Santa Monica, Calif., is cracking down on Airbnb and the rest of the short-term rental industry. Tuesday night, the Santa Monica City Council adopted its home-sharing ordinance, which bans the rental of an entire unit for less than 30 days and requires those who take part in allowable home-sharing to obtain a business license from the city and pay a 14% hotel tax. The law takes effect June 15. The city says proceeds from the hotel tax will help pay for enforcement officers and an analyst to find illegal rentals online.
The ordinance makes a clear distinction between what Santa Monica officials term "home-sharing" and "vacation rentals." Home-sharing requires the primary resident of the space to live "on-site during the visitor's stay." Vacation rentals, as defined by Santa Monica are any rentals 30 days or less in which the guest "enjoys the exclusive private use of the unit." The new ordinance deems vacation rentals illegal if the property is only approved for permanent residence.
Around 100 protesters organized by Airbnb gathered outside Santa Monica City Hall Tuesday afternoon before the vote, according to the Los Angeles Times. Arlene Rosenblatt, a Santa Monica homeowner who lists her apartment on Airbnb told the paper, "It's such a blessing for us to have this money... We need to have these regulations changed."
But in an interview with NPR, Santa Monica Mayor Kevin McKeown said vacation rentals aren't good for his city. "When a landlord or other property owner takes a unit off the housing market and uses it for vacation rental, there is no permanent resident on the site, we've lost that part of the fabric of our community," McKeown said. "And the people who are coming to stay are not directly supervised, so they, being on vacation may, in total innocence, may be coming and going at two or three in the morning. They may be not aware of the noise they're making for the neighbors. The neighbors aren't sure who the people are. You end up with somebody you don't know who has the keys to the building, to the parking garage. You don't who they're going to bring in with them. And you don't have that connection."
McKeown said some 1,700 units in Santa Monica — which has a population of just over 90,000 people — were being used for short term rentals, and only a few hundred of those were home-shares, where the permanent tenant remained in the space during a short term rental. McKeown said the new measure will "restore the residential fabric of our neighborhoods," and return 1,000 housing units to the housing market.
In a statement to NPR, Airbnb said, "This proposal fails to provide clear, fair rules for home sharing. We will continue to highlight the importance of fair rules with leaders in Santa Monica and throughout Southern California."
A company spokesperson also told NPR that reports of short-term renters disrespecting neighborhoods are rare. "We give hosts the tools they need to only welcome respectful travelers. The average age of an Airbnb guest in Santa Monica is 37. Isolated anecdotes are rare, but if issues arise, we work with our community to try and resolve them."
Santa Monica isn't the only city to push back against Airbnb and others in the short-term rental industry. We previously reported that New York's attorney general found that almost three-quarters of New York City bookings break the law, and that the state is owed $33 million in hotel taxes. An increasing number of cities across the country are starting to institute hotel taxes on Airbnb rentals. The pushback has even gone international, with Spain fining Airbnb $40,000 and threatening to block its website.
In California at least, Santa Monica's latest regulations are harsher than others. San Francisco, for instance, has allowed residential rentals of less than 30 days, with some "caveats," as the San Francisco Chronicle reports.
But Santa Monica Mayor Kevin McKeown said he stands by his city's decision. McKeown said he hears the complaints, even those about homeowners needing the extra money an Airbnb rental can provide. But he said, "there's lots of ways to make extra money by running an illegal business, and we don't condone any of them."