic ien t ly
raise d a fact issue a bou t whethe r the STR Ordinance ’ s passage ca used an al leged

ta ki ng under the Penn Centra l fac tors , to which we n o w t urn .

26 We co nsider this argume nt e ven tho ugh the City did not rais e it in the tr ial cour t. See R us

k S t a te Hosp. v. Bla c k , 3 92 S. W.3d 88, 94

– 97 (Tex. 2012) (ho lding def endant s may brin g

— and courts must address

— immunity

- based jurisdictional challenges that are raised fo r the first time o n appeal, e ven in t he context of an interlo cutor y appeal); see als o Da l l

. Metroca re Serv s . v. Juar ez

, 420 S.W. 3d 39, 41 (Tex. 20 13) ( “Und er Rus k , an appe llate court must consider all of a defendant ’ s immunity arguments, whet her the govern mental entit y rais ed other ju risdicti onal arguments in the tr ial c ou rt or no ne at al l. ” )

.30 U n d er the Penn Centr al test, a regulatory taki ng can occur when gove rnment

a c tion unreas onably interferes wi th a lan downer ’ s use and enjoyment of the prope rt y. Sh effield , 140 S .W.3d at 671

– 72 ; FLCT , 493 S.W.3d at 27 2

. I t is an ad hoc , fact

intensi ve i nquiry rather than a formula ic tes t. Sh e ffield , 140 S.W.3d at 672

– 73. G uiding

con s iderations under th e Pe nn Central test include (1) “the economic impact of the
reg ulation on th e c laimant,” ( 2) “the exte n t to which the reg ulation has interfered with
di st in ct investment

- backed e xpectations, ” and (3) “t he ch a ra cter of the governmental

ac t ion.” Id. at 672; s ee H earts Bluff , 381 S.W.3d at 477

– 78. The inqu iry focuses on
whether the regulation has g one “too far ” so as to constitu te a takin g. S heffield , 140
S. W. 3d at 671

– 7 2. The ex tent of the gov ernment al int rusio n may be a que stion for the

tr i er of fact, but whe th er the facts alleged cons titute a taking i s a q uestion of law

. I d. at
6 7 3.
T he City argues that t he H o meowners ’ t akings claim is inv alid becaus e the STR
Or dinance did n ot un rea sonabl y interfere with thei r right s to use and e njoy their properties u nder tw o o f the th ree Pen n C entral factors : (1) the STR Ordinance ’ s economic im p ac t o n the H o meow ners ’ pr o perties i s insufficient to amou nt to a t a king and (2 ) th e STR Ordi nance does not in terfere with the H omeow ners ’ re asonable
invest ment

- bac k ed expect ations. The City c ontends that the evidence before the trial

court con clusiv ely e st a blished both factors in its favor.
The first factor

— the regula tion ’ s e co nomic i mp ac t on the property owner

—

“ c o mpare s t he v a lue that h as been take n from the pro pe r t y w ith the v alue t hat31 rem ains in the property. ” Mayhew v. Town of S unny vale , 964 S .W .2d 922, 935

– 36 (T ex. 19 98 ). Contrary to the City ’ s a ssert ion, lost profit s are a rele vant factor to consider in

assess ing t he p roper ty ’ s valu e and the severity of the ec o n omi c impact on a p roperty

owner. Sheffield , 140 S.W.3d at 677 ; see C i ty of Sherman v. W a yne , 266 S.W. 3d 34, 45 ( Tex. App.

— Da llas 2 008 , n o pet. ) ( “Whi le i t is true that go vern ment is not an insurer of th e profitable us e of property, it is incorre c t to say t hat pro fi t i s no t a consideration in determining the value of property. ” )

. Relevant her e , a prope rty owner ’ s inability to

co ntin ue renting his proper ty on a short

- term ba sis due to a city ordinance c an

c ons titute evid ence of economic impact. See Vill

. o

f T iki Isl an d v . Ro nq uill e , 46 3 S.W.3d 562, 5 79 (Tex . App

. — Hou ston [1 st Dis t.] 20 15, n o pet.)

. T he City points out th at the Hom eowners can always lease their proper ties on a long

- term basis and have ad m itted that at the time of the jurisdictional inquir y th ei r
proper ties w ere worth mor e tha n when pu rc hased

. The City ’ s ex pert

— a c ertified general appr a iser

— c on fi rmed that each affected proper ty ’ s market va lue had
in c re ased sinc e the Homeowners bought th em. Further, a ccor ding to th e Tarrant
Count y A pp r aisal Dist ri ct ’ s Chie f Appraiser, the market val ue of each proper ty ha d
incre a sed from 20 16 through 201 9

. Bu t the Home owners did not base their e co nomic

- imp ac t allegations on decrea s e d market val ue . Th ey plea ded t hat ST Rs “generate hi gh er average rent than long

- term l eases, even aft er expense s ” and th at the ST R O r dinance p revents them
from “ participatin g in an active, lucrative market for [STRs]. ” The Homeowners ’32 evi d ence support s th i s asser tio n . All the H ome owner s testified t ha t they were earning
rental income from th eir STRs and that renting out their pr oper ties on a short

