Short-term rentals have been creating quite the stir in San Antonio. I am a neighborhood advocate, a dad to three young children, and the owner of a non-owner-occupied short-term rental. I live in a near-downtown neighborhood with varying styles houses of built in the early 1900s, and with lots of character.
Our non-owner-occupied, or Type 2, short-term rental is on the block behind the house we live in – we can see it from our backyard. On one side of it is a vacant home, on the other side and across the street are homes with great neighbors. My wife and I bought the house last year as an investment toward retirement. Our kids are in elementary school, so we hoped the house would provide us some extra income for things like sports, art classes, or summer camps.
The house we bought had been “flipped.” We originally intended to rent it out with a traditional long-term lease. We considered short-term rental as an option, but were wary of the unknown. When we mentioned short-term rental to neighbors, they all encouraged us, so we made a significant investment in furnishing the house and decided to give it a try.
A task force has been working on a new ordinance to address this new business model within our neighborhoods. Having had the opportunity to read the draft ordinance and hear the concerns of many fellow neighborhood activists, allow me to share my perspective on some of the issues.
Argument: Type 2 short-term rentals are party houses that create noise and parking problems
Noise and parties were one of the reasons we opted to use the house as a short-term rental instead of looking for a long-term tenant. We felt short-term guests would create less wear and tear and that we would have more control over who was in the house. Platforms like AirBnB, VRBO, and Home Away include rating systems that evaluate both guests and hosts.
Hosts can set rules prohibiting parties and specifying parking rules. Generally, short-term guests will stay a weekend to a week max. Hosts who get loud or unruly guests can turn to the rental platforms for recourse; in dire cases, guests may be asked to leave the property. However, there’s ample motivation for guests to be on their best behavior because they know hosts will rate them following their stay. Conversely, living next to a loud long-term renter can be a big problem, and it can take more than a year to evict an un-neighborly tenant.
Argument: Living next to a Type 2 short-term rental is like living next to a vacant house
The argument here is the lack of a consistent neighbor who is in the house every day. Most short-term guests stay over the weekend, so when a house is rented Thursday through Sunday each week, it is vacant Monday through Wednesday. The argument that the house is unoccupied half the time doesn’t hold water for several reasons.
First, a Type 2 short-term rental looks nothing like a vacant house. Of the seven vacant houses on the same block as our rental, most have peeling paint and overgrown yards. Some are boarded up. They attract graffiti and crime and do not contribute to the neighborhood.
Our rental has a maintained yard, new paint, and clean windows. On the days it is unoccupied, my wife and I are on the property cleaning and doing maintenance. All of the neighbors know us and our kids, who go with us to rake leaves and sweep the porch. We keep it in top condition because we want good ratings from our guests.
Second, the vacant-house argument reaches into the realm of trying to control how neighbors use their home. If the house was occupied by a long-term renter or owner who travels three days a week for a job, neighbors could not possibly expect the City to entertain complaints about the house being vacant.
Argument: Most Type 2 short-term rental owners are out-of-town corporations
My wife and I are among hundreds of regular people across the city operating Type 2 rentals with care and thought. We are sensitive to our neighbors’ concerns, and we care about the neighborhood our rental is in. Most short-term rental owners only list their homes for one or two years, which implies a temporary financial reason for doing it.
The proposed ordinance could prove costly for Type 2 short-term rental owners and seemingly aims to force regular folks like me out. They are so cumbersome that people who operate short-term rentals in addition to their full-time jobs are unlikely to follow them. They may stop hosting, which would leave those out-of-town corporate hosts without local competition. Local hosts like me spend their money in San Antonio, and we always recommend local businesses to our guests. If we are all driven away by burdensome permitting requirements, appointments with the Board of Adjustments, and excessive insurance policies, only the corporations will be left, and that money won’t go back into San Antonio’s economy.
Argument: Type 2 STRs contribute to San Antonio’s housing crisis
We paid market rate for the house we rent out short-term. If we hadn’t, someone else would have – either way, it would not have been classified as “affordable.” I know a Type 2 short-term rental owner who tried to sell his house. It sat on the market for nearly a year before he turned to short-term rental so as to cover the mortgage. Most Type 2 rentals are like mine: renovated, decorated, and in high-demand areas of town. The investor who flipped our house didn’t ask us if we planned to live there before selling it to us. Short-term rentals are not the solution to affordable housing, and they are not the cause of the shortage.
