Proposed changes to San Antonio’s short-term rental ordinance that could reduce the number of scofflaws who don’t pay local taxes and beef up enforcement against party houses are headed to City Council.
Before that, the updated ordinance will be presented to the Board of Adjustments and council’s Planning and Community Development Committee next week.
That committee last fall charged the Development Services Department, which enforces the ordinance, to form a task force to develop updates to San Antonio’s short-term rental ordinance based on continuing concerns with unpermitted properties and party houses.
Task force members included representatives from each council district, short-term rental owners or operators, San Antonio’s realtor community, apartment association, hotel and lodging association and housing advocacy groups.
If both bodies approve the proposed amendments, the full council is expected to vote on the updated ordinance as early as May, with the new HOT tax payment provisions taking effect after a 90-day training period. The rest of the ordinance would take effect within ten days of council approval.
As of March, San Antonio was home to almost 3,000 permitted short-term rentals (STRs) per the city’s dashboard, and city officials believe as many as 1,100 more may be operating without permits, meaning they do not pay the city’s hotel occupancy, or HOT, tax.
HOT taxes paid by permitted STRs have brought in $2.1 million so far this fiscal year and almost $8.2 million over the prior two fiscal years.
More than two-thirds of all permitted STRs are what’s known as Type 2, meaning the owner of the property doesn’t live on-site. Many of these properties are owned by investors and managed by property management companies. They earn the most complaints from neighbors, according to city data, and are of greatest concern to council members.
Development services held two public meetings earlier this week to review the proposed changes, which include raising permit fees from $100 for three years to $300 over the same period and requiring all listings on platforms such as Airbnb and Vrbo to include permit numbers.
Those platforms would also be responsible for remitting HOT taxes to the city (which in turn sends the county its portion of the tax), rather than having operators make the payments directly to the city.
Airbnb and Expedia, which owns Vrbo, had seats on the task force and have agreed to scrub listings without permit numbers and remit the HOT tax, city officials said.
Operators must still file monthly income reports with Avenu Insights & Analytics, which the city hired last year to collect, monitor and ensure compliance of STRs for $3.5 million over three years.
At Wednesday evening’s virtual meeting, some STR operators complained about still having to file those reports if the platforms were going to be remitting the taxes directly to the city.
Avenu will still monitor the platforms for non-compliant properties that advertise without a permit, which allows city staff to launch investigations and get those listings removed, said Melissa Ramirez, deputy director for development services, who shepherded the task force through its charges. Avenu also hosts an anonymous, 24-hour tip line to take STR complaints at 855-431-4818.
Residents can also continue calling 3-1-1.
STRs that receive three confirmed code violations (ie convictions by municipal court) within three years will, if the changes are ratified, result in a series of administrative actions leading up to permit revocation, including potentially meeting with the director of Development Services.
The current ordinance revokes permits for three violations within six months.
Logan Sparrow of the city’s development services department said at Wednesday’s meeting that the city had not revoked a single permit under that rule, in part because it takes so long to adjudicate citations that the clock would reset on problem properties. The proposed longer period would allow citations to move completely through the process, he said. Code violations can include excessive noise, illegal parking, unkept or unsafe properties.
The city has and does revoke permits for other reasons; it revoked 1,366 in FY 2023 for HOT tax violations, other ordinance violations, changes of ownership and owner request, according to its 2023 STR annual report.
When a meeting attendee asked about neighbors unfairly calling code compliance on an STR “they just don’t like,” Sparrow said the citations must be convictions to count against the total.
Other proposed changes include requiring STRs to post the city’s quiet hours in their outdoor locations, allowing LLCs to more easily update their point of contact for properties, who must be available 24/7, and permit denial for those who attempt to use falsified information in their applications.
Shelley Galbraith, chair of the Short Term Rental Association of San Antonio who sat on the task force, said she thought the city did a good job bringing diverse viewpoints to the table and coming up with amendments that “everyone could live with.”
She praised the city for taking a measured approach to STR regulation, noting that other Texas cities that have attempted more draconian measures now find themselves unable to enforce their ordinances.
Mike Rust, who represented the San Antonio Apartment Association on the task force, agreed. “The end product really gets us to an appropriate balance, supporting the hospitality industry, preserving neighborhoods and respecting the rights of property owners,” he said.
Housing advocates had hoped to see higher permit fees for Type 2 STRs to raise the barrier to entry for corporations that buy up housing to turn into STRs, said Erin Hahn of Texas Housers, who sat on the task force.
San Antonio’s permit fees are between 2.5 and 8 times lower than those of other Texas cities, she said. “Given San Antonio’s affordable housing crisis, we wanted to see the barrier to entry raised” on Type 2 properties.
The Board of Adjustments, which acts as an appeals body and grants exceptions to city development rules, will be asked to vote on the proposed amendments Monday before they go to the council’s Planning and Community Development Committee on Thursday.
Both meetings are open to the public, take public comment and can be watched via livestream.