- term basis gen erate s high er reve nu e s than lo ng

- term leasi ng does

. Additionall y, t he
H omeo wners ’ e xpert

— a ce rtif i ed general

- real

- estat e apprai se r

— o pined that over a

ten

- year p er iod, th e c om bined po te nt ial gross

- rent al d ifferen tia l between typical
market rents f or long

- t erm versus s h ort

- term le ases f or the Homeowners ’ pr operties
exceeded $4.2 million

. T he City admits tha t lost profits are “ one r elevant factor ” to consider in

asses sin g a property ’ s va lu e and the severity of an ordin ance ’ s e conomic i mpact on a l a n d owner. Se e S heff ield , 140 S.W. 3d at 677. But , t he City arg ue s, the H om eowne rs ’
lost

- pro fit allegations do n o t in and of themse l ves show a sufficie nt econ omic impac t

o n which to base a re gulato ry

- takin gs claim

. T he Homeowner s did not si m p ly plead lost profi ts , though ; they pres ented sup porting e vi denc e

— e vi dence of the typ e that a
trial court can co nsider in a re g u latory

- takings claim

. See Vill

. o

f Tik i Island , 46 3 S.W.3d
at 5 79. W e thu s c onclud e t hat i t i s some evidence of the STR Or dinance ’ s econ omic
i mp act on the Hom e owners ’ prop e rty. See id.
A s f or t he sec ond Penn Central facto r

— the e xtent to which the r e gulat i on interferes with the property own er ’ s distinct inve s tme nt

- back ed expectations

— a
p r op erty ’ s existing and per mitted uses co nstitute the affected pro perty owner ’ s “primary expect a t ion

. ” Mayhew , 964 S.W.2d at 936. T he supre m e court has noted t hat “[h ]istori c al uses of the property are critical ly impo rtant when de termining the33 reasonable in v e s tment

- backed expect ati on of the lan d owner.” Id. a t 93 7

. R egula tions
at th e time of p urchase should be considered in determining whether t he later, challeng ed regu lation i nterferes with investment

- ba cked exp ectatio ns. Id. at 93 7

– 3 8.
And kn owledge of exist in g regulations “is to b e considered in d ete rmining w h ether
the re g ula tion int er feres with inv estment

- backe d expectations.” Id. at 936. “ The
p urpose of the inve stment

- back e d [

- ] expectation requirement is to asses s whet her the
lan dow ner has taken legitimate ri sks with the reasonabl e expectation o f being able t o use the prop e rty, wh ic h, in fairness an d justice, woul d entitle him or her to
compens at ion

. ” Edwards Aqu ifer Aut h

. , 4 21 S.W.3d at 142

. The Homeowners pleaded that they had re aso nable inv est ment

- backed

e x pectation s in purchas ing a nd imp rovi ng their properti es for use a s STRs b ased on
the existin g Zo ning Or dinance and on City employees ’ repre s e ntations that S TRs

w ere a llo w ed under the Zoning O r din ance. Cf. Sheffield , 14 0 S .W.3d at 677

– 78 (noting

t h at Shef fi eld ’ s expectations of being able to develop property wer e “ certainly
reasonable ” based on zo ning in place when Sheffield acquired th e pro p e rty a nd on

assuran ces rec eived from city officials in response to inquiries). T he City con tend s

t hat the H o m e owners ’ expectation s w ere not r easonabl e because the existing Zo ni ng
Or dinance did not allow STR s

— an argume nt we have rejected

. 27

27 The City also ar gues that the Home owners ’ investment

- backed expe ctations were n ot reasonabl e because it i s not bound by the s ta tements i ts employees made to the Home owners regardin g STR s . We nee d not address this argument b ecause we have determin ed th at the ex isting Zonin g Ordi nan ce allowed STRs

.34 T he City al s o argues that because only one o f th e Homeowners ori gin ally bought p rope rties for use as STRs, the other s had no investme nt

- backed expectati o n s when th ey pur chased the ir properti es. C ontrary to tha t argument, the e v i den ce re veal s

t hat four of t he five Ho me o wners (Hol t, the P erkin ses, Muns, a n d A

- 1 Commerc ial) purchased their p roper ties intend ing to use them as STRs. A nd as t he evi dence also
show s, al l the Homeow ners investe d significant sums to imp rove their properti es so that they could be used as STRs

. Because the existing Zoning Ordinance p ermitted STRs, we con clude that t h e evidence suffices to create a fact is sue about w he ther the
H om eo wners had reasonable invest ment

- backed expe ctati on s in purchas ing and
i mp r ov i n g t heir properties f o r use as STRs

. Although whether facts amo unt to a taking is ul timately a legal question, the
trial court must resolve dis puted fact issues ab ou t the extent o f th e gove rnmental
int rus ion on the p ropert y. See id. at 67 3

