San Antonio homeowners who rent out their properties on online vacation platforms like HomeAway and Airbnb have 90 days to register and start paying hotel occupancy taxes to the city. It’s all part of a suite of regulations and amendments to codes passed by City Council.
The ordinance passed 8-2 on Thursday. Councilmen Greg Brockhouse and John Courage were the dissenting votes. William “Cruz” Shaw was absent. After 90 days, city officials said property owners can be cited and fined up to $500 for a Class C misdemeanor.
“Our goal is not to punish anybody; I don’t want to take anybody to court for not complying,” said Michael Shannon, director of the city’s development services department.
The new regulations include permitting fees, penalties, and density requirements for properties not occupied by owners (Type 2).
Under the new ordinance, 12.5 percent of a block-face can be Type 2 short-term rentals. There is no density regulation for someone renting a room in the home they reside (Type 1). Bed and breakfasts are included in this calculation. Fees were dropped to $100, and properties must be re-registered every three years.
Property owners are asked to self-certify health and safety regulations, but the city will respond to any complaints with an inspection. All properties that received city housing incentives are banned from a Type 2 permit.
The ordinances’ passage completes a process that included 25 public meetings, a year-long citizen-led task force, and several council hearings.
Of the 10 community members who spoke during the meeting, all seemed to be in favor, but with reservations.
Some King William residents called for a ban on Type 2 rentals earlier this year. Resident Margaret Leeds said: “It is the substance of the neighborhood that is threatened.”
But despite her concerns, Leeds and others calling for the ban are backing the ordinance.
“While the ordinance is not ideal, it takes steps toward ensuring the incredible investment of neighborhood time and treasure into San Antonio’s historic districts will be conserved,” said Stella De La Garza for the San Antonio Conservation Society.
The comments reflected a growing concern over the number of Type 2 rentals and the knowledge that those who have paid hotel taxes are “grandfathered in" and exempt from density requirements.
“I understand their fear that no regulation of STRs will simply destroy many of their neighborhoods,” Councilman John Courage said. “And I believe that's the greatest motivation for many of them coming today and saying: ‘Well, it’s not perfect, but we’ll accept it.’”
Courage, who voted against the regulations, wants Type 2 rentals out of neighborhoods.
“For all of us that wish that Lyft and Airbnb and HomeAway and VRBO are somehow going to go away and somehow City Council has the power to make these things disappear, we don’t,” Councilman Manny Pelaez said. “I live in the real world. (The ordinance represents) the least imperfect option for us.”
Brockhouse voted against the ordinances, saying they went too far and violated property rights.
“This is a win for San Antonio hosts who have been calling for clear and fair rules for really over two years,” said Laura Spanjian, senior public policy director for Airbnb after the vote. The deal was also endorsed by HomeAway in an email.
The victory might be short-lived, as short-term rental policies are expected to be taken up in the next legislative session. A push for a statewide law failed in 2017.
“We fully expect that there be a proposal of some sort,” said Michael Shannon in response to council questions.
But if legislators again try to pass a statewide law, “What we want is in essence what happened in San Antonio,” Spanjian said.
Hotel Occupancy Taxes
While the law creates a registry and penalties for not getting a permit, it doesn’t provide a mechanism for collecting back taxes. Despite the new regulations, property owners are still required to submit occupancy taxes to the city, which is 9 percent of whatever users paid.
“If an STR operating and they do owe HOT tax and we become aware of it, we would contact that STR and work with them and collect that tax,” said Troy Elliott, director of the city’s finance department.
City officials have said they don’t currently have a plan to actively find and collect back taxes, yet. Currently, roughly 400 out of more than 2,000 short-term rentals are currently paying the tax.
Airbnb will not provide information on active renters, citing privacy concerns. It paid $15.3 million in taxes to the state in the aggregate. Spanjian said they are nearing a deal with the city to do the same, but the company’s request to waive back taxes for hosts on their platform was a sticking point.
“When we realized this was their last sticking point, which came up two to four weeks ago,” she said. “We called them and said we’re happy to waive that back tax agreement if that’s your only last issue.”
The city doesn’t know how many active STRs there are in San Antonio, and its estimates vary wildly from third-party vendors like AirDNA.
The city will propose during a Nov. 15 meeting working with a company that specializes in identifying active short-term rentals to ensure compliance with the new ordinance. Officials declined to say which company had been selected ahead of the meeting.
CORRECTION: The vote total has been updated to 8-2 in favor of passing the ordinance. TPR regrets the error.