Last month, San Antonio City Council voted unanimously to triple the permit fees that are paid by short-term rental (STR) operators, or property owners who host temporary visitors using online platforms such as Airbnb or Vrbo.
The decision came after Council members heard recommendations from a task force of local stakeholders that was convened in December 2023 to develop amendments to San Antonio’s STR Ordinance and address growing concerns about unpermitted STR properties, party houses, and the negative impacts of STRs on San Antonio’s residential neighborhoods. Participants of the task force included STR owners, representatives from the apartment association, hotel and lodging association, and housing advocates, including Texas Housers.
Historically, STR operators in San Antonio paid just $100 for a three year permit. Although the task force recommended City Council increase the STR permit to $300 for three years, Texas Housers urged Council to consider a further increase and, specifically, a higher fee for STR operators that live off-site. Ultimately, City Council voted to increase San Antonio’s STR permit fee to $300 for operators who live on-site and $450 for operators who live off-site for a three year period.
The proliferation of Short Term Rentals in San Antonio must be addressed as an affordable housing issue
The number of STRs in San Antonio has risen dramatically in the years following the COVID-19 pandemic, after which the country saw a spike in the popularity of Airbnb and similar single-occupancy vacation rental platforms. In 2022, San Antonio’s Development Services Department issued more than three times the number of STR permits that it issued in the previous year1City of San Antonio Development Services. (2023). FY 2023 Annual Report Short Term Rentals. https://docsonline.sanantonio.gov/DSDUploads/FY2023STRAnnualReport.pdf.. Currently, there are more than 3,200 permitted STRs operating in San Antonio, with an additional 1,200 to 1,500 STRs estimated to be operating illegally without a permit2Ghalioum, R. A. (2024, July 23). San Antonio sees steady rise in short-term rentals with 123 new permits monthly. KSAT San Antonio. https://www.ksat.com/news/local/2024/07/23/san-antonio-sees-steady-rise-in-short-term-rentals-with-123-new-permits-monthly/. The vast majority (77%) of STR permits are possessed by operators who live off-site3City of San Antonio Development Services. (2023). Short Term Rental Activity Report. https://app.powerbigov.us/view?r=eyJrIjoiZTVjZGM4YjAtZmNlZC00Nzg5LTllNDEtM2VlYzk3ZGY4NjdjIiwidCI6IjFhYjAyMTRmLWFjNGEtNDQwNy1hN2M2LTJlZjFlYjc2ZGFjNSJ9., many of whom are from out of state or work for large corporations that do not have a stake in protecting the integrity of San Antonio’s neighborhoods.
Because San Antonio is experiencing an affordable housing crisis where there is not enough housing to go around for all of the households who need it, this is highly concerning. It is essential to ensure that the proper controls are in place to prevent a proliferation of STRs from impeding our long term residents’ ability to achieve and retain housing stability.
During our time participating on the STR task force, Texas Housers compiled existing research on the impact of STRs on neighborhoods in other cities and conducted original data analysis regarding their impact in San Antonio’s neighborhoods. Research from around the country by Harvard Business Review, Economic Policy Institute, and other research institutions indicates that STRs have a tangible impact on the supply and costs of housing4Barron, K., Kung, E., & Proserpio, D. (2019, April 17). Research: When Airbnb Listings in a City Increase, So Do Rent Prices. Harvard Business Review. https://hbr.org/2019/04/research-when-airbnb-listings-in-a-city-increase-so-do-rent-prices;
Josh Bivens. (2019, January 30). The economic costs and benefits of Airbnb: No reason for local policymakers to let Airbnb bypass tax or regulatory obligations. Economic Policy Institute. https://www.epi.org/publication/the-economic-costs-and-benefits-of-airbnb-no-reason-for-local-policymakers-to-let-airbnb-bypass-tax-or-regulatory-obligations/. In Boston, academic researchers found that every 12 Airbnb listings in a census tract led to an increase in asking rents of 0.4 percent5Merante, M., & Horn, K. M. (2016). Is home sharing driving up rents. Evidence from Airbnb in Boston.. In New York, the expansion of Airbnbs led to a 1.4% increase in rents between 2015 and 2017, which equated to a $384 annual increase in rent for the median NYC renter6Wachsmuth, D., Chaney, D., Kerrigan, D., Shillolo, A., & Basalaev-Binder, R. (2018). The high cost of short-term rentals in New York City. A report from the Urban Politics and Governance research group, School of Urban Planning, McGill University, 2, 2018..
Because San Antonio’s housing landscape is significantly different from those of East Coast cities where the impact of STRs is well documented, Texas Housers collected data on the locations of STRs and rents in San Antonio between 2020 and 2022. A simple linear regression found that the presence of STRs had a small but significant positive correlation with increased rents at the census tract level.
