Proposed Short-Term Rental Ordinance Treads on Property Rights

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The intersection of Kayton Avenue and South New Braunfels Avenue in Highland Park

Bonnie Arbittier / Rivard Report

Property rights are a key component of short-term rental policy formulation in San Antonio.

The San Antonio City Council recently had its first opportunity to review new proposals aimed at regulating the homesharing industry in San Antonio. In developing a proposed ordinance for short-term rentals, City leaders have consistently stressed the need to balance the rights of property owners with concerns about safety and maintaining the integrity of the city’s neighborhoods.

Unfortunately, the proposed ordinance does not achieve this balance. As an organization dedicated to protecting the rights of homeowners, the San Antonio Board of Realtors (SABOR) opposes its adoption. Not only does the proposed ordinance infringe on the rights of property owners, its provisions are also based on anecdotal evidence, at best, and they attempt to solve problems that can be better addressed by homeowners’ associations and enforcement of existing regulations.

SABOR strongly opposes local efforts to undermine the rights and protections of property owners guaranteed by the Texas and U.S. Constitutions. As District 8 Councilman Manny Pelaez commented, “I can’t think of anything less Texan than telling people who they can or can’t rent their property to.”

SABOR and Pelaez are not alone in that contention. During the last session of the Texas Legislature, state Sen. Kelly Hancock (R-North Richland Hills) introduced SB 451, a measure that would have prevented cities from banning short-term rentals and severely limited the ability of cities to pass ordinances restricting the practice.

While SB 451 did not make it to the Governor’s desk last year, it is likely that lawmakers will take up similar legislation in 2019. If passed, such legislation would override ordinances in cities like Austin, which is facing a court battle over its homesharing regulations. San Antonio could find itself in a similar situation, all for the sake of an ordinance that might ultimately be negated by the Texas Legislature.

One of the goals of the San Antonio ordinance is to protect the rights of neighborhoods. But there is no evidence that short-term rentals are actually endangering those neighborhoods. Neither city staff nor the task force that drafted the ordinance provided data from police call logs, code enforcement activity, or other public records that demonstrate any link between short-term rentals and alleged adverse impacts to the community.

Neighborhood and homeowners’ associations, which are in a better position to determine what’s best for their members than a one-size-fits-all city ordinance, are already dealing with the issues the draft ordinance purports to address. Without a demonstrated need, why pass an ordinance with its associated enforcement costs that add to the city budget?

The proposed ordinance also lacks specifics on crucial issues, including the parameters of an inspection and definitions for what is considered to be appropriate action by an owner in response to complaints against a short-term rental occupant. Such ambiguity is an invitation to both abuse and legal challenges.

The draft ordinance imposes special requirements on rental properties that are not owner-occupied because they allegedly represent a unique threat to the health, safety, and overall fabric of a neighborhood. Again, however, staff and the task force have failed to marshal empirical evidence that such properties threaten a neighborhood’s integrity or the quality of life of its residents.

While the provisions of the proposed ordinance and its need are murky, the benefits of the short-term rental industry are clear. During the third quarter of 2017 alone, Airbnb-listed properties in San Antonio generated revenue of nearly $3.7 million, according to hotel-industry research firm Source Strategies Inc. That revenue has been crucial to the revitalization of neighborhoods across the city, encouraging individual investors to buy distressed homes, renovate them, and add them to the city’s affordable housing stock.

Let’s preserve private property rights while allowing the nascent homesharing industry to flourish. Whatever issues city staff and the task force believe are associated with short-term rentals can be addressed through enforcement of San Antonio’s existing noise, public nuisance, property maintenance, and parking regulations. What isn’t needed is a vague new ordinance that would almost certainly be challenged in court and that will likely be nullified by the Texas Legislature.

17 thoughts on “Proposed Short-Term Rental Ordinance Treads on Property Rights

  1. I’m all for the minimum amount of regulation necessary. A property owner who lives at the house and wants to let out a spare room or casita should certainly be able to do so without a bunch of burdensome regulations and fees cutting into time and profits. But those people also need to be paying their Hotel Occupancy taxes. Part of the reason this ordinance got started was the fact that most short-term rental hosts weren’t paying it. The other reason regulation is needed is to limit the number of absentee investors who buy up properties and change the whole character of the neighborhood. King William neighborhood is certainly an example of where this is getting out of hand. I think it is good that the proposed ordinance makes the distinction between type 1 and type 2 rentals. Type 1 owners who live onsite should basically be left alone so long as they pay their HO tax.

