Santa Monica Cracks Down on Airbnb – Bans Short-Term Vacation Rentals
In a bid to eliminate short-term vacation rentals advertised by websites such as Airbnb, last month the Santa Monica City Council adopted a new home-sharing ordinance, which effectively makes it illegal in Santa Monica to lease a property for fewer than 30 days.
Santa Monica’s Home Sharing Ordinance’s Restrictions
On Tuesday, May 12, Santa Monica enacted its new home-sharing ordinance. The ordinance contains two restrictions that will significantly impact the business of vacation rental websites such as Airbnb. Those two restrictions are as follows:
• “Vacation rentals” are banned in their entirety. Vacation rentals are defined as the rental of an entire unit, i.e. any property in its entirety, for fewer than 30 days.
• “Home-sharing” properties must obtain a business license and pay a 14% tax. Home-sharing properties are defined as properties in which the owner lives and concurrently rents for a period of fewer than 30 days.
The ordinance also specifically makes it illegal for “hosting platforms”, i.e. websites such as Airbnb, to advertise or facilitate any vacation rental or home-sharing activity that does not comply with the ordinance.
The Expected Impact Of The Home Sharing Ordinance
Santa Monica Mayor Kevin McKeown has stated that he expects the ordinance to “restore the residential fabric of our neighborhoods”. According to Mr. McKeown, many of the vacation renters tend to come and go during late hours, are unrecognized by neighbors, and detract from the “fabric of our community”. The home-sharing ordinance, which goes into effect on June 15, 2015, is expected to resolve those problems. Of the approximately 1,700 properties that are currently being used for short-term rentals, 1,000 are expected to go back onto the market as long-term rental units.
Santa Monica’s Plans To Enforce The Home Sharing Ordinance
Santa Monica is planning to expend significant resources to enforce the home-sharing ordinance. According to KPCC, it will spend $410,000 in the first year to create an enforcement department, which will include three full-time staff who will review vacation rental posting websites such as Airbnb. Because those websites typically do not post addresses, the “enforcement officers” will be required to look through photos of properties to identify properties that may be located in Santa Monica. Violators will be fined up to $500.
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