San Antonio to Consider Airbnb Regulations

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A comfortable Airbnb room in San Antonio. Photo by Gretchen Greer.

Gretchen Greer for the Rivard Report

An Airbnb room in San Antonio.

There are fewer homes available in San Antonio for rent through short-term rental platforms than in other large Texas cities – but just enough for neighbors and City Council members to notice.

After receiving complaints from residents about noise, traffic, trash, and other neighborhood disruptions associated with renters from such platforms, Councilman Mike Gallagher (D10) called on City staff to start investigating current zoning and tax rules, potential safety issues, and policy recourse.

His constituents were concerned that their "residential areas were now becoming commercial areas," Gallagher said. Some simply didn't like the idea of "strangers walking around" their neighborhoods and homes.

Short-term rental companies, such as Airbnb, are online marketplaces that allow users to lease or rent homes as short-term lodging options. Instead of staying at a hotel or hostel, people traveling to participating cities may stay in temporarily vacant homes. Short-term rental companies do not own any lodging, but merely act as a brokers in return for percentage fees. Hosts determine the rates for lodging.

With the Governance Committee's approval on Wednesday, the City is now on a path to start regulating short-term rentals, a process several cities and states continue to struggle with worldwide, especially in major cities like New York, San Francisco, and Paris.

At least one more stakeholder meeting will be held at 10 a.m. on Monday, March 27 at the Department of Development Services, 1901 S. Alamo St. City staff then plans to present information to Technical Advisory Committee, Planning Commission, tentatively the Neighborhoods and Livability Committee, and then for consideration by full City Council, which is expected in May. All of these meetings are open to the public. Meeting information can be viewed online here.

Click here to download a draft ordinance composed by City staff.

Locals who host short-time rentals, such as Elizabeth Lyons Houston, think there needs to be more time and dialogue among community stakeholders before the draft ordinance goes through City bureaucracy. Houston attended the first stakeholder meeting on Monday, she told the Rivard Report, and "it didn't go super well."

She said the meeting ended on a good note, but that the City seemed unaware of several unintended consequences the proposed regulations could have on the community.

"[May], essentially a month from now, is not really enough time," Houston said, who called many of the requirements outlined in the proposed ordinance "burdensome. ... The point is not just to [make up rules] – do it smartly, so you don't have to do it again."

Much like the "industry disruptive" technology associated with ride-hailing mobile applications, Airbnb (the largest company) and other platforms like HomeAway and FlipKey are fine-tuning how they interact with local and state rules. San Antonio has the benefit of being behind the trend, meaning officials can look at case studies from across the U.S. for what combination of regulation – if any – could work locally. The City also has the added experience of its back-and-forth regulation of rideshare.

Councilman Mike Gallagher (D10) asks a question to SAPD Chief William McManus. Photo by Scott Ball.

Scott Ball / Rivard Report

Councilman Mike Gallagher (D10) submitted a Council Consideration Request regarding short-term rentals.

Gallagher suggested in his Council Consideration Request that short-term rentals should be considered a "home occupation," as homeowners collect revenue from these visitors – or "customers."

Since these residences provide essentially the same services as hotels or bed and breakfasts, Gallagher said Wednesday, they should be beholden to the same permitting and charge the City's Hotel Occupancy Tax (HOT). Other cities like New Orleans and Philadelphia have regulations that collect such taxes. A preliminary draft ordinance suggests that short-term rental property owners would have to register and be inspected for health and safety violations.

This is not an anti-business idea, Gallagher said, "I just want to make sure that it's done properly."

City Council members on the Governance Committee, which is chaired by Mayor Ivy Taylor, agreed that the City should begin seriously looking into rules that balance the protection of neighborhoods while embracing the emerging short-term rental industry.

Opponents to local regulations cite the platform's review and profile feature, which allows hosts to review their occupants and vice versa, as a tool to weed out "bad" guests and hosts in the platforms' respective communities. Users who accumulate too many negative reviews will likely not be approved for a rental.