. H ere, fact issue s e xist rega rding the STR
Or dinance ’ s economic impa ct on the Ho me owners ’ prop e rt ies and the reasonable ness of the Home o wners ’ investment

- backed exp ectations. See Vi ll. o f Tiki Island , 463
S .W

. 3d at 578, 582 ( hol ding tha t plaint iff ade qu ate ly al le ged and pr esented ev idence

t hat ordinanc e pr ohibiting STRs met the Penn Central factors ). Accordingly , we concl ude and h old th at the trial court did not er r by denying the City ’ s amended jurisdictional pl ea atta ck ing the H om eowners ’ ta kings clai m. We thus o ve rrul e t he
C it y ’ s thir d issue

.35 V I I. The H o m eowners ’ Declaratory

- Judgment C l aims
In its fourth issu e, the Cit y asser t s that its gov ernmental immunity is not
wai ved for the Homeowners ’ thr ee declarato ry

- j udgmen t claims ( preemption,

re troacti vit y, and due

- cour se

- o f

- law ) b eca use t he Hom e o wners have n ot pleaded
fa ci ally valid claims

. T he d eclar atory

- jud gments act (“the Act” ) a llows a person whose “righ ts,

st atus, o r other legal r e lations ar e affe c ted by a

. . . municipal o rdi nance” to “ have
de termined any qu es tio n of const ru ction or val i d ity arisi ng under the

. . . ord i nance”
and to “obtain a de claration of rights, status, o r o ther l egal relations there under. ” T e x. Civ. Prac. & Re m . Code Ann . § 37

. 004 (a)

. Th e Act thus pro vi des a limi ted
governm ental

- immunity wa ive r for decl ar atory

- judgme n t claims a ga i nst municipalities

c hallenging an ordinan ce ’ s valid ity

. See City of New Brau n fe ls v. Carowest Land, Ltd. , 432
S .W.3d 5 01, 530 (Tex. A p p.

— Austin 2014, n o p et.) ; s e e also Tex. Civ. P ra c. & Rem.
Code Ann. § 37.006(b )

. Gov er nme ntal i mm un it y is waived w h en a part y s eeks a
decla ration t hat an ordin ance is i nv alid based on con stitutional groun ds

. City of N.
Richland Hills v. Home Tow n Urba n Part ner s Ltd. , 340 S.W.3 d 90 0, 9 11 (Tex. App.

— For t
W o rth 2011, no pet.) (op. on reh ’ g); s ee Tex. De p ’ t o

f Tran sp. v. S efzik , 35 5 S .W .3d 618,
622 & n. 3 (Tex. 2011 )

. But a c ity ’ s governmental immunity is waive d only to the

e xten t tha t a party has ple aded v i able or va lid const itutio n a l cl ai m s . See Hous

. Firefighter s ’ Rel ief & R et

. Fund v. City o f Ho uston , 579 S .W .3 d 792, 800 (T ex. A pp.

—36 H ou s t on [14 th Dis t. ] 2019, pet. deni ed ) (cit ing Klumb v. H ous . Mun . E mp s . P ens ion Sys. , 458 S.W.3d 1 , 8, 13, 14 (Tex. 20 15) )

. A
. Preem ption
T h e Home owner s reque sted a dec l ar ato ry judgment that the STR Ordina nce is

unc onstituti ona l b ec ause it is i mpliedly pre e m pted by Chap te r 156 of Texa s T ax Code
eit her alo ne o r in com bina tion w ith Chapter 92 of the T e x as Proper ty Code

. T he City
argues t h at because neither s t atute re fl ect s the leg i sl atu re ’ s clear a nd unmistaka b l e inten t t o pr eempt l ocal regu la tion of STRs , the Ho meowners ’ preemption claim is
f

acially invalid, and the t rial court th us erre d by denying th e City ’ s am e nded j u r is d ic tional plea as to t his claim

. T he City of G r a pev ine i s a h om e

- rule city, d eriv ing its pow e r f rom Arti c l e XI,
Section 5 of t h e Texas C onstitution. Se e Tex. Const. a rt. XI, § 5 ; S

. Crush e d C on c rete,
LLC v. Ci ty of Housto n , 3 98 S.W.3d 676, 678 (Tex. 2 013 ). As a ho me

- rule city, t he City
h as the f ull pow er o f self

- government an d l ooks to the l egislatur e not f or grants of
powe r but only f or limits on its po wers. See S. Cr us hed Concrete , 398 S

. W. 3d a t 678;
Da ll

. Me r ch. ’ s & C once ssionaire ’ s Ass ’ n v. City of Da llas , 852 S. W.2d 489, 49 0

– 9 1 (Te x.
1 993)

. But a hom e

- r ule city cannot e nact an ordinance containin g a p rovision
inc onsistent with Tex as ’ s constitu tion or general laws. S ee Tex. Const . art. X I , § 5(a) (mand ating t hat no ci ty o rdinance “s hall contain a n y pro visio n inc on sistent wi th th e Con st i t utio n of th e St ate , o r of the gener al l aws enacted by the Legi slatu re of this
S tate”); see also B CCA Appeal Gr p., Inc

. v. City of Ho u ston , 496 S.W .3d 1, 7 ( T ex . 2016);37 D al l. M erch. ’ s

, 852 S.W.2d at 49 0

– 91. A home

- ru le

- ci ty or dinan ce is thus

une n fo rceab le t o t he exte nt t hat it is inconsiste nt wi th a state statute pree mpti ng that
part icular subject mat ter. BCCA App eal Grp. , 496 S.W.3d at 7; Dall

. Merc h. ’ s , 8 5 2
S .W.2d at 491

.

