Corpus Christi home rezone denial sets up future fight with Airbnb

A rezoning request for a one-story home painted white with blue trim and a red mailbox could be the catalyst for Corpus Christi's next internet service battle.

Think Uber, but for 2018.

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Lydia Rios has owned her home in the 7400 block of Convair Drive since 2004. The three-bedroom house is on the corner of Silver Sands Drive and Convair in a subdivision that was designated in 1978 as a "RS-6" — single-family 6 district.

Bill Green, interim director for the city's development services department, presented the Southside home to the city council for rezoning approval to "RS-6/SP" — single-family 6 district with a special permit to allow for the operation of a bed-and-breakfast.

But this isn't a typical B&B, and the council wasn't buying it. The rezoning proposal was denied, but there's more to the story.

In the last few years, Rios has rented out rooms on Airbnb, an internet-based short-term rental service that operates in nearly 200 countries and more than 65,000 cities.

Under Rios' listing on Airbnb, the home has one bedroom available for two guests and a shared bathroom. Guests can have access to the kitchen, living room, game room and patio area.

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The home received a near-perfect five-star score in every Airbnb category (accuracy, communication, cleanliness, location, check-in and value), and gleaming reviews have been left by 50 guests.

"This place was awesome — not just another Airbnb, but a host that goes above and beyond to help her guests feel at home. Big Heck Yea on this one!" was left by a guest identified only as "Terry" last September.

NEIGHBORLY DISPUTE

Rios' neighbors and city council members do not share Terry's enthusiasm.

"Can these facilities just be located anywhere in a neighborhood?" said Carolyn Vaughn, District 1 council member at Tuesday's council meeting. "They're obviously cropping up all across the city. We can't just let them operate without paying any taxes. Hotels pay taxes through the (state) comptroller's office, so what do they do?"

More than a year ago, neighbors complained to the city's code enforcement department. Parking was the main issue at the time.

Rios was formally cited by code enforcement for operating a B&B without a special permit, but continued to rent out rooms.

Out of more than 30 notices sent to homes within 200 feet of the house, eight were returned in opposition.

"We bought a house in a neighborhood to gain privacy over apartment living," neighbors Theresa and Thomas Hand wrote in an opposition letter. "With constant strangers across the street, we lose that. Parking has been a problem. No vetting of 'customers.' We bought into a single family housing neighborhood."

In another letter, Jackie Sasara wrote she believes a B&B in the neighborhood would lower property values and pose a threat to her grandchildren who visit often.

"We will not know if these transient people are sexual predators or have a history of criminal activities," Sasara wrote. "(It) causes parking issues, too!)

In November, the city's planning commission approved the rezoning proposal 5-2 with commissioners Carl E. Crull and Marsha Williams voting no. Two commissioners were absent.

Commissioner Heidi Hovda, who supported the motion, expressed the "immediate need to adopt an ordinance for short-term rentals (less than 30 days) since Corpus Christi does not have one."

There are no immediate plans to bring any changes to the unified development code in regards to short term rentals, Green told the Caller-Times in an email.

"City staff has and continues to exercise their due diligence on the many facets that would go into crafting such a revision to the UDC ordinance," Green wrote.

This topic is broad and far-reaching."

CITY'S NEXT UBER

Council member Greg Smith called the situation "kind of an Uber issue" for the city.

In 2016, ride-sharing companies, like Uber and Lyft, left Corpus Christi after a city ordinance required their drivers to submit to fingerprint-based background checks.

Last year, a new Texas law set forth requirements for ride-sharing companies, but did not require fingerprinting. The two services returned to the city shortly after.

"The B&B you're trying to push this in; this is about Airbnb — just a horse of a different color," Smith said on Tuesday. "It's going across the nation; there are 300 on just one site. This city is losing significant amount of hotel, motel tax. We need to address it."

Since 2015, nearly 40,000 people have stayed in Corpus Christi using Airbnb. Nearly 20 percent are over the age of 60, according to statistics provided by the service.

Last May, Airbnb began collecting and remitting 6 percent state hotel occupancy tax on all eligible bookings in Texas. The state joined the 275 jurisdictions globally where the service is collecting and paying hotel taxes on behalf of hosts and guests, according to a news release.

“The sharing economy plays an important role in our state’s overall fiscal health,” Texas Comptroller Glenn Hegar said in a release. “We applaud Airbnb for agreeing to collect state hotel occupancy taxes, as all lodging facilities in Texas are required to do.

"Airbnb is taking a true leadership role by setting an example and acting as a responsible partner with the state of Texas as our dynamic economy continues to evolve.”

But how does Corpus Christi get its share?

Alma Casas, assistant director of financial services, said the taxes are handled two ways: sales tax through the comptroller's office and a hotel tax, which is administered through MuniServices, LLC.

"They're the ones who administer hotel/motel tax on our behalf, so the actual report goes to MuniServices, not to us," Casas said.

Casas said Airbnb hosts are responsible for reporting the money they make, Casas said. But many don't.

"We're thinking of bringing it back in-house, because we thought there was a lot being missed in revenues," she said. "Now this kind of confirms it."

Laura Spanjian, public policy director for Airbnb's Southwest region, said the service is committed to helping its community pay its fair share of taxes.

"These agreements generate meaningful revenue for communities and streamline the process of our hosts, and hope to reach them with cities around Texas, including Corpus Christi, soon," Spanjian said in an email.

SENSE OF SECURITY

For all of the neighbors in opposition, parking was an issue. But safety and a sense of well-being also were high on the list of complaints.

Many believe Rios' guests are not vetted, but Airbnb said that is not true.

"We take a number of steps to protect our hosts and guests, including leveraging our real time risk detection system that analyzes every reservation in advance to help flag and stop suspicious activity," according to a spokesperson. "In addition, while no background check system is infallible, all hosts globally are screened against regulatory, terrorist, and sanctions watch lists. For United States residents, we also run background checks looking for prior felony convictions, sex offender registrations, and significant misdemeanors."

Home safety workshops and free smoke and carbon monoxide detectors are available for hosts, as well.

At the November planning commission meeting, Rios said her patrons contribute to the city's economy. She said she has never had a "horrible experience" when she rented out a room and her patrons are always professional and educated.

The service said an overwhelming majority of hosts and guests are good neighbors and respectful travelers, issues can arise.

"We have no tolerance for disruptive party behavior and we immediately ban guests from the platform as appropriate," said a spokesperson. "Hosting is a big responsibility and those who repeatedly fail to meet our standards and expectations will be subject to suspension or removal from the Airbnb community."

LOST LIVELIHOOD

The house on Convair Drive was denied a zone change, but it had not been taken off the Airbnb website as of Friday. It's now only available for as a 30-day rental or longer.

In front of council, Rios shed a tear and said renting out rooms was her livelihood.

Airbnb said a vast majority of its hosts use the income from the rented rooms to make ends meet. The service wants to work with the city on fair regulations to "allow families to share their homes to help pay the bills."

Mayor Joe McComb said he doesn't have a problem with entrepreneurship, but he believes people who run a business should "play by the rules."

"They know they're skirting laws of zoning in many cities, and people are taking advantage of a low-cost room with no hotel/motel tax," McComb said. "They're getting away with it. You lose a sense of the sanctity of a single family residential neighborhood. People are more interested in dollars and accommodations."

Twitter: @reporterjulie