An update on San Antonio’s short term rental landscape on Thursday ended with City Council members seeking a process that could ultimately strengthen the existing ordinance to more forcefully handle scofflaw properties.
Council members expressed concern over the percentage of short-term rentals (STRs) that are not owner-occupied, those that remain unpermitted and so do not pay taxes, and how the industry is affecting San Antonio’s long term rental stock.
Just over 3,200 properties in San Antonio are currently permitted as short term rentals, according to the update from Development Services Director Michael Shannon to the City Council’s Planning and Community Development Committee. Of those, 78% are not owner occupied, or what the city calls Type 2 STRs. The remainder are Type 1, or properties where the owner lives onsite.
The vast majority of all STRs are in council District 1, with almost 900 units, and District 2, with close to 600.
Hotel occupancy tax, or HOT, revenue collected from permitted STR units brought in about $5.5 million in fiscal year 2023, Shannon reported, and $3.9 million the prior year. Since the ordinance went into effect in late 2018, the tax has generated $14.4 million.
But many unpermitted units remain. Data from San Antonio’s new STR vendor, Avenu, which is charged with collecting the tax and bringing unpermitted properties into compliance, estimates that between 1,200 to 1,500 units are operating illegally. Shannon said that’s a compliance rate of about 70%.
AirDNA, a vacation rental data analytics company, estimates 6,337 current total available listings, which would mean the percentage of those operating without a permit could be closer to 50%.
Development Services has been increasing the number of investigations into potential violations each year since the ordinance went into effect.
“Enforcement has been challenging,” Shannon acknowledged, “but we’ve been ramping up.”
In fiscal year 2023, it investigated 1,459 properties, including 346 that were the subject of complaints made to the city. Most of the other investigations were prompted by information provided by the city’s previous vendor and since July, Avenu, which scours dozens of STR websites, like Airbnb and VRBO, to find operators who aren’t complying with the ordinance or keeping up with tax payments.
The investigations found 947 properties with violations. The city revoked 932 permits over the same time period, most for HOT tax delinquency and ordinance violations. About 170 code violations also were filed against owners, roughly half of which have been adjudicated.
Shannon noted that last month, Avenu launched an anonymous, 24-hour tipline to take STR complaints, 855-431-4818. Residents can also continue calling 3-1-1.
Before his presentation, representatives of the Tier 1 Neighborhood Coalition and Shelley Galbraith, chair of the Short Term Rental Association, which advocates on behalf of STR owners, urged the committee to revive former District 1 Councilman Mario Bravo’s request to form a task force that would review the ordinance.
“There is a pressing need for enhancements to strengthen the existing ordinance,” said Galbraith. She noted that other cities mandate that platforms like Airbnb verify permit numbers in listings, as well as collect and remit the taxes.
A representative from the city’s finance department said later that relying on the platforms to collect and remit meant losing out on the transparency offered by third parties such as Avenu, which also shares which properties have paid and how much, allowing city staff to follow up on scofflaws.
But council members keyed into the speakers’ other concerns, such as the revenue lost from unpaid HOT taxes and the disruptions to neighborhoods, and asked Shannon to return to the next meeting with the outline of a plan that could convene stakeholders, including STR operators and neighborhood groups, to review ways the ordinance might be strengthened.
Councilman John Courage (D9) specifically called out the non-owner-occupied properties that make up almost four-fifths of all STRs in San Antonio.
He said while he supports those owners who live onsite and may rent out a room or a casita to help defray costs, “almost 80% of them are businesses making money in residential communities, absentee owners who have no respect for the community or the neighbors who live in that community.”
Councilwoman Teri Castillo (D5) noted studies that have found that high numbers of STRs can raise rents on long term rentals, as those homes are taken out of the pool of available housing. She suggested boosting the cost of the permit, which is currently $100 for three years, to cover not only enforcement costs but also to potentially help mitigate the industry’s impact on San Antonio’s housing stock.
“It is costing us in the millions to make up for that housing,” she said, “so when I hear $100 for three years, I think that’s really insulting to San Antonio taxpayers.”