“ A statutor y li mitation on l ocal laws m a y b e exp ress or im pl ied

. ” Ci ty o f L aredo

v . La redo Me rchs

. As s ’

n , 550 S.W.3d 586 , 5 93 (Tex. 2018)

. E ither way, the le gislature ’ s int ent t o impose a limitatio n must appear w ith “ unmistak able cla r i ty
. ” See i d. ; BCCA Appeal Gr p. , 496 S.W.3d at 7

. The legislature ’ s simply e nact ing a la w add re ssin g a
p ar ticular topic does n ot automa tically result in preem ption. See C ity of Richardson v. Responsibl e Dog Owners of Tex. , 7 94 S. W.2d 17, 19 (Tex. 1 99 0 ) ( “[T ]he mere fact that the legis l ature has enact ed a law addres si ng a sub ject do es n ot mean t hat t he s ubj ec t

matter is completely preempte d.”); City of Brookside Vill. v. Co meau , 633 S.W.2d 7 90, 796 (Tex. 1982 ) (stati ng that “[ t]he entry of the state in t o a fi eld of legislation

. . . doe s

n ot automatica lly pr eempt tha t fie ld fr om ci ty regul a tion ” )

. L ocal r egula ti on is

“ acceptable” if it is “ ancillary to a nd in harmo ny with the general scope and purpose of th e state ena ctment.” Bro oks ide Vill. , 633 S.W .2d a t 796

. Here, the Hom e o wners ple a d ed th at t he STR Ordina nce

— whic h doe sn ’ t just

re gula te STRs b ut ban s t hem a lt ogether

— is implicitly preempt ed by Chapter 1 5 6 of
the Tax Code and C hapter 9 2 of the Property Co de

. The Homeown ers alleged that ( 1) beca u se STRs are subjec t to mandatory state and lo c al hotel

- o ccupa nc y t ax es , see Te x. Tax Code A nn . § § 156 .00 1(b), .05 1(a)

. 101 , 351.0 0 1( 4) , .002 (a) , ( c) , and38 (2) because STRs are no t ba nned o r r estr icted by la ndlord

– tenant law , see Tex. P rop. Code Ann. § § 92

. 0 01 , .002, .010, .152, th e Tax Co de

— ei ther a l on e or in com binati on wi th th e Pro pe rty Cod e

— i mp l i citly preem pt s the S TR Or dinance. In sh ort , the
Homeowners co ntend that the Tax C ode an d Propert y Code tacitly pr e e mpt the STR
Or dinance bec au se al l ow i ng cities to b a n STR s undermin es the legisl a tu re ’ s inte nt to
ge ner at e tax r evenue f rom t he m and is inconsistent wi th the legi s latu re ’ s “ evide n t des ire to all ow such rentals witho ut restriction

. ”
But the Homeow ners did not p oi nt to any provisi o n in eith er t he T ax Code or the Property Code that implies th at th e le g islat ur e me ant to l i mit or forbid local
regu lati ons banning STRs. See L ower Col o . River Aut h

. v. City of San Mar cos , 523 S.W.2 d 641, 645 (Tex. 197 5) (op. on reh ’ g) (stating that a s ta tutory li mitation o n local laws will
not be im plie d unless the gen eral la w ’ s p ro vis i ons a re “ c l ear and comp e ll i ng to that
end ” (quot ing Gla s s v. Smi th , 244 S.W. 2 d 6 45, 649 (Tex. 1 951) ) ) . The statut ory
prov i sions th at the Homeowners have cite d do not show with “ unmi st akable c larity ”
that the legislature in tended to lim it l ocal reg ula ti on o f ST R s . I d. ( s tati ng th a t t he legislature ’ s inten tion t o lim i t the power of home

- ru le cit ies by general law must

“ appear w ith unmi st ak able clarity ” ( quoting City of Sweet water v. Ge ron , 380 S .W.2d 550,
55 2 (T ex. 1 964)) )

. W i thout such a n indication , t he Ho m eown ers h av e faile d to p lead a
vi able preemptio n claim

. And without such le gislativ e inten t , the Home owner s ’ pleadings aff irmatively demonstrate incurable d efe cts in juri sdiction th at can not b e39 fixed by rep leading

