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Santa Monica Tightens Loopholes in Home-Sharing Law

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By Jorge Casuso

September 11, 2019 -- The City Council on Tuesday closed a series of loopholes in Santa Monica's home-sharing law that allowed a house on upscale Adelaide Drive to be rented as a quasi youth hostel.

City Code enforcers told the Council that the home's host -- who has been renting to between 18 and 36 people at a time -- complied "with almost all of the requirements" of the current ordinance, considered the strictest in the nation.

Santa Monica's 2015 home-sharing law does not limit the number of visitors per bedroom or dwelling unit, prohibit the use of hired hosts or prohibit renting to multiple different groups at a time, staff said. It also does not limit the number of cars guests can park.

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The new amendments, which were unanimously approved by the Council, bar hosts from renting to more than two groups of guests at a time and to more than 10 people per dwelling.

It sets a limit of two guests per bedroom, excluding children, or one guest per 200 square feet.

In addition, the new requirements limit the number of vehicles guests can park to one per bedroom and a total of two per dwelling in preferential parking zones.

The amended ordinance requires hosts to live on site and be a permanent resident of the property for at least one year. They also must be present during the guests' entire stay.

Hosts cannot operate more than one home-share dwelling at a time, must have $500,000 in insurance and need to comply with City noise limitations.

The amendments also establish a $100 regulatory permit fee that costs $50 per year to renew to help pay enforcement costs. The Council is expected to set new fines for violations of the ordinance at a later date.

"Santa Monica has become an increasingly expensive place to live in, and for a lot of people the ability to rent out a room allows them to stay in their homes," said Mayor Gleam Davis.

"We need to strike the right balance, and I think these proposed amendments do," Davis said.

The changes in the law were proposed by Councilmember Ted Winterer after a house rented on Airbnb as a quasi youth hostel caused an uproar in the upscale North of Montana neighborhood ("Home Rented as Quasi Hostel Raises Concerns About Home-Sharing Law," August 13, 2019).

The listing on Airbnb -- which advertised a bunk bed for $49 per night -- noted that a maximum of 36 people could stay at one time in the four-bedroom, three-bath house with a converted garage at 710 Adelaide Place.

Neighbors around the historic 2,786-square-foot Spanish-style home complained that guests, almost all of them young, littered the block with e-scooters and e-bikes and the alley behind the home with garbage.

They filed complaints with the City, leading to the first investigation launched by the Fire Department under the home-sharing law.

Code enforcers found that the multiple rentals resulted in "significant visitor traffic that led to trash, noise, and other complaints from neighbors."

But inspectors also found "the host was complying with almost all of the requirements" of the home-sharing ordinance, according to staff.

Although the host on Adelaide was violating the Fire Code that limits that type of residential property to one person per 200 square feet, fire inspectors found the home could legally rent to 14 guests at any one time.

The 2015 ordinance was an effort to strike a balance between homeowners and tenants hoping to bring in extra income and property owners who illegally rented units as vacation rentals.

The law -- which has withstood legal challenges from online platforms -- requires the host to live on the premises and restricts stays to 30 days, but it did not limit the number of guests.

As a result, enforcement has focused on illegal vacation rentals City officials worry are removing units from Santa Monica's tight housing market.

Approximately 30 percent of the 466 licensed home-share hosts are currently being investigated for operating vacation rental businesses under the guise of home-sharing, according to staff.

So far, the City has returned 334 vacation rental units to the permanent residential market through enforcement and collected $100,000 in fines resulting from 235 home-sharing violations, staff said.

In addition to helping hosts make ends meet, the home-sharing law generates some $2.2 million a year in bed taxes paid by the registered hosts to the City, according to numbers provided by staff.

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