"Our community relies on honest, transparent reviews," Airbnb's review policy states. Its Trust & Safety policies outlines hosts' and guests' potential concerns and addresses unease hosts' neighbors may experience. 

Councilman Ron Nirenberg (D8) suggested that a part of the solution could be enforcing existing rules of code and conduct related to noise, littering, and parking. He cautioned against being "too heavy-handed," but was open to considering rental registration.

Nirenberg sees the conversation as "more about trying to identify the bad actors and getting them out of neighborhoods as opposed to discouraging Airbnbs – which I think are here to stay."

A growing concern in San Antonio and nationally is that people will start buying or flipping properties just to rent them out on short-term platforms, possibly lowering property values. This sidesteps the spirit of the system: to rent out your home or apartment when you're not using it, or to rent out extra space where you live – like a room, garage apartment, or detached bungalow. There are even campers and RVs listed for rent in San Antonio.

"Patience" and "thoughtfulness" will be important factors to San Antonio's regulations, said Councilwoman Rebecca Viagran (D3).

The authentic experience that short-term rentals offer visitors to San Antonio is important, Viagran said, but it's also important to make sure it's "respectful for the neighborhoods too."

Then there is the liability issue: If a visitor is hurt while staying in an apartment, is that the responsibility of the host (whoever rented out the space), Airbnb, or the owner of the apartment building? Airbnb offers Host Protection Insurance and other insurance companies are beginning to offer similar products for renters and homeowners.

These issues and others will be discussed throughout the coming months as the draft ordinance receives community and City officials' input.

The key of this regulatory challenge, Councilman Joe Krier (D9) said, is to recognize property rights of people who want to make extra cash through short-term rentals and other people who don't want to live next to what might be considered a disruptive business.

"It's a delicate balance," Krier said.

Senate Bill 451 in the Texas Legislature would restrict local municipalities from banning or regulating short-term rentals in the state.

"Under the bill, local governments could still prohibit short-term renters from housing sex offenders or selling alcohol or illegal drugs to guests," according to The Texas Tribune.

This bill is one of several that various cities, including San Antonio, oppose because it takes away local control.

For the most part, Airbnb is ready and willing to work with local governments and state agencies, said Laura Spanjian, Airbnb public policy manager. She gave a presentation in San Antonio last year at an Urban Land Institute luncheon.

The San Francisco-based company, which is projecting earnings of $3 billion in 2020, started operating in a handful of cities in 2009. In 2015, it facilitated more than 40 million "guest arrivals," and had more than 2 million listings in 34,000 cities in 190 countries.

Airbnb guests typically stay longer than hotel guests and are more likely to explore more of their destination city, Spanjian said. "It's not just two days. It's not just the River Walk and the Alamo."

Compared to Austin's 6,000 hosts, San Antonio has an estimated 900, Spanjian said. Airbnb guests in San Antonio come from more than 80 countries.

Click here to download Spanjian's presentation (warning: large file size).

Houston, who has been an Airbnb host for about one year and uses the platform for her own travels, said over-regulating hosts will cause some to drop off the platform and weaken San Antonio's economy.

"We need to attract innovative tech companies and Millennials – just like [rideshare] – Airbnb is an important aspect for newcomers and visitors," she said.

About 64,000 people stayed in San Antonio Airbnb listings last year, according to information the company provided Houston, which generated a $42 million impact.

The "vocal minority" complaining about short-term rentals doesn't realize that a larger percentage of the guests and hosts aren't bothering anyone, Houston said, adding that she hopes more public meetings can occur before City Council considers regulations.

10 thoughts on “San Antonio to Consider Airbnb Regulations

  1. Airbnb has driven rents to the extreme in New Orleans, a city with no real industry but tourism. The city finally imposed a ninety-day-a-year cap on them. We’ll see how that works out. Affordable housing is hard to find down there now, though.

