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AirBnB in Texas

The Rivard Report offers a useful overview of this growing service.

With success comes regulation and Airbnb, the wildly popular “sharing economy” website that allows users to rent out portions of their home to adventuresome travelers, has had more than its share of success. Recently valued at $13 billion, the company has more than 340 listings in San Antonio alone.

(Read more about local Airbnb operation in Part One of this series: The Rise of Airbnb in San Antonio.)

Airbnb’s success hasn’t escaped the notice of government officials, in Texas and elsewhere. Concerns about health, safety, and taxation have led some cities to begin efforts to regulate residential rentals.

Barcelona, New Orleans, San Francisco, and Malibu have conducted investigations into violations of zoning laws. Amsterdam now collects hotel tax on Airbnbs.

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In 2014, Austin introduced an ordinance that requires short-term rental owners to obtain a license from the city. There is a $285 application fee, plus an annual renewal fee, and owners must submit proof of property insurance and payment of the city’s Hotel Occupancy Tax. They also must maintain a Certificate of Occupancy or proof of a certified inspection. The city intends to limit the number of homes that can be rented in a given building or neighborhood, and has placed a cap on licenses for properties not occupied by the owner.

The Airbnb website offers guidance on existing city regulations nationwide, including those in Austin.

Changes are coming to Texas beyond Austin. Cassandra Matej, executive director of the San Antonio Convention and Visitors Bureau, said that the Bureau is, of course, aware of Airbnb.

“We support anything that makes the San Antonio vacation experience safe and unforgettable,” she said, acknowledging that for some of the millions of visitors to the city each year, “that might mean researching alternative lodging, within legal boundaries.”

That final clause is a significant one. Legal boundaries may be changing in the near future. Scott Joslove, President and CEO of the Texas Hotel and Lodging Association, said his organization is not concerned with people who rent out rooms in their primary residence, but does oppose those who buy or rent properties specifically for the purpose of leasing them to overnight guests. Austin’s measures should serve as a model ordinance, he said, adding that the Association is working with other major cities to introduce registration, licensing, and occupancy tax to residential rentals.

In February, Councilmember Ron Nirenberg (D8) said “public safety” must be weighed against “letting the free market work,” but health and safety concerns seem little more than a front for the issue of taxation.

To date, Airbnb rentals have not been subject to San Antonio’s 6% Hotel Occupancy Tax. Proposed legislation could change that. House Bill 1792, authored by state Rep. Drew Springer (R-Muenster), seeks to legally define and regulate residential rentals. The bill expands the definition of “commercial lodging establishment,” which already includes hotels, motels, and inns, to encompass residential short-term rental units.

The proposed legislation would “characterize and treat a residential short-term rental unit in the same manner as a hotel for purposes of consumer protection, public health and human safety, taxation, licensing, and zoning.”

That means at least some Airbnb operators in Texas would have to adhere to same regulations as hotels, including requirements for the submission of water samples, regulation of appliances, and sanitation.

The bill’s wording is vague, and might exempt individuals who only rent our rooms of their primary residence, where the host is generally present for the duration of the stay. Individuals operating free-standing Airbnb venues, however, would not be exempt.

I blogged about AirBnB in Houston last August. According to the first story in this two-part series, there are about 900 AirBnB listings in Houston. Compared to the 75,000 or so hotel rooms in the Houston area, that’s pretty small. That said, I do expect the city to address this issue sooner or later – there’s too much hotel tax revenue at stake to leave it unaddressed. I’m actually surprised that AirBnB didn’t make like Uber and Lyft and lobby the Lege for a bill more favorable to them than Rep. Springer’s. (I’m assuming the characterization of his bill, and my understanding of it, are accurate.) I still think AirBnB is more likely to be a niche player in Houston, where business travel is what brings many of our visitors here, but you never know. Anyone out there have experience using AirBnB?

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One Comment

  1. Eastender says:

    If people live in deed-restricted neighborhoods, wouldn’t this be a violation? Like running a business?

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