    • Thank you, I don’t think “whole character of the neighborhood” and “quality of life” can be fully quantified in the information from data SABOR argues it wants. SABOR would probably be happy enough that properties are being renovated and upgraded, raising the property value, being sold, and bringing in more commission money. And that’s great, and SABOR would just be following their business-instincts! No problem here with capitalism focusing sharply on certain goals … but those are not the only goals neighbors want.
      Yes, to lightly regulated, if at all, Type 1 rentals! No! to free-loading (in terms of not paying the HOT) Type 2 properties! No to absentee landlords and hoteliers!

  2. Well, having a centralized authority like the state government come down and dictate how we-the-people in our communities can best live is also not Texan (nor American!)
    I value your argument, even if it comes from an organization whose best interests lies in higher property valuations and not living day-to-day and night-to-night, physically, in those neighborhoods. Also, what does “affordable” mean to SABOR?

    • yeah, so let’s get rid of zoning, view-shed proposals, and eliminate property tax exceptions for churches and schools.

  3. Make homes register and hold accountable for HOT tax. The few of us who are paying th hotel tax are being penalized by following the rules. Once a home is registered, the raucous homes that are having complaints filed by neighbors to police (noise, lewd behavior) can be put on notice or have permits revoked by city. Collect taxes and register homes to monitor the ones that are actually a nuisance to the neighborhood.

    Other then that, leave our properties alone. I can’t tell my neighbor to get rid of his dog because he barks when trains go by or to tow away the car in his back yard that he swears he’ll fix one day. If I’m following the law, leave me alone. Quick reminder, the state government already said that STR are not commercial (please don’t respond with following the law and zoning issues)

  4. Genuine question: What is the difference between a true Bed and Breakfast and a short-term rental listed on AirBnB, and why do opponents of the STR ordinance believe these businesses should be treated differently under the law?

    • Hello Andy. When I converse with other STR owners, we generally agree that we don’t have a problem with most of Ciry ordinances (permits, HOT tax, registering) because we are already legal. I have a problem with a city-wide ordinance mandating how many and how far apart the rentals can be. If King William wants to set that up internally, that is up to them. Just because there is a street in King William that the neighbors think is too inundated with STR, why propose a blanket regulation that covers every neighborhood in city? The idea that the city can tell me what to do with my property is upsetting. I welcome STR ordinance because over 1/2 of the STR properties would disappear and make my properties do better.

  5. SABOR is ignoring the property rights of those who purchased residential property believing it would remain residential.

    Almost everyone believes that STRs owe the hotel occupancy tax, thereby proving the activity is commercial and not residential. Moreover, under Texas law, a temporary guest is a licensee, not a tenant.

    In the inner-city historic districts hit hardest by the influx of STRs, all they want is to continue to have neighbors, whether they have barking dogs or not – at least they live in the area and have skin in the game.

    • Hello Rose,

      In August 2017, the 3rd court of Texas appeals ruled that STR are not commercial. It has nothing to do with length of time of stay. Under Texas law, the whole thought process of commercial vs residential is not relevant in the discussion.

      • Exactly, in way does owning a property and having a longer term resident not be the same basic purpose of earning a little money and equity on a house you do not live in? Plus a bad long term tenant is an issue for six months to a year..according to their contract

  6. There are several statements being made in the commentary which need to be addressed by this response.

    Yes. “One of the goals of the San Antonio ordinance is to protect the rights of the neighborhood” but the author incorrectly states that neighborhood and homeowner’s associations have the power to address their issues that the draft ordinance purports to address. Inner city neighborhood associations have NO powers to protect “a neighborhood’s integrity or the quality of life of its residents” when it deals with the proliferation of short term rentals especially non-owner occupied Type 2 STRs.
    A reference is made in the commentary to Councilman Pelaez’s (District 8) demonstrative support for property rights to STRs. But District 8 already has the luxury of neighborhood protection since most if not all of the district’s neighborhoods are protected by HOA rules which prohibit STRs. Since most property owners in the district are willing to give up their rights to STRs in order to protect their property values and the quality of their neighborhood, the defense for property rights to STRs is a rather moot point. So it begs the questions: Shouldn’t inner city neighborhoods be afforded the same protection as allowed in outlying districts? Or should our San Antonio inner city neighborhoods be seen as the “sacrificial lambs” in this $33 Billion home sharing economy and everyone else is protected?