The City says we are in a housing crisis; yet two, quarter-mile long blocks in my neighborhood, one of San Antonio’s most rapidly gentrifying areas, contain 22 vacant units that I know of. These houses sit empty while Bexar County continues to collect property taxes on them every year.
Rather than attack Type 2 short-term rental owners, who maintain and use their properties, we need to shift focus to the real elephant in the room: our out-of-control property taxes. Type 2 owners not only pay property taxes, some also pay City Hotel Occupancy Taxes. The City could offer owners tax incentives to put renters into vacant homes. Many of them need repairs and some are tied up in title issues. The City and Bexar County Appraisal District could help by assisting owners in resolving title issues and offering tax breaks to reinvest in the property. Getting renters into vacant homes is a surefire way to affordably ease the housing burden we are currently facing. The City has already acknowledged that the most affordable housing we have is the existing housing stock.
The issue is complex, but short-term rentals can, and in many cases do, benefit neighborhoods. Both lawmakers and neighbors should use caution in how hard they push for and against regulation through this ordinance. But as a short-term rental host and neighborhood advocate, I would like to see locals – not out-of-town corporations – flourish within neighborhoods and benefit San Antonio as a whole.
Short term rentals are a great option to have that improve the fabric of the city. They need to conform to the same rules and standards and pay the same tax/fee that their direct competitors the hotels are required to, or the hotels should be able to function under the same standards as short term rentals. Otherwise, it’s public interference with a competitive market. And for what purpose or benefit? This article helps in thinking about these issues.
The same should be done with ride hailing that compete with taxis. Continuing the unfair regulations on just the taxis are harming the taxis.
This same thing will occur in the health insurance market and probably gun laws as states compete for a race to the bottom.
There are legitimate reasons for some regulations and fees, and many times there aren’t (or they are outdated). We should be having this discussion with a full review of costs and benefits. Thanks for the article, as it contributes to understanding.
If you’ve been paying the hotel tax like you’re supposed to, you should have no trouble getting it permitted under the new ordinance as an existing Type 2.
This is the best article I have read on this topic because every argument is explained and justified and every proposed rule by the city is logically debunked. Last year, I traveled 5 months (two continents) outside the USA. My home in San Antonio was unoccupied that whole time. And 80% of the time while traveling, I stayed in “whole home” or “whole apartment” rental units with “no parties” being specified in the rental contract. It was great being a “local” everywhere I went. As the writer above has said, he gets to review every renter and that affects decisions by other owners when contacted by the same people; I never have a problem finding a place to rent, because my reviews are top-notch. And most renters are not going to accept requests to rent from anyone who has been reported as having had a party. I especially like the writer’s argument about the short-term rental units NOT being ones that would ever be occupied by people needing affordable housing; I would never rent a short-term rental in the condition that would classify it as an affordable property for low-income residents. Short-term rental units in that condition wouldn’t get many takers and wouldn’t stay on the short-term rental list long because of a lack of income. But they wouldn’t sell for an “affordable” price, either.
You must have not read the actual rules proposed by the city for STRs. I am an STR host as well and most of the rules being implemented have nothing to do with what this article talks about. This articles covers reasons why people want STRs to be regulated but the regulations themselves do not address (or barely address) nor directly solve the problems. But the regulations would make those who don’t have the best of intentions think twice before becoming hosts. The few regulations that do address the reasons covered above wouldn’t affect any host who claims and is truly trying to run a respectable side business. If the author of this article actually does keep his guests from being nuisances for his neighbors, then any nuisance regulation wouldn’t affect him. He would only have to worry if the truth is that he let’s his guest cause all sorts of nuisances without recourse.
Most of the rules being proposed have to do with safety and making sure taxes are collected.
Thank you Nick, for your thoughtful presentation. In general I am still opposed to Type 2 STRs, but you’ve definitely given me a cud to chew on for a bit, while I formulate a rebuttal. And thank you RivardReport, for giving him a platform. Who knows, maybe I’ll change my mind partially or wholly!