On average, census tracts without any STRs saw an increase in median gross rent of 13.2% between 2020 and 2022, while census tracts with 50 or more STRs increased by 18.7%. We found that the presence of 10 STRs in a tract was correlated with an increase in rents of almost 1%. With a median rent of $1,189, this equates to an extra $120 a year. Because more than half of San Antonio renters are housing cost burdened and non-housing costs are increasing, this level of rent increase is significant and could lead to housing insecurity for San Antonians.
Prior to last month’s City Council vote to increase the STR permit fee, San Antonio was the cheapest city for businesses and individuals to obtain a permit to operate a STR in — by far. Recently, Galveston and Corpus Christi increased their permit fees from $50 to $250 per year. Marfa increased their fees from $150 to $500 in 2022 per year. Last month, Dallas’ fee increased from $248 to $404 per year. As the number of STRs has been rising, many cities in Texas have increased their permit fees. It was important for San Antonio to do the same and institute guardrails against explosive STR growth.
It is true that STRs constitute a small percentage of San Antonio’s total housing stock. However, 5,000 units of housing (the number of permitted and unpermitted STRs in San Antonio) is not a number to be minimized. There are more than 113,000 people on the waiting list for public housing, with approximately 1,000 being added every month7Arredondo, J. (2024, April 25). The need for public housing grows in Texas. Spectrum News 1. https://spectrumlocalnews.com/tx/south-texas-el-paso/news/2024/04/25/the-need-for-public-housing-grows-in-texas-. Every unit of housing counts — especially given the high cost of adding new units to our supply. As laid out in San Antonio’s Strategic Housing Implementation Plan, the City has a goal to build a total of over 12,000 new rental and single-family units. This could take nearly $3 billion to achieve. According to San Antonio’s Neighborhood and Housing Services Department, the average cost of a multi-family unit is $250,000. The average cost to construct a single-family home is about $240,000.
The preservation of existing housing units for San Antonio’s long term residents must be prioritized over making it easy and inexpensive for businesses to buy up our limited housing stock to host temporary visitors for profit. Texas Housers applauds San Antonio City Council for taking a step towards protecting the city’s residential neighborhoods from a proliferation of STRs — particularly those owned by out of state or large corporations — and encourages Council to continue to monitor STR levels and adjust the permit fee and other aspects of the STR ordinance as necessary.
- 1City of San Antonio Development Services. (2023). FY 2023 Annual Report Short Term Rentals. https://docsonline.sanantonio.gov/DSDUploads/FY2023STRAnnualReport.pdf.
- 2Ghalioum, R. A. (2024, July 23). San Antonio sees steady rise in short-term rentals with 123 new permits monthly. KSAT San Antonio. https://www.ksat.com/news/local/2024/07/23/san-antonio-sees-steady-rise-in-short-term-rentals-with-123-new-permits-monthly/
- 3City of San Antonio Development Services. (2023). Short Term Rental Activity Report. https://app.powerbigov.us/view?r=eyJrIjoiZTVjZGM4YjAtZmNlZC00Nzg5LTllNDEtM2VlYzk3ZGY4NjdjIiwidCI6IjFhYjAyMTRmLWFjNGEtNDQwNy1hN2M2LTJlZjFlYjc2ZGFjNSJ9.
- 4Barron, K., Kung, E., & Proserpio, D. (2019, April 17). Research: When Airbnb Listings in a City Increase, So Do Rent Prices. Harvard Business Review. https://hbr.org/2019/04/research-when-airbnb-listings-in-a-city-increase-so-do-rent-prices;
Josh Bivens. (2019, January 30). The economic costs and benefits of Airbnb: No reason for local policymakers to let Airbnb bypass tax or regulatory obligations. Economic Policy Institute. https://www.epi.org/publication/the-economic-costs-and-benefits-of-airbnb-no-reason-for-local-policymakers-to-let-airbnb-bypass-tax-or-regulatory-obligations/ - 5Merante, M., & Horn, K. M. (2016). Is home sharing driving up rents. Evidence from Airbnb in Boston.
- 6Wachsmuth, D., Chaney, D., Kerrigan, D., Shillolo, A., & Basalaev-Binder, R. (2018). The high cost of short-term rentals in New York City. A report from the Urban Politics and Governance research group, School of Urban Planning, McGill University, 2, 2018.
- 7Arredondo, J. (2024, April 25). The need for public housing grows in Texas. Spectrum News 1. https://spectrumlocalnews.com/tx/south-texas-el-paso/news/2024/04/25/the-need-for-public-housing-grows-in-texas-
