San Antonio’s City Council got its first collective look at rules proposed for short-term rentals Wednesday. For the most part, Council members did not like what they saw.

Mayor Ron Nirenberg directed City staff to continue to collect feedback and research other policy options before presenting to the Council’s five-member Governance Committee and coming back to the full Council.

As the City’s experience with rideshare proves, it “takes time and care to find the right balance,” Nirenberg said. “It’s going to be a little bit of a policy slog between now and then.”

The proposed ordinance compiled by City staff and a stakeholder task force to regulate home and room rental platforms like Airbnb, Home Away, VRBO, and others would establish fees and inspections for rental units, make it more difficult to start a rental at which the owner does not live, and “grandfather” in some established units.

Implementing and enforcing the proposal would require hiring seven more City employees.

After an estimated 700-800 hours of meetings between staff and the task force, Development Services Department Director Michael Shannon told Council members they arrived at what staff thought was a fair compromise between the interests of preserving housing stock and the emerging local homesharing industry. There are more than 2,000 active Airbnb units in San Antonio, Shannon said, and likely hundreds more that use other platforms.

There is a wide variety of opinions about how San Antonio should handle regulations – including no regulations, Shannon said. Some cities have less onerous rules than the ones proposed here and some have more restrictive rules, he said, but the key lies in having  “something that’s balanced. … This is our best attempt to get as close to consensus as possible.”

Click here to download Shannon’s presentation to Council.

Director of the DSD Michael Shannon.
Director of the Development Services Department Michael Shannon Credit: Scott Ball / Rivard Report

But several Council members pointed out that what works in one part of the city may not apply in others, and the property rights of both property owners (or short-term rental operators) and their neighbors have to be more balanced. Councilman Roberto Treviño (D1), whose downtown district hosts the most short-term rentals in the city, will work with City staff and his colleagues to find a compromise.

“We hear about this every day,” Treviño said, adding later that he is “very hopeful that we can get past these hurdles.”

In neglected parts of town like the Westside where communities struggle with vacant lots and homes, a short-term rental could be seen as a positive investment – a welcome improvement to the district, Councilwoman Shirley Gonzales (D5) said. She suggested that the $200 registration fee and $100 three-year renewal fee could be prohibitive for lower-income property owners who want to supplement incomes by renting out rooms, garage apartments, or so-called “granny flats.”

Giving discounts to legacy home owners, senior citizens, and others susceptible to increasing property appraisals could help incentivize neighborhood investment, said Gonzales, who represents much of the Westside. Councilman Cruz Shaw (D2), who represents the Eastside, agreed and said he has seen the impact firsthand in the near-Eastside historic Dignowity Hill.

“It’s really turning around communities,” Shaw said. “A lot of these homes were vacant lots or distressed homes.”

But there is “still too much up in the air” for her to support the ordinance as is, Gonzales said.

Other neighborhoods, especially historic districts such as Lavaca and King William in Southtown, have what some have called an overabundance of short-term rentals – occupying nearly all homes on some street blocks. Several neighborhood associations have called for more restrictive rules than those found in the proposal, especially for non-owner-occupied (or “Type 2”) units.

Legally, historic districts’ overlays cannot limit how homes are used, Shannon said, but the City might be able to create some other kind of overlay to establish areas with increased restrictions or incentives for short-term rentals.

The proposed ordinance has been reviewed and approved by the Board of Adjustment, Planning Commission, and Zoning Commission, with amendments.

“[Short-term rentals] allow you to pretend you’re a local,” Councilwoman Ana Sandoval (D7) said, but too many in one neighborhood can start to feel “like a hotel or a theme park.”

Sandoval joined Councilmen Rey Saldaña (D4) and Greg Brockhouse (D6) in expressing interest in finding a solution that wouldn’t “blanket” the city with one set of rules for diverse neighborhood challenges. The legalities of that will be part of Shannon’s and his staff’s research in the coming weeks – and possibly months – before returning to City Council.

“Not all Council districts are created equal” when it comes to short-term rentals, Saldaña said, adding that he will lean heavily on advice from Treviño, who already has his own list of proposed amendments. Those include changing the way density of short-term rentals is measured, how permits are awarded to properties (he would like to see them awarded per unit), prohibiting rentals from being used as event spaces, and forbidding short-term rentals in City-incentivized housing projects.

“We need more time to stew on this so we can fully bake it,” Saldaña said.

The bedroom in Jen Morey's Airbnb in Southtown.
A bedroom in an Airbnb in Southtown. Credit: Scott Ball / Rivard Report

In the meantime, short-term rentals can and will continue to operate and likely proliferate throughout the city – but most operators aren’t paying the required hotel occupancy tax. Airbnb and other platforms automatically pay state taxes, but there is no mechanism for registering short-term rentals, so the local tax is hard to collect, Shannon said.

Brockhouse, who operates a non-owner-occupied short term rental in New Orleans, suggested all existing units be “grandfathered in.” The proposed ordinance would require operators who are not paying the local hotel occupancy tax to go through the application process.

He cautioned against overreaching with “onerous regulations” that could end up in court, as Austin’s short-term rental ordinance has.

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Councilman Manny Pelaez (D8) delivered the harshest critique of the proposed ordinance.

“I worry about us getting involved in people’s property rights,” Pelaez said, noting that most neighborhoods in his district already prohibit short-term rentals via homeowner associations and other City ordinances regarding noise, trash, and parking.

“What the heck are we solving?” he said. “I can’t think of anything less Texan than telling people who they can or can’t rent their property to.”

Councilman John Courage (D9) said he is concerned about the “social fabric” of neighborhoods. Taking long-term neighbors from a neighborhood impacts the property rights of people who bought homes there in the first place, he said.

Some Council members said they received a host of suggested changes from neighborhood associations that they will forward to Shannon for review.

Shannon said he welcomed Council members’ feedback.

“This is part of the process,” Shannon said. “I’m actually encouraged by where we’re at … we don’t want to do something that’s wrong. We want to make sure that what we do is eventually right.

“It’s just a matter of deciding on what that ‘right’ is.”

During the Texas Legislature’s most recent session, a new state law regarding short-term rentals almost came to fruition but eventually was halted in a House committee. That law, largely supported by short-term rental platform companies, would have overridden almost all local rules.

“We fully expect that to be discussed at the next legislative session as well,” Shannon said.

Iris Dimmick

Iris Dimmick

Senior reporter Iris Dimmick covers City Hall, politics, development, and more. Contact her at iris@rivardreport.com