The City’s Planning Commission unanimously approved a proposed short-term rental ordinance Wednesday, a key vote towards regulating platforms such as Airbnb, HomeAway, VRBO, and others.

The proposal, developed by a 23-member task force over almost a year, includes different fees and permit processes for two different types of short term-rental properties: owner-occupied, or “hosted,” and non-owner-occupied. The fees and level of difficulty in obtaining a permit for the latter in residential areas is much higher in an attempt to discourage potential loss of housing stock in desirable neighborhoods – a serious concern for many neighborhood associations.

Click here to download the draft ordinance.

Under the proposal, owners or operators of both types of rentals would be required to pay local Hotel Occupancy Taxes on each stay and provide one off-street parking spot per listing.

The approval came with a note from the commission to City Council that members would like the City to “look into” prohibiting Type 2 – non-owner-occupied or “non-hosted” – short-term rentals in City historic districts. Commissioner Mary Rogers said she didn’t want to see a “hotel district” replace a historic neighborhood. 

Outright prohibition in historic districts, said Development Services Administrator Catherine Hernandez, might conflict with equal-protection laws. Rules that limit what kind of people can live or use certain property for a period of time can expose Texas cities to lawsuits, a City attorney added. In other words, historic districts are established around design characteristics – not who lives there.

The ordinance gained unanimous approval – with an amendment – from the Board of Adjustments on Monday and will continue to the Zoning Commission, Equity and Health Committee, and then to City Council, which will consider all three recommendations and make the final decision. Council could approve  the ordinance as is, reject it entirely, or modify the proposal.

The board added a recommendation that short-term rentals can’t “alter the essential character of the district and location” of a neighborhood and that it can consider over-saturation in its deliberations.

Michael Dice, Development Services Department Policy Administrator, presents a proposed short-term rental ordinance to members of the Planning Commission.
Michael Dice, Development Services Department policy administrator, presents a proposed short-term rental ordinance to members of the Planning Commission. Credit: Bonnie Arbittier / Rivard Report

Michael Dice, Development Services Department policy administrator, pointed out that ordinances – especially those attempting to regulate an industry-disrupting technology – go through a kind of review period. Twelve to 18 months after implementation begins, staff can produce a “post-mortem report” to outline possible improvements and efficiencies, he said.

The task force settled on a process that mirrors its permit of occupancy process for owner-occupied rentals, Dice said. A “special exemption” process is used for non-owner-occupied rentals in residential areas – which requires a supermajority vote from the Board of Adjustments and that it’s a certain distance away from other non-hosted listings.

The supermajority requirement could be “unduly prohibitive,” Commissioner Casey Whittington pointed out, as that would mean approval would be needed from nine of 11 board members.

“We’re not going to get everything right on our first attempt,” Whittington said, and asked City staff to follow up on how often applications are rejected or accepted by the quasi-judicial board.

Click here to download Dice’s presentation to the commission.

The density/distance rules for non-hosted rentals are similar to the City’s traditional bed-and-breakfast regulations. Some residents said all short-term rentals should conform to all of those rules.

“The longstanding B&B ordinance has successfully balanced short-term lodging through zoning regulations,” said Margaret Leeds of the King William Association.

Another option the task force considered was a zoning requirement for all short-term rentals, Dice said, but the proposed process allows permits to be non-transferable to another owner, operator, or location.

Some residents are unhappy with the results of the task force’s deliberations.

“It allows houses in single-family and residential neighborhoods to be operated as hotels,” said Rosalyn Cogburn, who has lived in the King William neighborhood for 30 years. Short-term rentals bring “strangers that come and go and care nothing for the neighborhood they leave behind.”

But short-term rentals provide property owners an opportunity to make additional income that helps them maintain, restore, and thrive in homes with increasing property taxes, said Charlotte Kerr Jorgensen.

“For us as a family, it has been a remarkable addition,” said Jorgensen, who has a listing at her home in Olmos Park Terrace and served on the task force. She has had positive experiences with the guests that stay at her home. 

As for the task force (click here to download a list of members) process, she said, “it made me proud of democracy.”

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Representatives from short-term rental platforms, the Real Estate Council of San Antonio, and neighborhood associations joined several short-term rental operators and district staff from Districts 8 and 10 for several meetings to hash out the details.

They worked off a rough draft of recommendations put together after then-Councilman Mike Gallagher (D10) submitted a request for review of the emerging industry.

Staff and the task force reviewed policies in several similar cities, but focused on those in Texas as property laws vary by state, Dice said. And the State could still undo much of the local work done.

Although Senate Bill 451 and House Bill 2551 – aimed at restricting rules local municipalities can impose on short-term rentals – died in committee during the last session of the Texas Legislature, he added, “based on the two bills, I would assume [the issue] would come back.”

The proposed ordinance will be reviewed by Zoning Commission on Tuesday, Jan. 16, the Community Health and Equity Committee on Thursday, Jan. 25, and then to City Council for a vote on Thursday, Feb. 8.

Iris Dimmick

Iris Dimmick

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