. See Mira nda , 133 S.W .3d at 22 6

– 2 7. We th us s usta in th is p art o f
the City ’ s f ourth issue

. B
. Arti cle I , Section 16 of th e T exas Constitution (Re troacti v ity )
T he Hom e ow ners also want ed a declaration that the STR Or d inance is

un const ituti onally re troactive beca use it ta kes away the ir “fu nda mental a nd s ettl ed”

v es ted pro perty right s under both the Zo ning Ordi nan ce and Texas common law to lease their propert y on a short

- ter m basis. 28 As part of its four th is sue, the City argues that because the Home owners have n o veste d ri ght to u se th ei r pro pe rties as STR s,

t heir re troac ti vity claim is facially inv alid, an d the trial court thu s erred b y denying the
C ity ’ s amended jurisdic tional plea as to th is cl aim. Article I, Se ction 16 of the T e xas C onstitu tion p rohibits th e c reati on of

r etroact ive l a ws. Se e Tex. Co nst . ar t. I, § 16 (“ No bill of attainder, ex pos t facto law,

retroa ctive law, or any law impa iring the obligation of contr acts, sh all b e made. ”)

. “ A

ret roactive law i s one that extends to m atters that occurred i n the past
. ” Te ne t Hosps

.

28 In supp ort o f their retro activity claim, th e Homeowners pl eaded that “ t he prop erty right owne d by Plaintiffs was a vested property right. By taking awa y this fundamental and s ettled propert y r ight, th e G rapev ine STR B an oper ates re troacti v ely

. ” Earlier i n t heir ple ading , the Homeowners a llege d that “ sho r t

- term renting of a h ome as allowed un der prior l aw ” is a vested right a n d that leasing is a
“ basic, s a crosan ct property right ” under the Texas common law

. Con st ru i ng the H ome o w ne r s ’ plead i n gs libera lly, as we must, we con clude that they are claiming a settle d rig ht under b ot h the Zoning Or di nance and Texas common law

. As we wi ll explain, courts have essen tially s crapped the “ im possible ” task of “ defin [ing] a ve sted right ” i n th e r e troactivi t y context , Robinson v. Crown Cork & Seal Co. , 335 S.W.3d 126, 1 42 (Tex. 2010 ) , and look instead to whether a right is “ settled , ” Zaatari , 6 15 S.W.3d at 190

.40 Ltd

. v . Ri vera , 445 S. W.3d 6 98, 707 (Tex. 2014 ) ; see S u baru of Am. , Inc. v . Dav id M cDavid
N i ssan, I n c. , 84 S.W. 3d 212, 21 9 (Tex. 2002) (defin ing a r etroac tive la w as “ a l aw that

acts on things which are past ” ) ; R.R. Com m ’ n of Tex. v . P end O rei ll

e Oil & G as Co

. , 817
S.W .2d 36 , 4 7 (Tex. 1991) ( “ A retroactive law is on e that affect s act s or r i ghts which

accr ued before it became effective

. ” )

. Bu t n o t all retroac t ive laws are unconsti tu tional

. See Robinson , 335 S. W.3d at 1 39 ( stat in g t hat “ mere retroa ct ivity ” is insuffici ent to inval id at e a s tatute)

. N o br i ght

- line te st ex ists for det ermin ing whether a law is unco nstitution ally

re troactiv e. Id. at 14 5. T o r e solve that issu e , a court consider s t hree fa ct ors in l ight of
the pr oh i bit io n ’ s obje ct ive s of protect ing re asonable, se ttle d expe ctat ions an d of preventing legisla t ive a buses: (1) “ the n a ture and str ength of the public inte rest served
b y the statut e as ev i denced by the L egislature ’ s factua l findings ;” (2 ) “th e na ture of the
p rio r ri g h t im pa ire d by the sta tut e;” and (3) “ th e ex tent o f th e impai rment.” Id.
T he City a s serts that the ST R O r d i nance is not un constitutionally retr oactive
becau se t he Hom eo wners do not h ave a ves ted right to use th eir proper ti es as ST Rs

. T h e C it y t hus c on ten ds that the Hom eowners have “ p lead ed no vest ed prop erty right
that has been impa ired or taken away by t he [S TR] Ord inance because they h ave no ab so lute right to use t h eir p ro p erty fo r a particul ar purp ose

— such a s an STR. ” B u t

t h e Te x a s S uprem e Cou rt has “ expr e ss ly rejected th e ve sted

- right s tes t , explain in g that

‘ [

w]hat const i tutes an impairm ent of vested r ights is too much in th e eye of the
beholder to serve a s a t est for un constitutional retr oactivity , ’ ” and anno unced that41 c our t s sh ou ld inste a d as sess the thr e e factors liste d abo ve. In re Occi den tal Chem. Co rp. , 561 S.W

. 3d 1 46, 161 (Tex. 2018 ) (orig. proce eding ) (quo ting Robinson , 335 S.W.3d at
143 ) ; see Union Carbi de Cor p. v . Synatzske , 438 S. W.3d 39, 5 6 (Tex. 20 14) ( explain ing that
i n R obins o n , t he supreme c o u rt “ determined that classifyi ng a ri ght or in te rest as