    Per the commentary…..”staff and the task force have failed to marshal empirical evidence that such properties threaten a neighborhood’s integrity or the quality of life of its residents.”

    It has until recently be difficult to analyze the impact of the home sharing economy on rental and housing cost, housing inventory, gentrification and its overall impact on the “fabric of the neighborhood”. But recent studies now being published from institutions such as UCLA/USC ( “The Sharing Economy and Housing Affordability: Evidence from Airbnb” – a nationwide study) and McGill University ( “The High Cost of Short Term Rentals in New York City” ) has shed light of the impact on neighborhoods by the home sharing economy.
    Read one of the reports.
    http://www.mcgill.ca/newsroom/channels/news/high-cost-short-term-rentals-new-york-city-284310

    With regards to the aforementioned study, some may say that San Antonio is not New York City but other cities comparable in size to San Antonio in the midst of the home sharing economy are experiencing the same market conditions as New York City.

    So contrary to the commentary, there is growing “empirical evidence” which confirms that the home sharing economy (especially the non owner occupied short term rental Type 2 STRs) is increasing rental and housing cost, reducing housing inventory and gentrifying neighborhoods adversely affecting long term residents and home owners. All….including SABOR…should see these trends as destabilizing the SA Comprehensive Plan, Affordable Housing initiatives and neighborhood sustainability.

    Furthermore, the home sharing economy doesn’t help in shoring up our inner city school system. A recent RR article reported that SAISD has shown a decline of more than 2,000 students in the last two years. SAISD projects to lose an additional 800 students in 2018-2019. There are many factors that have contributed to this decline but one would surmise that removing long term rental and home ownership opportunities doesn’t help the situation. The home sharing economy would remove potential families from participating in neighborhood schools.

    We are all in favor of protecting our property rights but in the same token we should all be in favor of protecting our neighborhood rights. The home sharing economy is a $33 Billion business and its unfolding as a David versus Goliath in neighborhoods across the country. For the past 300 years, neighborhoods have always defined San Antonio. The City Council must now show its resolve and protect its neighborhoods by passing the Short Term Rental Ordinance.

    • I would posit another analogy.
      Goliath: the hotels and people that pay for these biased studies that say nothing of how AirBnB has helped blighted neighborhood like the East Side where most people would never even come before it became the cherished Diggy Hill.
      David: The minorities and young families desperately trying to hold on to their property and leverage their assets without going back into the slavery of debt.
      Phillistines: Folks like yourself who cherry pick studies that ignore the positive impact platforms that promote a sharing economy and revitalize marginalized neighborhoods like for instance Dignity hill, which until recently was nothing to San Antonio and its environs.
      But just because we don’t agree doesn’t mean we have to be disagreeable. I hope the city council shows its resolve and stands up to the insidious erosion of private property rights. either you have them, or you don’t.

      • Thank you for your reply.

        If one would take a deeper dive and research the home sharing economy in San Antonio, one would find that the hotel industry is also utilizing the home sharing platforms to fill empty rooms. So one cannot arbitrarily say the hotel industry is aligned with “people” who want to save neighborhoods. Has anyone recently heard of any position statement on STRs from the San Antonio hotel industry? Its been rather quiet.

        Furthermore, CCHIP (Center City Housing Incentive Policy) offered by the City to developers to create long term residential housing in the City….well guess what?…some of this housing that was subsidized by the City ( you and me) has found its way onto the home sharing platforms. This was long term housing meant for the 1Million folks anticipated by 2020. Seems like everyone ones to get into the STR action……even subsidized housing….to make a quick buck.

        In past times (and not too recently), older neighborhoods surrounding the city center have been revitalized by home owners who had a vision to become residents invested in their community. This has happened way before the home sharing platform ever existed in San Antonio. And you make a point with regards to “David”….”The minorities and young families desperately trying to hold on to their properties……into the slavery of debt”. In the real world, some segments of the home sharing platforms are NOT sensitive to the needs of the “Davids” as quite of number are finding no access to affordable housing in the neighborhoods. The old school version of revitalizing a marginalized neighborhood by people who had a vision to invest in a neighborhood and worked together to create a community for themselves and their families….well….is not the mission statement of Airbnb, HomeAway, VRBO or any other home sharing platform. Their mission statement is their ROI.

