San Antonio passes new short-term rental law

The San Antonio City Council has passed a law that will regulate short-term rentals in the city for the first time.

The new regulations require short-term rental operators to register with San Antonio and pay a $100 fee. Hosts are also required to pay a $100 renewal fee every three years. The city estimates it will receive $320,000 in fee-related revenue over the next four years.

The ordinance also limits how many “type 2” short-term rentals can exist within a certain area. Type 2 properties are rented out for short terms without the owner present. Only one type 2 rental is allowed in a multifamily development with fewer than eight units. In larger multifamily buildings and on residential blocks, type 2 rentals are limited to 12.5 percent of housing. Once the density limits are reached, prospective short-term rental operators can ask for an exception from the Board of Adjustments.

The new law also prohibits short-term rentals from being used for large events or for hosts to provide food and beverages to guests. Properties that have received city housing incentives are barred from operating as type 2 short-term rentals. 

The new rules go into effect immediately, though short-term rental operators have 90 days to register with the city. Three or more violations of short-term rental rules can lead to revocation of a short-term rental permit.

Short-term rental operators are required to collect San Antonio hotel occupancy taxes from guests and pay them to the city. Currently, the city collects the tax from 363 short-term rental properties, out of 1,600 estimated to be operating in San Antonio. The city is looking for a contractor to identify short-term rental operators who fail to register or pay taxes.

San Antonio short-term rental hosts are also required to pay state and county lodging taxes. Airbnb collects the state occupancy tax on behalf of its short-term rental hosts, but not county or city taxes. Other short-term rental platforms, such as HomeAway and VRBO, do not collect taxes for their short-term rental hosts in Texas. MyLodgeTax can help San Antonio short-term rental hosts comply with all short-term rental tax obligations.

Airbnb and HomeAway praised the new framework.

“HomeAway commends the short-term rental task force and city staff for the many months of open dialogue and collaboration that went into this proposal,” a HomeAway spokesman said in a statement. “The outcome of that process is a regulatory framework that ensures vacation rental owners can operate responsibly and with accountability.”

The issue of how much cities can curb short-term rentals has become a statewide issue. In recent years, bills have been introduced to the Legislature that would limit the power of cities to ban or regulate short-term rentals. None has yet passed.

In 2016, a lawsuit was filed against Austin’s short-term rental law by the Center for the American Future, a legal arm of the Texas Public Policy Foundation, representing short-term rental owners. The legal challenge has received the support of Texas Attorney General Ken Paxton and is winding its way through the courts.

Austin has one of the oldest and most restrictive short-term rental laws in the state. The city plans to phase out certain types of short-term rentals altogether and place limits on how many short-term rentals are allowed in certain areas.

This summer, the Texas Supreme Court ruled in favor of a Texas homeowner whose homeowners association tried to restrict his short-term rental activity. The decision may have wider ramifications in the controversy over Texas short-term rentals.