A short term rental property located in Government Hill near the Pearl has been a popular location for travelers.
A short-term rental property in Government Hill lies in City Council District 2. Districts 1 and 2 have 47% of all short-term rental properties in San Antonio. Credit: Scott Ball / ISF FORUM

San Antonio City Council approved amendments to the city's short-term rental ordinance Thursday that will increase fees for three-year permits on rental properties not occupied by owners from $100 to $450.

That's higher than what a task force convened to review the city's existing ordinance proposed but less than a council committee's suggestion of $975.

Owner-occupied short-term rental permits will go from $100 for three years to $300.

Other amendments to the ordinance included moving some of the regulatory onus onto platforms such as Airbnb and Vrbo. They'll now be required to remove listings that do not include a permit number and to remit hotel occupancy taxes directly to the city.

The goal there is to more effectively crack down on unpermitted rentals, which do not pay the hotel occupancy tax of 9% to the city and 1.75% to Bexar County. The city also contracts with Avenu, which is charged with bringing unpermitted properties into compliance. Last fall, the company estimated 1,200 to 1,500 units could be operating illegally.

Since the ordinance took effect in 2019, the city has collected almost $14.4 million in hotel occupancy taxes from short-term rentals.

The increased permit fees would cover the cost of regulating short-term rentals and could fund a dedicated code compliance officer, something the city does not have, said Development Services Director Michael Shannon.

Several council members expressed interest in having a dedicated code compliance officer who could respond to so-called party houses, which generate the lion's share of complaints by neighbors.

Most party houses are not owner-occupied, called Type 2 rentals in the city's ordinance. Of 3,164 permitted short-term rentals in San Antonio, 77% are Type 2; the rest are Type 1, or owner-occupied.

A graph shows active short-term rental properties by council district. Credit: Courtesy / City of San Antonio

Almost half of all short-term rentals — 47% — are located in Districts 1 and 2.

Council member Jalen McKee-Rodriguez (D2) described the fee increase for Type 2 rentals as a way to change the incentive structure for “profit-seeking companies to take a scarce resource like housing and pimp it out as a small-scale hotel business.”

He supported the $450 amount but said he'd prefer “a much higher fee.”

Council member Teri Castillo (D5), who suggested the $450 amount, pointed out that a “wealth of case studies” has found a positive correlation between the number of Airbnb listings and the price of long-term rentals in a given neighborhood.

Come to any District 5 neighborhood association meeting, she said, “and what comes up is housing insecurity and the lack of access to affordable housing.”

Councilman Marc White (D10) said he will always land on the side of allowing property owners to do what they want with their properties, until those uses impinge on public safety, and “making sure our neighborhoods are a peaceful place to live for our neighbors.”

Excessive permit fees can be considered an unconstitutional tax in Texas if they go beyond recovering costs, he said, which the $975 would likely do. But after getting assurance from Shannon that the department could likely hire a dedicated code officer with $450 permit fees, Whyte agreed to support the changes.

Another approved amendment to the 2018 ordinance will allow the Development Services Department to require a “compliance meeting” with the operators of homes that continually violate the ordinance. The goal of the meeting would be to help the operator come into compliance and give the city the ability to revoke the permit if noncompliance continues.

In fiscal year 2023, 1,366 permits were revoked for delinquent tax payments and other violations.

There aren't too many problem party houses, Shannon said, but those that do exist “really disrupt the neighborhood significantly, especially the immediate neighbors on the block.”

He promised to include the cost of a dedicated code compliance officer as part of the department's overall fiscal year 2025 budget proposal.

City Council's Planning and Community Development Committee asked the department last fall to convene the 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.

This story has been updated to correct the increase in permit fees for Type 2 short-term rentals.

Tracy Idell Hamilton covers business, labor and the economy for the ISF FORUM.