By Niki Cervantes
Staff Writer

June 8, 2015 -- When Santa Monica shut the door on illegal short-term rentals recently, City leaders  were sending a message: The new  “sharing economy” might be booming, but it isn’t welcome if it endangers the safety and quality of lives of the people within its borders.

That’s a sentiment echoed to varying degrees by municipalities across the country, according to a study released Wednesday by the National League of Cities.

The study notes that many cities are, like Santa Monica, grappling with ways to deal with the emerging sharing economy.

“As the sharing economy grows, and continually disrupts the way in which individuals think of space and ownership, city leaders find themselves in the unique position to manage these burgeoning new industries in ways that work for their communities and constituents,” it said.

Santa Monica has been there and done that, and so knows from experience that officials must be extra careful in confronting new realities like the sharing economy.

Said Santa Monica Mayor Kevin McKeown, “All cities, not just Santa Monica, struggle with encouraging innovation while continuing to protect public safety, retain existing valued services, and avoid unsustainable or environmentally damaging practices not yet covered by local law.

“Not every new idea is a good idea, but we must continue to welcome new ideas,” McKeown said.

Of the 245 municipal leaders nationwide who responded to the organization’s survey, nearly 75 percent said they want to see the sharing economy grow. 

At the same time, nearly two-thirds were concerned about the safety of using websites and apps that let the general public rent out rooms in individual homes or apartments instead of in established hotels, or jump into cars for rides provided by upstarts like Uber  and Lyft instead of traditional taxi cabs.

More than half the cities said they imposed no rules on "sharing" players, though their traditional counterparts — like hotels and taxi companies — often are regulated and are complaining about the competition.

"Cities are welcoming" the rise of the sharing economy, Brooks Rainwater, one of the study's co-authors, told the Associated Press. "But at the same time, because it's upending traditional service providers and regulatory environments, it's causing some level of consternation."

Still, "cities are learning how to work with these companies," and vice versa, he said.

Short-term home rentals were booming in Santa Monica -- thanks mostly to the soaring popularity of services like Airbnb -- when the City stepped in with some of the nation’s toughest restrictions.

The move came after neighbors complained loudly about traffic, congestion and safety concerns. In fact, there were so many short-term rentals officials worried the city’s already squeezed housing market was being further stressed.

“Santa Monica acted swiftly when it became clear that vacation rentals had parasitically eroded our permanent housing stock, turning dwellings into de facto hotel rooms,” McKeown said. “We prohibited that, and legalized true home-sharing.”

Santa Monica prohibits the rental of an entire unit for less than 30 days. It also requires that hosts be on site during the rental period, that they obtain a business license and that they pay the City’s 14 percent hotel tax, among other provisions.

“We’re interested in protecting what we have,” said Councilmember Sue Himmelrich, noting that Santa Monica, while a popular tourist destination, is also heavily residential.  “We want a living environment for the people who live here.”

The national study also focused on ride sharing, another sharing ecomony service that has encountered a less-than-friendly welcome by some Santa Monica City officials. McKeown  has some harsh words for Uber, as well as its rival, Lyft.

“At a recent Council hearing, we discovered that Uber and Lyft break their promise of fewer cars on the road because their drivers must cruise our downtown constantly if they want to be the closest car and snag profitable passengers,” McKeown said.

He and other officials, however, have acknowledged that they have little control over those services, which fall under the jurisdiction of the Public Utilities Commission.

Taxi cabs, on the other hand, are highly regulated by local governments and taxi drivers now complain that the new competition is driving them out of business.

McKeown said recently that he hopes the City will “work with the PUC to get control over the [app-based companies] so our taxicabs can continue to thrive and prosper side by side with them."

Those questioned in the National League of Cities survey were more supportive of ride-hailing apps than short-term home rentals, by 66 percent to 44 percent.

The report also found that, in general, cities thought the biggest benefits were improved services and economic expansion. Entrepreneurship, efficiency, tourism and public enthusiasm also were cited, though in smaller numbers.

How cities deal with the sharing economy varies widely, the study found.

In New York, for instance, regulators may decide to make ride-hailing services submit data on their trips.  Portland, Oregon, is experimenting with allowing ride-hailing companies while deregulating its traditional cab industry.

San Francisco agreed last year to permit some home-as-hotel rentals but might get tougher on them. And in New York, some lawmakers want to expand a squad that investigates complaints about such rentals.  Short-term rentals are largely illegal there, as elsewhere.

In Los Angeles, two lawmakers have proposed barring hosts from renting out houses or apartments for short stays if those homes are not their primary residences. The aim of the law is to prevent housing from being taken off the market and used as de facto hotels instead.