Council to Vote on New Short-Term Rental Rules in November

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An Airbnb home in Dignowity Hill

Bonnie Arbittier / Rivard Report

An Airbnb home in Dignowity Hill on Lamar Street.

San Antonio City Council is slated to vote Nov. 1 on new rules aimed at regulating more than 2,000 short-term rentals (STRs) across the city – setting density and permitting requirements, including fees for people who put their home, apartments, rooms, or other property up for rent for less than one month at a time on platforms such as Airbnb and VRBO.

The proposal, which would define and regulate owner-occupied (Type 1) and non-owner-occupied (Type 2) STRs differently, is the result of more than 18 months of stakeholder, community, and task force meetings. City staff has been working with a 24-member volunteer task force since April to fine-tune the recommended policy according to City Council's input.

There are currently no regulations for STRs in San Antonio, which means "there’s really no voice for neighborhoods at the table," said Mayor Ron Nirenberg, who endorsed the proposal as a good compromise.

If approved, these regulations would put in place penalties for neighborhood nuisances, attempt to tame the proliferation of so-called "hotel districts" in residential neighborhoods, collect more taxes from operators, and prohibit all STRs from being used for events such as weddings and other parties.

Click here to download a summary of changes to the ordinance that have been made since April and here for a draft copy of the ordinance.

Councilman Roberto Treviño (D1), whose district is estimated to have the most STRs, worked closely with City staff on crafting the proposal that represents compromise on both sides, he said.

"I'm not going to let the perfect be the enemy of the good," Councilman Manny Pelaez (D8) said. "The best we can hope for is to make sure everybody walks away a little bit unhappy."

City Council members were generally receptive to the new rules, but suggested the City move forward thoughtfully and study STRs' impact on the affordable housing market.

"I do feel that perhaps we would be well served by having a study on the SA area regarding the impact" to the affordable housing stock, said Councilwoman Ana Sandoval (D7), especially given the City's recent investment in housing programs and approval of the Housing Policy Task Force's policy framework.

Councilman John Courage (D9) said the new rules were "too easy" on Type 2 STRs, which take away housing stock amid the city's "crisis in affordable housing."

The theory that Type 2 STRs contribute to gentrification and economic segregation is gaining momentum, Courage said. He suggested that the $100 registration fee be increased to $200 and collected every other year instead of every three years.

Despite the lack of current regulation, all San Antonio STR operators are required to pay local and state Hotel Occupancy Taxes (HOT). Less than 400 of the estimated 2,000 units pay the local tax, Shannon said. Some STR platforms automatically pay the state tax.

Existing Type 2 operators would be "grandfathered in," as long as they are paying local and state HOT. But under the new rules, they would need to submit documents for a permit, pay new fees, and agree to comply with safety codes. A grace period to submit those documents would be built into the new ordinance, said Michael Shannon, director of the City's Development Services Department.

Type 2 operators who don't currently pay the local HOT or are registered with the City's Finance Department prior to Council approving an ordinance could risk being shut down by way of fines, Shannon said. That's because the regulations for Type 2 STRs are more stringent than those for Type 1 units, which are allowed anywhere as long as their operators can prove they live there.

Regardless of Council action, the finance department is already in the process of looking for a company or consultant to help collect unpaid HOT and bring STR operators into compliance with the tax law that requires them to pay it.

City Manager Sheryl Sculley noted that if enforcement needed more funding or if the ordinance needed adjustments, those updates could be made in the future.

Under the new ordinance, no more than 12.5 percent of units on a residential block could be used as a Type 2 STR; only one unit in multifamily buildings with one to seven units could be a Type 2 STR; and no more than 12.5 percent of units in a multifamily building with eight or more units could be Type 2 STRs. The City's Board of Adjustment would be in control of granting exemptions to these density rules.

Courtesy / City of San Antonio

Density rules as outlined in the City's proposed STR ordinance.

The new regulations would also prohibit housing projects that received City incentives from becoming Type 2 STRs.

“The key change [made to the proposal was] to find that balance that allows Type 2s by right in a neighborhood – up to a point," Shannon said.

Owner-occupied STRs, such as garage apartments or accessory dwellings on the same property as the operator's home, will be allowed anywhere throughout the city as long as their operators register with the City and pay taxes.

STRs found to be operating without a permit, Shannon said, could face a fine of $200-$500. Operators receiving three "strikes," or violations, would have their permits revoked.

“We thank the City Council for their careful and thorough approach including a task force, workshops, surveys and stakeholder engagement," an Airbnb representative stated in an email. "We look forward to the next steps as the council considers rules that ensure hosts have the right to share their homes while balancing the needs of the community. We also remain committed to finalizing a collection agreement with the City to help collect and remit transient occupancy taxes.”

A statewide law, proposed in the Texas Legislature last year and largely supported by short-term rental platform companies, would have overridden almost all local rules. The proposal was halted in a House committee, but City officials expect that legislative fight to continue into the next session.

Task force member and San Antonio Hotel and Lodging Association President and CEO Liza Barratachea said the "recommendations of the task force were very balanced."

The task force was made up of neighborhood groups, industry representatives, STR operators, and other stakeholders.

Council's changes make the rules "a little bit less stringent for the Type 2s, but really they're similar" to the task force's original proposal, Barratachea said. "I think it's good for Council to move forward ... and to hold people accountable and maximize the opportunities for the hotel occupancy tax."

While hotels have to follow many rules and regulations, she said, STRs don't have any beyond tax rules.

"We have never been opposed to STRs," she said, but hotel operators want a more level playing field.

“As a destination organization, we research all travel trends," Visit San Antonio President and CEO Casandra Matej said. "It is certain that the short-term rental market provides an option for visitors to choose from as alternative lodging. We understand that these new trends will require boundaries or regulations. The City Council can set those boundaries, with visitors’ and residents’ needs in mind.”

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