Gretchen Greer for the Rivard Report
With success comes regulation and Airbnb, the wildly popular “sharing economy” website that allows users to rent out portions of their home to adventuresome travelers, has had more than its share of success. Recently valued at $13 billion, the company has more than 340 listings in San Antonio alone.
(Read more about local Airbnb operation in Part One of this series: The Rise of Airbnb in San Antonio.)
Airbnb’s success hasn’t escaped the notice of government officials, in Texas and elsewhere. Concerns about health, safety, and taxation have led some cities to begin efforts to regulate residential rentals.
In 2014, New York State attorney general Eric Schneiderman issued a report stating the 72% of Airbnb listings in New York City were violating hotel and zoning laws. In 2013, for reasons either arbitrary or unknown, New York officials fined one Airbnb host $2,400 for violating a 2011 law passed to prevent unregistered hotels operations.
Airbnb led a fervent fight on behalf of the host against the city, arguing that the law was created to prevent people buying up properties for the explicit purpose of illegal short-term rentals, while the host, like majority of Airbnb-ers, was renting out a room in his primary residence. “They are just average New Yorkers trying to make ends meet,” Airbnb said, “not illegal hotels.”
In February, San Francisco passed the so-called “Airbnb law,” which attempted to impose mandatory licensing and to prevent properties being used as full-time Airbnb rentals. San Francisco, like New York, said Airbnb operations were contributing to housing shortages in the city.
Officials in San Francisco recently acknowledged that the city’s new law is difficult, if not impossible, to enforce. Unless Airbnb releases information about its users, they said, there is no way to track licensing or usage. “The truth is, the Airbnb law was more about politics than policy,” the San Francisco Chronicle stated in one editorial.
In 2014, Austin introduced an ordinance that requires short-term rental owners to obtain a license from the city. There is a $285 application fee, plus an annual renewal fee, and owners must submit proof of property insurance and payment of the city’s Hotel Occupancy Tax. They also must maintain a Certificate of Occupancy or proof of a certified inspection. The city intends to limit the number of homes that can be rented in a given building or neighborhood, and has placed a cap on licenses for properties not occupied by the owner.
The Airbnb website offers guidance on existing city regulations nationwide, including those in Austin.
Changes are coming to Texas beyond Austin. Cassandra Matej, executive director of the San Antonio Convention and Visitors Bureau, said that the Bureau is, of course, aware of Airbnb.
“We support anything that makes the San Antonio vacation experience safe and unforgettable,” she said, acknowledging that for some of the millions of visitors to the city each year, “that might mean researching alternative lodging, within legal boundaries.”
That final clause is a significant one. Legal boundaries may be changing in the near future. Scott Joslove, President and CEO of the Texas Hotel and Lodging Association, said his organization is not concerned with people who rent out rooms in their primary residence, but does oppose those who buy or rent properties specifically for the purpose of leasing them to overnight guests. Austin’s measures should serve as a model ordinance, he said, adding that the Association is working with other major cities to introduce registration, licensing, and occupancy tax to residential rentals.
In February, Councilmember Ron Nirenberg (D8) said “public safety” must be weighed against “letting the free market work,” but health and safety concerns seem little more than a front for the issue of taxation.
To date, Airbnb rentals have not been subject to San Antonio’s 6% Hotel Occupancy Tax. Proposed legislation could change that. House Bill 1792, authored by state Rep. Drew Springer (R-Muenster), seeks to legally define and regulate residential rentals. The bill expands the definition of “commercial lodging establishment,” which already includes hotels, motels, and inns, to encompass residential short-term rental units.
The proposed legislation would “characterize and treat a residential short-term rental unit in the same manner as a hotel for purposes of consumer protection, public health and human safety, taxation, licensing, and zoning.”
That means at least some Airbnb operators in Texas would have to adhere to same regulations as hotels, including requirements for the submission of water samples, regulation of appliances, and sanitation.
The bill’s wording is vague, and might exempt individuals who only rent our rooms of their primary residence, where the host is generally present for the duration of the stay. Individuals operating free-standing Airbnb venues, however, would not be exempt.
Sharon Sander, a local Airbnb host, opposes any new regulation. She feels that it’s her right to do what she wants to with her own house as long as she pays her taxes on the property and income she earns.
A 2012 case study conducted by HR&A Advisors measured the financial effect of “collaborative consumption” in San Francisco. The study’s authors found that travelers using Airbnb were more likely to spend money on local neighborhoods and independent businesses. “I like knowing my space is getting used by people who are genuinely interested in the city,” one host said.
The Garcias, who live on San Antonio’s Eastside, said their neighbors appreciated the Airbnb presence, and felt that it was contributing to the positive transition of the area. Another local host said his neighborhood, within walking distance of Southtown and the River Walk, is what guests find so appealing. Sander said having people coming and going at unexpected hours has reduced crime on her street. The Diazes, who I wrote about in part one of this series, said they are investing in the future of another transitioning neighborhood.
I spent one night at a highly rated converted garage apartment in Lavaca where my Airbnb host said the Southtown area attracts a very different demographic than the tourists and conventioneers who are the backbone of the downtown hotel industry. She believes Airbnb is adding to the city’s economy.
“If there was no Airbnb, visitors who currently use it wouldn’t turn to hotels—they simply wouldn’t come,” she said.
One of the best aspects of hosting is changing travelers’ minds about San Antonio by introducing them to a different side of the city. “I’m overwhelmed with how surprised people are by how wonderful San Antonio is. It’s refreshed my own view of the city.”
With just over 0.0002% of the San Antonio population hosting via Airbnb, the phenomenon is hardly widespread. But these sharing economies are fundamentally altering the way we move, travel, and interact with the world. That change, for some, represents a threat to the status quo, and public officials do worry that innovation also can bring public safety challenges and questions of regulatory fairness that must be addressed, however unpopular with some.
What can’t be argued is that Airbnb is enabling and encouraging local, personal, and authentic experiences that have a positive cultural and economic impact on the city, and show visitors a different side of San Antonio. Airbnb helps visitors live more like locals. The trick will be making sure that any efforts to regulate Airbnb do no drive it out of the market or give the city the kind of black eye that came with the rideshare debacle.