‘ vest e d ’ i n o rder to d et ermi ne whether it has b een retroa ctively d i minished or impaired in v iolat i on of the c onst itution has not yie lded an ef f i cient an d predictabl e f

r amew or k ” )

. W he n an a lyzing “ the n a tur e of the pri or r ight [impa ired b y the stat ute under the s e cond fa ctor ] , we co nsi der not whethe r the impaired right was ‘ ves ted, ’ b ut

t he e xtent to wh i c h th at rig ht w as ‘ sett led

. ’ ” Zaa t ari , 615 S .W.3d at 1 90 ( c iting
R obinson , 3 35 S.W. 3 d at 1 4 2

– 4 3 , 1 4 7 , 1 4 9 ) ; see , e.g. , Robinson , 3 35 S.W .3d at 147, 148

– 49 ( concluding that plai ntiff s had a settled e xp ec tat ion that their right to re cover on their already

- filed common

- law cla ims would not be a l tered by s ubsequ e nt leg i s lation and
noti ng “ [ t]h e presu mption is that a retroactive law is unconstitut ional withou t a compelling justi fication that does not g reatl y ups et settle d expectations ” ). Impli cit in t he Texas Supreme Cour t ’ s re jec t ion of the vest ed

- righ ts te st is th a t

a s ettle d right i s no t eq ui valen t to a vested r ight

. H ere, t he Homeowners pleade d that
the S TR Ordi nance impair e d t heir set t led property ri gh t s un der the co m mon law and
under the Zoning Ordinance to lease the ir pro per ti es on a short

- term ba sis : “ By
taki ng a way thi s fundame nt al and s ettle d proper ty righ t, the Grap evine STR Ban
operate s retroact ive ly. ” T he City d o es not contend t h at the Homeowner s hav e fail ed to plea d set tled ri ght s or that th e rights th ey have asserted are no t settle d

. Becaus e the42 H omeown ers ’ ret ro a c t i vity claim hinges on settled r ather than vest ed rights and the City h as not ar gue d th at the Hom e owners ’ pl eaded r ights are not set tled, we conclude
that the H ome owners have p leaded a faci al ly valid retroactivit y claim

. See Zaatari , 615
S.W.3 d at 191 ( c o n cl udi ng , in an alyzing retr o activity claim, that property owne rs h ad a

“ sett led inte rest ” in their r ight to leas e the ir properties sh ort t erm and that the issue is

not abou t the “ proper ty ow n ers ’ righ t to use the ir property in a certain way , ” b u t about t h e ow ner s ’ “ retain ing t he ir wel l

- se t tled right to lease their pro perty ” )

. W e thus

ov e r rule this p art of t he C i ty ’ s fourth issue.
C
. Art icle I , Section 1 9 of the T exas Constitution ( Due Co urse of Law )
Th e Ho m eowners further s ought a declaration that the STR O r d i nance violate s their s ubstantive

- due

- co urse

- of

- law right s un de r Artic l e 1, Sec ti o n 19 of the Texas
C ons t i tution. See Tex. Co nst. a rt. I , § 19 (“ No citizen of this State s ha ll be deprived o f life, l iberty, pr operty, privileges or immunities, or in an y manner disfra n c hised, except by the due course of t he l aw of th e land. ” )

. S pec i ficall y , the H ome o wners alleg e that the City ’ s STR Ordin ance is unconstitutional because (1 ) the STR Ord inance ’ s
pu r pose is not rat io nal ly related to a legitimate gove rnm ental in terest and ( 2 ) when
considered as a whole, the STR O rd inance ’ s real

- wor l d eff ect as a ppl ied to t h em could not arguably be rationally r elate d to, or is so burdensome as to be o ppressive i n lig ht of, the go ver nmental interest. See Pate l v

. Tex

. Dep ’ t o

f Lice nsing & Regu lation , 469
S.W.3d 69, 87 (T ex. 2015).43 But b ef o r e an y subst an ti ve

- d ue

- p r o c ess rights attach, a p arty must have a liberty o r pro perty interest that is entitled to const itutional pr ote ction. Klum b , 458
S. W .3d at 1 5

. In the su bsta n tive

- due

- proces s conte xt, t his con stitu ti on ally protected right mus t be a vested right

. I d. A v ested right “ has so me def initive , ra ther than merely
po tenti al exist e nce , ” C ity of La Marque v. Braskey , 216 S .W.3d 861, 86 4 (Tex . App.

— H o uston [ 1 st Dist .] 2 007 , pe t . denied ) (quoting Tex. S. Univ. v. State St. Bank & Tr.
Co

. , 212 S.W.3d 893 , 903 (Tex. App.

