In front of a packed crowd at City Hall Thursday night, Austin’s City Council passed the contentious ordinance which will regulate commercial short-term residential rentals, but not without amendments.

Just after 9 p.m., council voted 5-2 to approve the ordinance with Laura Morrison and Kathie Tovo dissenting.

Initially, the ordinance would have limited short-term rentals to three percent of homes in a certain zip code, but an amendment made Thursday has the ordinance using census tracts instead of zip codes. Census tracts are much smaller than zip codes, something council members say will keep short-term rentals from clustering.

Those against the idea stood out with red shirts Thursday night, voicing their concerns about the impact commercial vacation homes could have on their neighborhoods. They worry investors will target neighborhoods just south of Lady Bird Lake that have small elementary schools with already low enrollment—forcing teacher layoffs or school closures.

"As whole blocks start to domino, that can create dead zones within a neighborhood," opponent Susan Moffat said.

Austin-based HomeAway.com serves as the go-to site for anyone seeking to rent, or rent out, a home. Officials with the HomeAway have told YNN that the resolution would simply provide those seeking to visit the Capital City options and would have little, if any, negative effects.

"These homes, these owners, this use does blend within our neighborhoods and can go unnoticed," short-term rental support Cheri Fisher said.

The ordinance will go into effect on Oct. 1.