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Can Santa Monica Enforce New Ban on Short-Term 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

May 18, 2015 -- The Santa Monica City Council last week voted unanimously to impose the strictest crackdown yet on short-term rentals. Now the question is: Can the City enforce its sweeping new legislation?

With an estimated 1,700 short-term rentals being offered in the popular beachside city by websites such as Airbnb, enforcement of the new law will not be easy, acknowledges Salvador Valles, chief administrative officer for Planning and Community Development. 

“This is a little unique,” Valles said. “We’ve never had to gear up for something quite like this.”

The new law bans the rental of an entire unit for less than one month, but allows “homesharing” for homeowners who want to rent everything from a couch to a backyard unit, as long as the host is onsite, has a business license and pays the City’s 14 percent hotel tax

It goes into effect 30 days from its passage by the council.

Other municipalities facing the same problem, such as Malibu, have reacted by insisting that the Airbnb charge the city’s hotel tax. But they have not gone as far as a ban.

To enforce the new law, Santa Monica will need to add two code enforcement officers and one administrative aide when the 2015-2016 budget is adopted in July. The office now has 13 code enforcement officers and four administrative staff members.

More staff will allow the code enforcement division to be “more proactive,” Valles said.

Code enforcement employees will comb Airbnb and similar sites to look for offenders, possibly stopping them before they rent out illegally.

“Before we were always reacting” usually to complaints from neighbors about noise and congestion, Valles said.

Santa Monica’s ban will make it clear to residents that short-term rentals are illegal, Valles said. 

Before the ban, even if a host had applied for a license, it would have been denied because businesses are not zoned for residential neighborhoods. This was not clear to many people who watched as the trend boomed, Valles said.

“It was kind of confusing to people,” he said. “We’d have to come in to talk to them about zoning, which is confusing. This is an outright ban. It will make it easier.”

Violators will first be given time to comply with the law, then could face fines of up to $500 daily. Criminal charges for the most egregious offenders could also be leveled, Valles said.

Still, how successful enforcement of the law will be is a looming question. It pits neighbors, housing advocates and the City against a rising tide of online-based home sharing industry enthusiasts -- particularly in tourist destinations like Santa Monica.

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