— Houston [1st Dist.] 2007, pet. denied ) ( op . on reh ’ g ) ) , a nd is “ somethi ng more th a n a mere expectancy b as ed u po n an antic i pated

con tinuan ce of an ex isting l aw , ” Klumb , 458 S

. W.3d at 15 (quot ing City of Dalla s v. Tr ammell , 101 S.W.2d 1009, 10 1 4 ( Te x. 1937)). T he Cit y ass er t s that the Ho meowners have n o vested rig ht to u se their pr ope rti es as S TRs

. It conten d s that the
Homeo wn ers ’ d ue

- cour se

- of

- law cla im is thus faci ally inv alid an d that t he tr ial court
therefore e rre d by denying the City ’ s amen d e d jurisdictional ple a as to th is claim.
H e re, the H o meo wners pleaded that “ T ex a s comm o n law en s hrines leasing as a bas ic, sacr osanc t property r ight ” and that the Z o ning Ordinan ce had allowe d STR s . They also plea d ed that the STR O r dinance will cau se t hem t o lose the mone y they
investe d in purch a si n g and imp r oving th eir S T Rs

. In sup po rt of th ei r due

- co urse

- of

law claim, t he Ho meow n ers ple aded that “ [ p]roperty owners in th is state have
histori c, basic protection for their l e a sing rights ” and tha t the H omeowners hav e a

“ right to rent ou t t h eir homes fo r any par ticula r dura t ion. ” T hey f urthe r plea ded tha t the STR Ordinanc e denies them rental income from their S TRs an d denies their “ own44 p roperty use and e njoy ment ” beca u s e the STR Ordina nce would f orce t hem to “ leave their p roperties v aca n t whe n th ey are n ot usi n g the m . ” Cons truing the Hom eo wners ’
p leading s liberall y in t he ir fa vor, we co nclude tha t they have p l eaded that they have a vested right to use their prop e r ties as STRs und er b oth t he Zoning Ord inance and the

c ommon law. 29
We d isag ree with the H ome o w n ers t hat they had such a vested r ight unde r the
Z o ni ng Ordinance

. “ [ P ] r operty owner s do no t acqui re a co nstitutionally p ro tected
vested r ight in prope rty use s onc e commence d or in zo nin g clas sificati on s on ce mad e. ” Cit y of Univ. Pa r k v . Benne rs , 485 S.W.2 d 773, 778 ( T ex. 19 72 ) ; see , e.g. , M b o go v. Ci ty of Dallas , No. 05

- 17

- 0 0 879

- CV , 2018 WL 319 8398, a t * 8 (T ex. App.

— Dallas Jun e 29, 2018 , p e t . denied) ( mem. op. on r eh ’ g); CBS Outdoor , 2013 WL 5 30 27 13, at * 8

. A nd a s noted, a v es ted ri ght i s “ s om ething more t han a mere e x pectancy based upon

a n an ticipated continuan ce of an exist i ng law. ” K lu

mb , 458 S.W.3d at 15 . Thu s, although the Homeowners h a ve a vested righ t i n thei r properties, 30 they do no t ha ve a

29 O n appeal, the Homeowners a ss ert they have a f un damen ta l ri ght t o l e ase their pr opert ies that en comp ass e s t h e right to le a se their pr oper ties on a sh ort

- term basis

. The y al so state that their due

- course

- of

- law claim “ stems fro m a broader , more fund am enta l vested rig ht , ” im p ly ing that they are not claiming a vested r ight u n der t he Zoning O rd i n ance. But constru ing the H ome owner s ’ p leadings liberally in thei r favor,
we c onclude that they are also claiming a veste d right under the Zoning Ordi na nc e .
30 “ A person ’ s pro perty i n ter ests incl ude actual ownership of re al estate, ch a tt e l s, and mo n ey . ” Strat ton , 8 S.W .3d at 29

.45 veste d right un der the Zoni ng Or d i n ance t o us e th em as STRs

. See id. ; B e nners , 4 85
S.W.2d at 778

. Neverth eless, a lthough the Homeow ners do not h ave a vested ri ght aris ing

u nder t he Zoning Ordinance to u se thei r proper ties as ST R s , we conclude that the y have a f u nda mental lea s ing right arising fro m thei r prop e rty o wnershi p. P r ivate property ownersh i p is a fundamenta l right. Hearts Bluf f

, 381 S.W .3 d at 47 6 (ci ti n g Sev erance v. Pa tter so n , 370 S. W.3d 705 , 709 (Tex. 2 012) (op. on reh ’ g) ) ; Seve rance , 370 S.W.3d at 709 ( “ Private prope rty rights ha ve been de scribed ‘ as fun damen tal , nat ural,
inherent , inal i enabl e, no t derive d fr om the legisl ature [ ,] a nd a s pr e

- ex isting e ven constitu ti ons. ’ ” (quoting Eggeme yer v. Egge meyer , 5 5 4 S.W.2d 137 , 140 (Tex. 1977 ) )).
P roperty ownership includes th e r i ght to le ase to o th ers . Se e C al

cas ieu L umbe r Co. v.
Harris , 1 3 S.W. 453, 454 (Tex. 1890 ) ( “The own ers hip of la nd, when th e es tate is a fee,
carrie s with it t he right to u se the land in any manner not h u rt fu l to o thers; and the right to lease it to othe rs, and there fore der iv e profi t, is an inci dent of such ownership .” ) ; se e als o Terrace , 26 3 U.S. at 215, 44 S. Ct