        There seems to be no major issues with the Type 1 STR (owner occupied) which helps the homeowner, elderly, minorities and families ( your Davids of the world) maintain and keep their homes in their neighborhood. But, the Type 2 STRs (non owner) are morphing into big business models and should be regulated to protect neighborhoods. If you read the San Antonio STR ordinance, a Type 2 STR is allowed under certain conditions. The owner has due process. You and your neighbors will also have a say on whether you want a Type 2 STR in your neighborhood. So both sides have due process so it doesn’t become an “insidious erosion of private property rights” on both sides of the fence.

        For those who are interested in the growth of the Airbnb market in your neighborhood, just take a look at the AirDNA website, http://www.airdna.com drop in your zipcode, and see the number of AIRbnb Type 1 and Type 2 short term rentals in your neighborhood. The Type 2 surely outnumber the Type 1. Furthermore, take a deeper look at the forecasted growth of STRs in your neighborhood. It’s double digit growth for most inner city neighborhoods!! One can also see the number of STRs in neighborhoods such as District 8….. which are minimal since they are protected by HOA’s. One may now understand the concerns of inner city neighborhoods when one looks at the data. And note that this is only Airbnb and doesn’t include the other platforms of HomeAway, VRBO and Craiglist.

        God Bless and enjoy Fiesta!

  7. Your property rights are protected under both the 5th and 14th amendment of the constitution. The right to investments in your property to allow you to gain economically. What if one house on a street improves its looks…totally refurbished over, and they sell and that sale causes other appraised values of houses to rise, should we stop people from rehabing houses because it will effect you living next door? Renting out rooms for boarders is nothing new, and many houses in the historic neighborhoods were exactly that, boarding houses. We are such a unique tourist town we out to be the leaders on how AirBnB’s work and find it in our neighborhood “souls” to be open and welcoming of people whether here for a lifetime or for a day or two.

  8. I think that my neighbor’s choosing to rent out an extra room is a different issue than someone’s buying the house next door to run as a de facto hotel without the owner’s living on site.

    I don’t think that the latter should be allowed at all.

  9. Well, this is Texas, so instead of regulating STR, why don’t we get rid of all the burdensome regulations for hotels? From sprinkler systems to fire alarms, to handicap rooms, and so on, let’s put everyone on the same field.

    What everyone seems to forget here about the sharing economy is that it is never about one specific room or property rental; it is about the aggregate effects of a scaleable platform that undermines the overall lodging market.

    There is nothing wrong with empowering individuals to rent out a room or even their property for a few days or weeks out of the year in a residential zoned neighborhood. It is different to let them be run as defacto hotels.

    In either case, for the protection of someone who pays for the room/property rental, the government has a vested interest in making sure there is basic safety equipment and that taxes are paid.

  10. I have a question for those who are renting out on STR platforms and paying HOT. I know there is not regulation for STRs at the moment, so my understanding is that in San Antonio there isn’t a way to register a STR, since those types of rentals not recognized by the city yet. Therefore, how would one actually go about paying the HOT? I did a quick search (I do mean quick, so please let me know if I just didn’t find the right site and there is something out there I missed) on how to “register” with the city as a STR, and I couldn’t find anything. So are the people who are paying HOT registering as a Hotel or BNB? Or is it something you just send them without registering? A lot of articles I’ve read on SA STRs have said the amount of “registered” STRs is low relative to the amount that operate, but I am extremely unclear on how to “register” and what I would register as if I were to start operating a STR…and if I cant figure it out, I am not sure how we can expect most people who know very little about what the regulations and taxes behind STRs to figure out how to pay the appropriate taxes. With that said, I started renting my place as an STR, and actually want to pay the HOT….I am just a little confused on how to do that…its an honest question, and definitely not a trap or argument I am making 🙂 I do have lots of thoughts on the great dialogue in this comments section, but I most immediately want to understand the current HOT situation for “registered” STRs so I can be sure I am doing the right thing (even if not legally required to yet)….

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