  2. “Since these residences provide essentially the same services as hotels or bed and breakfasts, Gallagher said Wednesday, they should be beholden to the same permitting and charge the City’s Hotel Occupancy Tax (HOT). ”

    Other than the notion that money is exchanged for something of value, there is nothing “essentially the same” about these services at all. Such a statement communicates a fundamental misunderstanding of what the sharing economy is all about, and is also very troubling (though not surprising) to hear from a politician exploring new ways to tax and regulate local transactions.

    The whole point of Airbnb is to empower individuals to create their own positive, unique, and valuable person to person exchange of services with informative user-reviews and safety mechanisms built into the platform to regulate the whole model. That last bit is the critical element as it enables owners and leasers a greater proportion of control over how they choose to craft their own experience within the apps framework (or not), and also how they choose to react to them for the good of the Airbnb community as a whole.

    This app has not only democratized the ability for people provide or utilize such a service with great ease, but to go about doing so in a way that is a very different experience of what a hotel or motel would provide. For instance, no Hilton could replicate staying in a backyard Yurt. Surely no Holiday Inn and Suites could compete with a similarly priced three bedroom home with a zero-horizon pool decorated with Texas antiques, local art, and classic San Antonio photography. Even when compared to proper bed and breakfasts like a handful of those operating in South Town, the beauty of Airbnb is that it allows those offering a space the choice to offer anything from simpler to more unique experiences at competitive prices (sometimes with little to no physical interaction between human beings at all). The net result is a radically pro-consumer innovation that puts control in the hands of its users.

    Of course, this presents a major threat to the traditional models of the hotel industry as a whole and certainly those across San Antonio.

    I would strongly suspect this sudden surge of interest in regulating what people do or don’t do with short term rentals on private property has little to do with a few people worried about strangers walking around their neighborhoods in District 10 (newsflash, San Antonio is a big city with a lot of people walking around). It’s not even about safety either, though I am sure that word word will tossed about liberally and with great favor. It has much more to do with a hotel lobby looking to discourage competition via regulation and taxation enacted by a city council always on the look out for subtle new ways to extort money from entrepreneurs and hard working San Antonians.

    The best case scenario is that Senate Bill 451 will pass leaving the City Council without any ability to partner with the hotel industry to mess up what is now a burgeoning part of the city’s vibrant economy.

    However, if it doesn’t pass, I would at least encourage the San Antonio City Council to examine the disastrous consequences of NYC’s partnership with the hotel lobby to squash competition in their city via the ban and heavy regulation of short term rentals through Airbnb. As a result, the supply of short term rentals diminished, and hotel prices unsurprisingly went up.

    In many ways, that battle between NYC and Airbnb mimics the one rideshare companies have been fighting with the taxi cartel and their repressively progressive allies in municipalities seeking to assert elements of government control. As San Antonio has experienced and Austin is now learning on the rideshare front, the battle to inject municipal control into the sharing economy is a losing one. Stifling hosts in San Antonio will be no different.

    On another note, it would be awesome if the state could abolish the Hotel Occupancy Tax entirely. It’s not only redundant with sales and property taxes, but increasingly incompatible with the way Texans do business through emerging innovations like Airbnb.

  3. So a private citizen, entering into a contract involving his own private property, would have to “register” with the government so as to be regulated and subject to hotel style taxation? One wonders what, if anything, one can possibly do in or with their private property that would not be subject to Leviathan’s claws.

  4. If this is passed I hope that SA can better manage the regulation roll out better than Austin. SA’s regulations are a carbon copy of Austin. Austin failed to hire employees to help manage the new rules and as a result they closed the ability to apply for a short term rental license after 30 days. The result was that only 3% of the properties that were operating before the regulations had met the requirements that were set out.

