San Antonio officials are looking to crack down on short-term rental owners who aren’t paying the city’s hotel tax.
Josie Norris/San Antonio Express-News
San Antonio Express-News
Megan Rodriguez
San Antonio City Council and community members want to crack down on short-term rental owners who are operating without a permit and not paying taxes, but tangible change won’t come until after a task force deliberates over the matter for months.
Finding ways to squeeze hotel occupancy taxes and permit fees out of all operators is just part of what a task force will look into. Other changes could be coming to the city’s short-term rental ordinance, including higher permit fees and stricter rules regarding how many short-term rentals can operate in a concentrated area.
Short-term rentals — typically booked through sites including Airbnb and Vrbo — are sleeping areas rented overnight for fewer than 30 days but not less than 12 hours.
About 70% of San Antonio's short-term rental operators have permits and pay hotel occupancy taxes, said City Development Services Director Mike Shannon. That estimate is based on figures provided by Avenu, a company that scours the web for listings from people who do not have a permit with the city. There are about 3,200 permitted operators in the city. Avenu estimates there are another 1,200 to 1,500 short-term rentals that are out of compliance.
The number of people able to operate illegally is frustrating to owners who follow the rules, said Shelley Galbraith, chair of the Short Term Rental Association of San Antonio, a nonprofit that educates and promotes adherence to the city’s short-term rental ordinance.
“Their dedication to compliance and being good operators is often overshadowed by the disheartening ease with which some circumvent the very ordinance designed to protect their livelihoods and ultimately protect our neighborhoods,” Galbraith recently told the council’s Planning and Community Development Committee.
Galbraith, who has operated a short-term rental on her property in the King William neighborhood for seven years, said some neighborhoods are “filled with” unpermitted short-term rentals, causing problems with parking and noise. On top of that, she said she worries that the city is missing out on millions of dollars in uncollected hotel tax revenue.
Since the city’s ordinance went into effect in November 2018, San Antonio has collected $14.4 million in hotel occupancy taxes from the rentals. Last fiscal year, San Antonio saw the most revenue in the ordinance’s history — $5.5 million.
The city’s finance department collects hotel occupancy tax at a rate of 9% for the city and 1.75% for the county. Operators also pay another 6% to the state. The department does not have an estimate of how much the city is losing out on due to operators not paying taxes.
The Planning and Community Development Committee — made up of five council members — asked Shannon to return in six months with task force recommendations for adjusting the ordinance. Shannon said the task force will be made up of about 20 people with representation from operators, neighborhood leaders, platforms like Airbnb and Vrbo, among other stakeholders.
Increasing how many people get a permit and pay their taxes is a top priority for the task force.
For the first two years the ordinance was in place, enforcement was lax as the city focused on trying to inform people about the new rules, Shannon said. But officials are getting stricter, opting to revoke more permits rather than respond with education. The city has revoked a total of 1,366 permits over the course of the ordinance's life, with 932 of those being pulled in the last fiscal year.
If a property is found to be without a permit or receives a complaint from the community for problems regarding parking, noise or parties, Shannon said his department inspects. If there’s a violation, the operator is given 10 days to fix the problem before being issued a citation. A municipal court judge ultimately decides how much to charge a violator, but operating without a permit can cost someone up to $500 per day that the property is in violation.
Shannon’s department investigated almost 1,500 rentals in fiscal year 2023 and found 947 of those operators to have violated the city’s rules. Most of the operators address the issues when they hear from the city, but Shannon said 170 citations were issued last fiscal year for various problems including operating without a permit.
To get a permit for a short-term rental, operators must have property insurance, a fire extinguisher, and working smoke and carbon monoxide detectors. They are required to post a permit, the floor plan and evacuation route in the unit. The city doesn't inspect if people follow those rules unless there is a complaint or suspicion of a problem. Each permit costs $100 and must be renewed at the same fee every three years.
Multiple council members have said they want the city to increase the fee to operate a short-term rental but haven’t suggested by how much.
Shannon said the fee was designed to cover the department’s cost of sifting through applications and investigating bad actors.
Development Services spokeswoman Ximena Copa-Wiggins said $100 does not cover those expenses, but said the department doesn’t have an estimate of how much it falls short by or how much it needs to charge to cover those costs.
District 5 Council Member Teri Castillo said she wants the fee to be increased and the funds to go toward improving the city’s affordable housing stock, which she said can shrink as short-term rental units rise.
“It’s costing us in the millions to make up for that housing,” Castillo said. “When I hear $100 for three years, I think that’s really insulting to San Antonio taxpayers.”
District 8 Council Member Manny Peláez said he is especially frustrated over “party houses” that can crop up with short-term rentals and said he wants more focus on closing them down.
Shannon said the city already revokes permits when a property owner hosts a large event such as a wedding or reception, but does not currently have a rule in place for if a person invites a handful of friends over to their rental.
When a permit is revoked, it is taken away for one year for a property owner at a specific address. In theory, an owner could get away with running a different rental property even after their permit was revoked at one site. The task force will look into potentially adjusting that, though Shannon said he hasn’t seen instances of someone using that loophole.
Reducing the number of rentals in a given area is also a concern for the task force to look into.
Most short-term rentals in San Antonio have operators who do not live on site. The city ordinance restricts the number of these rentals to 12.5% of units on one side of any given block. District 3 Council Member Phyllis Viagran wants that dropped to 10% or less.
Council Member John Courage said he wants to take it a step further. There are no restrictions on the number of owner-occupied short-term rentals that can operate in a neighborhood, which Courage said could lead to some people being totally surrounded by rentals. Courage said he hopes the ordinance can have a distance requirement worked in to prevent too many rentals being bunched up together.
“That’s something this committee needs to consider to protect the integrity of neighborhoods,” Courage said.
The committee’s effort to shake up the short-term rental ordinance has been on some council members’ minds for some time. Former District 1 Council Member Mario Bravo put forward a policy recommendation last year that called for a task force to look into revising the ordinance; but the request never got assigned to a committee, and Bravo lost his reelection bid over the summer.
Multiple members of the Planning and Community Development Committee, including Chair Adriana Rocha Garcia, had signed on to the request though. Rocha Garcia ultimately put the topic of short-term rentals onto the committee’s agenda.