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Santa Monica Moves to Ban Short-term Vacation Rentals

Santa Monica Real Estate Company, Roque and Mark

Pacific Park, Santa Monica Pier

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

By Niki Cervantes
Staff Writer

April 30, 2015 -- Concerned about the squeeze on its already stressed housing stock, the Santa Monica City Council Tuesday gave initial approval to a ban on short-term vacation rentals, and followed up with big penalties against those who ignore the new regulations.

The Council voted 6 to 0 to crack down on an estimated 1,700 illegal short-term rentals after more than 200 speakers showed up to testify against the growing practice popularized by websites like Airbnb.

The proposed ordinance, which must be approved on second hearing next month, allows only “home sharing,” a designation for a space in a home or apartment that can be rented only if the host lives on the premises, has a business license and pays the city’s 14 percent hotel tax.

Santa Monica’s new regulations would also require websites such as Airbnb to report those who are acting as hosts and where and how much they are charging.

But the Council also ordered city officials to make sure websites, hosts and renters know that the law has changed and that it be adequately advertised.  They were concerned about visitors who might have already made arrangements to come to Santa Monica and stay in a short-term rental.

“I think it’s a win-win for everybody,” said Councilmember Ted Winterer.

“I think we’ve been very judicious,” said Councilmember Gleam Davis.

Supporters of the crackdown say it is helpful to those who want to earn a little extra money, while critics contend the practice has been taken over by big business and landlords who rent out entire buildings as short-term rentals, taking valuable units out of the residential housing stock at a time when it is hard to find affordable housing in Santa Monica.

Neighbors also complain about noise and congestion and say they worry about the potential for crime when strangers move into the neighborhood short term.

In voting for the crackdown, Councilmember Sue Himmelrich called short-term rentals “the warehousing” of the existing rental housing stock.

But Councilmember Pam O’Connor said “a lot of people want to be good hosts,” who carefully scrutinize who they there are renting to and do a good contentious job.

“We want people who want to house share to do it legally,” she said in voting for the new regulations.

Several council members emphasized the need for close enforcement of the laws. Violators could face $500-a-day fines and possible criminal prosecution, said Salvadore Valles, acting chief administrator for Planning and Community Development. The fine would apply to rentals of 30 days or less.

Santa Monica’s new regulations come as several cities, including Los Angeles, are trying to determine how to handle the proliferation of short-term rentals.  Malibu recently agreed to let them operate but is demanding that they pay the City’s 14 percent hotel tax.

Tuesday’s hearing was preceded by a brief rally and news conference by opponents of short-term rentals attended by community activists and the union that represents hospitality workers.

“Give residential units back to residents,” Jennifer Kennedy, a leader of Santa Monicans for Renters’Rights and a city planning commissioner told the crowd.

One of the speakers who testified at the hearing was former Pier Board member Ellen Brennan, a resident of Ocean Front Walk. She said that the units above hers were rented on a short-term basis to a fraternity that hosted a long, loud party.

“It was 3 a.m. and it sounded like an army in maneuvers overhead,” Brennan said.

A handful of speakers argued that the practice helps Santa Monica tenants by giving them the extra money needed to pay the city’s high rents.

But many more were opponents urging a crackdown.  Augustine Carderas, who has worked at the Viceroy Hotel for eight years, said it takes him two hours a day to commute to Santa Monica. He said he wanted to live in the city  but there was not enough affordable housing.

“I see companies like Airbnb who take (out of the housing stock) 1,400 units,” he said. “This is an injustice.”

Another speaker said it took her just 15 minutes walking around Pico Boulevard and Ocean Avenue to find more than half a dozen tourists making their way to apartment units for vacation stays. No hosts were on site, she said.

That was one example of how prevalent the practice has become, said Melanie Lutheran, an organizer with the local Hotel Employees and Restaurant Employees (H.E.R.E). Union. And it was one reason she was supportive of the Council’s action on Tuesday.

“We care deeply in this city about preserving the life of our neighborhoods,” she told the Council. “This ordinance is great.”

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