  5. I’m an avid user of Airbnb, VRBO, and HomeAway, and have been for years. These types of vacation lodging options are much more attractive to some travelers than hotels, and are an asset to a tourist destination like San Antonio. I do believe our city should benefit from its status as an awesome place to visit by collecting revenue from privately owned vacation rentals. A hotel tax on these short term vacation rental properties makes perfect sense to me. It’s fair, and it’s not a deterrent to potential tourists.

  6. The rest of us call the “sharing economy” simply “the economy.” The words don’t support an argument, though. Fundamental misunderstanding there.

    If you want to start a business, why not start one? Or is it the whole following the law thing that troubles you all (and Uber, etc all.)?

    Technology doesn’t trump laws.

    • The sharing economy is real, and is in many ways a reaction to archaic laws and traditional statist constructs such as licensing .

  7. This guy needs to provide the documented police reports related to the temp rental problems. Calls from local hotel owners don’t count.
    His district has issues and he is grandstanding to snuff out benefits for tourism.
    Benefits created by competition.
    Hotel developers get royalty treatment downtown while the small peasants get punished.
    We talk about people that have been in these neighborhoods for years trying to gain some benefit by providing private temp lodging and this guy decides to snuff that nonsense out since he feels he created the Alamo, Riverwalk, Missions, Museums all by himself and for the benefit of the big hotels. Citizens are paying tax dollars to maintain the riverwalk, etc. Maybe the hotels and apartment complexes on the river should pay for this since the small guy is being punished for trying to participate.
    All nonsense. Concentrate on the bigger picture for a change.
    His next proposal will be fine or lockup citizens who cause domestic neighborhood disputes which cause chaos to peaceful neighborhoods. Good Luck!

  8. Regulation of short-term rentals is key. Traditional homeowners insurance doesn’t cover vacation rental business activities, communities are recognizing this and regulation requiring at least $500,000 of liability can prevent allot of potential problems. Policies like the one Proper Insurance sells (https://www.proper.insure/) make short term renting lucrative and safe.

  9. This is a repeat but weighing in as someone who has stayed in other cities as an Airbnb guest but also paying attention to San Antonio patterns, I’m going to say that it is too soon for stricter regulation of Airbnb (akin with Nirenberg’s stance above) but go further and say that it is likely time for the City to plan how to support Airbnb not only as tourism but a ‘start up’ form of housing – attractive to people relocating to San Antonio and trying out different patterns of living before making (or being in a position to make) bigger commitments.

    Airbnb and similar platforms designed to pull more or different utility out of owned spaces (local Spacecadet etc) could also likely help to address one of our biggest quality of life concerns locally – vacant structures and/or owned properties that are not inhabited or occupied many months of the year (if ever) and that can fuel public safety and amenity as well as housing affordability concerns.

    In other RR comments, I’ve raised the need for San Antonio to engage in creating pedestrian strategies for key areas including neighborhood commercial districts (as other cities have done). Related, the City needs to develop an overall car-free visitation strategy, as this is clearly a leading trend not only in tourism but in business and worker relocation and retention patterns. In a recent op-ed, Bob Rivard asks why Alamo Plaza planning can’t be more like successful urban European or Mexican (or for that matter South American, Australian, African, or other North American etc) tourism site efforts. The lack of City planning for visitation not involving privately owned or rented cars contributes to this, and it seems to be a visitation pattern where Airbnb as a company and individual operators are leading the industry and San Antonio.

    It’s interesting to me that regulation of Airbnb is being framed as a ‘traffic’ or ‘parking’ issue in San Antonio as the City does not seem to have done much research on existing Airbnb clusters across San Antonio (more than anecdotal complaints) or how these properties are advertising.

    At least, I’m noting Airbnb clusters across San Antonio emerging along major VIA lines (the airport 5 / 30 etc) and promoting bus as well as creek path and B-Cycle and walking access as part of their listings.