. at 17

– 1 8 (not i ng that “e ssential

attr ibutes of p roperty ” include “th e r ig h t to use, lease [,] and dispose of it for lawf ul
p urposes ” )

. The ri gh t to le ase i s a stic k wi t h in a proper ty ow ner ’ s metaph orical bun dle
of rights. See Emily M. Speier, Co mm en t, E mbra ci ng Airbnb: H ow Cities Can Champ ion
Private Pro perty R i ghts Without Comp r omisi ng the Health and W elfar e of the Commun i ty , 44 Pepp. L. Rev. 38 7 , 3 9 5

– 97 (2017 ).46 Given the nature of real

- pr operty right s, we co nclude th at the Homeowners
hav e a ves ted r ight to le ase their p rop erties and that this rig ht is sufficient t o supp ort a vi abl e due

- course

- of law claim. Cf. Zaatari , 615 S. W.3 d at 191 ( co n cludi ng that, in

an alyzing retr o activity claim, p roperty owne rs h ad a “ sett led interest ” in their r ight to
le as e the ir pr operties sh ort term and that the issue is not abou t the “ property ow n ers ’ right to use the ir property in a certain way , ” b u t about t he owner s “ retain ing t heir
wel l

- se t tled righ t to lea se their pro perty ” ) ; Vill

. o f Tiki Island , 4 6 3 S.W.3d at 587 ( hold ing th at , in anal y zing w h ether an STR owner had proved an i r repar a ble injury t o

a v e ste d r ight necessary to s upport an order tempora ri ly e nj oi ning an or dinan ce bann ing STRs , ST R ow ne r had a na rr ow vested ri ght to con tinue o perating existing
STR after city pass ed or dinance ban ning STR s but grandfathering in existing STRs )

. Th e Homeow ners h ave t hus plea d ed a viable due

- course

- of

- l aw clai m , and we
overrule t his p ar t of the City ’ s f o urth issue.
V I I I
. The Homeo wn ers ’ Injun ctive

- R elief Request
The H om e owne rs ple ad ed f or temp orar y and p ermanent injunctive relief against the Ci t y , asking th e tri a l cou rt to e n join the City from enforcing the ST R
Ordinan c e. In the City ’ s f ifth issue, the Ci ty a rgues that i ts immunity has n ot be en waived as to the Homeowne rs ’ re quests for i njunct ive r elief because (1) the
Home owners hav e not pleaded a va l id ca use of actio n and (2) the City has i mmunity
from cla i ms for inj unctive reli ef based on a l legations th at g overnment of ficials are
viola ting the law or excee ding their p owers under the la w . See City of El Pa so v. Heinrich ,47 28 4 S.W.3d 366, 3 73 ( Tex. 2009) (concluding that suits complai ning of ul tra v ir es acts

ca nnot be brou ght agai nst a governmental uni t but mus t b e brought against the allegedly responsible go vern ment actor in h is offici al capacity) ; see also Tex. D ep ’ t of I ns.

v . Reco nveya nce S e rvs., Inc. , 306 S.W.3d 256, 258

– 59 (Tex. 20 10) ( concluding that when a plai ntiff ’ s claim s ar e sub stantivel y ul tra vires cl aims , they must b e brought agai nst th e appropriate government official in his o ffi cial c apacity).
G overnmental immunity d oes not bar suit s chal l enging an ordinance ’ s constitutiona lity an d seeking e quitable relief

. See Patel , 4 69 S

. W.3d a t 75

– 76

. Fi r st, as disc ussed above, the Home owner s have pleaded valid cla ims challenging the

cons tit utiona lity of the STR Ordinance

. Secon d, contrary t o the City ’ s assertion, the
Hom e ow ners have not allege d that any City offi cial s a re vi olating the l aw or ex ceedi ng

t heir p owers under the law nor are t he Homeowners ’ c laims subst antively u ltra vires
cla im s . See id. at 77. ( “ [ B]eca use the [p laintiffs] c h allenge th e val i dity of the

cosm etology statutes and regu lations , rathe r t han compla ining t hat o fficials act e d illegally o r fa iled to act, the ultra vires ex ception does not app ly. ” ). The C i ty is thus
not imm une fr om the Ho me owner s ’ requests for in j unct iv e relief. S ee id

. We o ver rule the City ’ s fifth issue.
IX
. Con clus ion
Havin g determin ed that the Homeowne rs f a iled to plead a f acially vali d
preemp tion clai m, we reverse the part of the tri al court ’ s order den ying t he City ’ s48 amended plea to the jur is dict ion as to tha t cla i m and render judgment dismissin g i t.
We a ffirm t h e re maind er of the trial c ourt ’ s orde r.

/s/ Elizabeth Kerr Elizabeth Ker r J u stice
Deliv er ed: August 5, 2021