STR2s should be banned from residential neighborhoods, and the B&B limits should be applied to STR1s to prevent whole-sale blocks being turned over to de facto hotels. One block in King William has seven non-owner occupied units; another street in Lavaca has five. None of the subject buildings were derelict or subject to demolition by neglect. They simply happened to be located close to tourist destinations. Now they contribute absolutely nothing to the neighborhoods. In these neighborhoods, what was once affordable housing has been turned over to STRs because the property owners can make three times as much money doing so. Not all neighborhoods are created equal, and a blanket rule that doesn’t recognize the vulnerability of some is no solution.
Great article, Nick. Thank you for addressing these in such a respectful way. You and the DATE crowd have my vote!
The idea that there is housing shortage in San Antonio is laughable. I live in Southtown and a lot of land and house is vacant and/or derelict. May be the city should impose a tax on vacant properties just like imposed on vacant buildings in downtown. This will push the investors/land-bankers to sell their property and provide more inventory in the market.
Truly vacant properties in the historic districts are already subject to a registration system designed to get the properties on the market.
http://www.sanantonio.gov/Vacant-Building
I’m a short term owner.. My home is clean and well kept. I want to have my home rented so I maintain it and try to keep my super host status every quarter. I have high standards to maintain and my reviews continue to keep my listing in demand. I’ve updated my home from a run down eye soar to a beautiful little home.
I love to rent Airbnb and I am Airbnb home owner.
Nick, if you are against a City ordinance to regulate short term rentals by home owners in the same neighborhood, I agree with you. I trust that my neighbors will select good short term renters most of the time. If a short term renter, or any renter, is a noise or health violator, the violator can be reported to the City. We do not need new City ordinances that may simply increase our taxes and justify increasing the pay of our City staff. The City probably did not have sufficient staff when it did nothing when my condo tenant complained to the City about another tenant washing dog feces from the patio unit above to my tenant’s patio below. If short term rentals by home owner is a serious problem, the State of Texas should amend state hotel law to include home owners.
I live in a dumpy neighborhood in the inner NW side of SA. There is nothing of any visitor interest nearby, except easy access to 410 and 10 to get someplace else in SA easily.
The house next to mine became a short-term rental about a year ago. I love having a STR as a neighbor. Most of the time, the house is empty. When occupied, the tenants rarely spend much time there other than to sleep. They rarely use the outdoor space. Only once have I been disturbed late at night (a group arrived after midnight and were talking loudly in the driveway as they unpacked their car. I asked them to lower their voices. They did.)
The only neighbors I have any complaints about are homeowners. One guy behind me has bare lights all around his house that illuminate his yard — and the yards adjoining (mine and three others) — like an airport landing strip. Blinding! And he illegally shoots powerful fireworks on several occasions during the year. He lets his dogs bark endlessly despite several neighbors’ complaints. He is an inconsiderate neighbor. I wish someone would turn his house into a STR.
The previous owner of the house next to mine (now a STR)
often had post-2:00 am parties in their backyard (he’d round up some of his friends after the bars closed). A different set of occupants (also owners) allowed their 20-something son and his friends to play basketball in the driveway well after midnight right outside my bedroom window. Five young guys playing basketball is NOT a quiet activity.
The STR next door has a neat appearance — the exterior is maintained, the landscape & yard well tended. I can’t the say the same for many of the owner-occupied homes in my ‘hood.
Short-term rentals with the owner offsite should be banned. I live in the King William Historic District. One of the main reasons I bought here is because of the emphasis on residential integrity. I know all of my neighbors and we depend on each other for support and surveillance. We do not want strangers coming and going nearby without a resident owner. If people want/need income from short term rentals, they need to consider other parts of town.
The biggest difficulty with short-term rentals is that they are taking workforce and affordable housing out of the inventory. I live in St. Augustine, Florida, a city which absolutely requires blue-collar workers in order to run its tourist industry. But if there is no housing for those workers, how can they live here? We are an extremely small community with no bedroom communities where workers can live and commute to their jobs.