    If the concern with Airbnb is ‘parking’ or ‘traffic,’ where is the City effort to improve other options in these emerging or long established neighborhood visitation centers? I’m thinking particularly of the St Mary’s Strip and bar zone that still lacks B-Cycle stations or better sidewalks despite being en route to downtown and Brackenridge Park, but also Rigsby & Hackberry (another Airbnb cluster) that could also be connected with the B-Cycle network for locals and visitors but the City hasn’t made even these nominal investments. In fact, I don’t believe any City sponsored B-Cycle stations (roughly $70k each) have been added in recent years despite major spending on urban planning and interventions in B-Cycle management – resulting in no stations to date on Apache Creek or lower San Pedro Creek trails or even near the City’s Cafe College downtown and downtown UTSA.

    I respect concerns about Airbnb and housing affordability, and it is part of why I support approaches like Airbnb in residential areas that can increase density as well as support homeowners while offering travelers or newcomers additional options.

    San Antonio is a city with a reported 114,000 university students and 26m visitors annually. Although we are a ‘start up’ city like (or arguably more so than) Austin, I’m noting how various ‘start up’ housing opportunities beyond Airbnb are disappearing locally, including for young people but also retirees.

    San Antonio has lost a number of affordable weekly or monthly hotels or ‘single room occupancy’ (SRO) apartments downtown and on major bus lines in recent months, but the City does not seem to be paying attention to this trend. I am very familiar with people using such hotels but also neighborhood Airbnb not only to find their footing in a new city, but to use such temporary (weeks to months to part-year) accommodation to stage moves or transitions in life, such as tackling the repair of deeply battered or neglected and long vacant residential and commercial properties – what parts of San Antonio seem to have in spades.

    Nobody wants to live next to a party house or apartment (all the time), but the City needs to frame Airbnb as part of bigger conversations about:

    – problems with VIA and B-Cycle (including the lack of planning for commercial development / retail / advertising revenue; Airbnb could at least be considered a potential sponsoring advertiser of VIA and B-Cycle as they seem to already connect with these practices. Likewise, the local hotel industry should be engaged in supporting VIA and car-free visitation);

    – limited planning for or attention to start up housing and our snowbird tourism industry (including the closure of many weekly and monthly hotels or places of seasonal accommodation like trailer parks. Noting, too, how some snowbird approaches predating Airbnb plague our neighborhoods with properties that are vacant, unkempt and dark most if not many months of the year – a more troubling issue than use complaints related to possibly Airbnb guest related noise and parking);

    – lack of pedestrian planning including planning for car-free visitation focused to universities/training centers, the airport, existing regional bus and rail options, and key downtown as well as neighborhood tourism sites or districts (including as signaled with Airbnb listings); and

    – lack of planning for a safe and healthy night time economy, including better transit options near licensed establishments that are frequently in neighborhood (and neighborhood tourism or commercial) zones, fueling a dangerous DWI culture.

    Our Airbnb situation – just like our housing situation – is not comparable with New Orleans, New York or LA or even Austin currently or maybe ever. We have our own challenges to contend with that Airbnb could likely play a key role in helping to address – including the overstock of hotel rooms citywide and a hotel industry largely not interested in supporting San Antonio car-free visitation or patterns of living but dependent on major public urban development investments (including sometimes HUD funding).

    When is the last time you saw Hyatt or Drury or other hotel advertising on a VIA bus or stop (VIA has generated less than $2m annually in commercial revenue in recent years) or a B-Cycle? Airbnb has paid for similar advertising in other cities but does not seem to have been approached as a potential local advertising sponsor. Both Hyatt and Drury (as two examples) have received public funds or support locally in the tens of millions in the last decade while Airbnb has not yet been engaged with so positively. As recent commentary by Jason Winn (published here) suggests, let’s look at what Airbnb can do for San Antonio as part of our tourism and start up and community development ecosystem – as vital as bikeshare and ride hailing and public transit as (sometimes generously publicly subsidized) hotel jobs and stays.

    https://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/economicdevelopment/programs/rc/tour/tx/sanantonioEZ/gs3

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