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Santa Monica Rolls out Strict New Law on 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

June 17, 2015 -- The City of Santa Monica on Monday began to roll out a sweeping crackdown on illegal vacation rentals made popular by online sites like Airbnb, vowing to enforce some of the toughest restrictions in the nation.

City officials Monday began collecting applications for business licenses for “home sharing,” the term the city uses for those who rent apartments or homes for short-term stays but comply with Santa Monica’s regulations. The law impacts an estimated 1,400 short-term stay units out of a total of about 1,700 now operating, officials said.

“We are hoping folks will self-comply,” said Salvador Valles, chief administrative officer for Planning and Community Development, adding that the City will soon begin issuing fines and, for the worse offenders, threaten closure.

In addition to the business license, operators must also be on-site during guest stays and pay the city’s 14-percent hotel tax. Valles said he didn’t know how many applications for licenses had been received so far.

The law is being rolled out in stages, due in part to the number of travelers who booked rooms in Santa Monica before the law was passed in May.

Applying for business licenses is the first stage of the rollout, Valles said. The second involves trying to educate hosts about the new law. The City has posted information about it on its website and will take out advertisements and do mailings in an effort to teach hosts about the new rules, Valles said.

“We are going to go through an education process,” he said.

The rollout, Valles added, should take a “few months,” time meant to allow illegal operators “to wind down their operations.”

At the same time, inspectors are continuing to respond to complaints about illegal short-term rentals.  Valles’ office is also putting together an inventory of existing short-term rentals so they can be monitored as the law begins taking effect.

Santa Monica will add two code enforcement officers and one administrative aide when the 2015-2016 fiscal budget is adopted in July, City officials said. The office now has 13 code enforcement officers and four administrative staff members.

Santa Monica’s new law on short-term rentals is believed to be the strictest in the nation. But many cities, especially those that attract tourists, are weighing in with new regulations. Malibu, for instance, is making sure popular online sites like Airbnb collect the city’s hotel tax.  Los Angeles also is considering regulations.

The explosive popularity of sites like Airbnb created a boom in Santa Monica of short-term vacation rentals in homes and apartments. Officials stepped, fearing the loss of units was worsening the city’s housing shortage. 

They were also reacting to complaints from neighbors about noise and congestion caused by short-term vacation rentals in residential neighborhoods.

Critics of Santa Monica’s law say it will hurt residents who were renting out space to help make ends meet in the expensive seaside city.

“It’s a big task. We know there will be challenges,” Valles said. “But we know this is the right law for Santa Monica.”

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