Houston Residents Sue to Halt Airbnb-Style Rental Construction

A judge granted a temporary injunction to pause the project while the lawsuit proceeds to trial.

Mar. 11, 2026 at 8:26pm

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Residents of Houston's Third Ward neighborhood have successfully sued to halt construction of what they claim is an illegal Airbnb-style rental property in their community. A state district judge issued a temporary injunction stopping work on the project while the lawsuit continues toward a trial in May.

Why it matters

The case highlights the tension between development pressures and neighborhood preservation in Houston, a city without formal zoning laws. Residents are using deed restrictions to try to maintain the character of their historic community, which is seeing an influx of short-term rental properties that some say disrupt the residential fabric.

The details

Neighbors in the University Woods subdivision filed the lawsuit after spotting construction crews building what appeared to be a separate two-story home behind an existing property. They argued this violated deed restrictions allowing only one house per lot. The developer, KGM Properties HTX, claimed the new structure was connected to the original home and therefore complied with the rules.

  • In July 2025, residents first noticed construction crews beginning work on the property.
  • In October 2024, the city sued KGM Properties HTX for violating deed restrictions in a nearby neighborhood.
  • In September 2025, a court issued a permanent injunction ordering KGM Properties HTX to comply with deed restrictions in that case.

The players

Samantha Townsend

A resident of the Third Ward neighborhood who spotted the construction project and helped organize the lawsuit against the developer.

Marc Newsome

A resident of University Woods who has lived in the neighborhood since 2001 and is a plaintiff in the lawsuit against the developer.

KGM Properties HTX

The development company that owns the property where the disputed construction is taking place.

Matt Morgan

The owner of KGM Properties HTX, who declined to comment on the lawsuit.

Shahab Hashimi

The person listed as the "owner/occupant" on city building permits for the property, who could not be reached for comment.

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What they’re saying

“Whenever someone comes in and builds structures that are obviously about making money and siphoning the energy of the area, we have something to say about that.”

— Marc Newsome, Resident (Houston Chronicle)

“To have to pay out of pocket to hire an attorney to make someone stop doing what the city is supposed to stop them from doing is unacceptable.”

— Samantha Townsend, Resident (Houston Chronicle)

What’s next

The judge in the case will decide in May whether to issue a permanent injunction halting the construction project.

The takeaway

This case highlights the challenges Houston faces in balancing development pressures and preserving the character of its historic neighborhoods without formal zoning laws. Residents are using deed restrictions as a tool to try to maintain control over their communities, but the outcome could set an important precedent for how such disputes are resolved.