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Santa Monica Enforcers Crack Down on Short-Term Rentals

Santa Monica Real Estate Company, Roque and Mark
Roque & Mark Real Estate
2802 Santa Monica Boulevard
Santa Monica, CA 90404
(310)828-7525 -

Pacific Park, Santa Monica Pier

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

Convention and Visitors Bureau Santa Monica

By Niki Cervantes
Staff Writer

March 22, 2016 -- After nine months, Santa Monica’s crackdown on short-term vacation rentals – one of the most aggressive in the nation -- is being called a success so far by its enforcers.

A report to the City Council this month states that enforcers have collected more than $40,000 in fines, yanked more than 600 illegal listings and closed about 100 cases by winning compliance to the new tougher rules.

“Santa Monica is the first city in the United States to proactively enforce a ban on short-term vacation rentals,” Denise Smith, a City administrative analyst, said in the City Council update.

“In spite of significant obstacles, in the first few months of enforcement of the law staff has been successful.”

Santa Monica generated national attention in May when the City Council voted to specifically outlaw the type of short-term vacation rentals that boomed in popularity with the emergence of online sites like Airbnb, an industry giant that was cashing in heavily on the seaside city ("Santa Monica City Council Bans Short-Term Rentals," May 14, 2016).

Worried by the outcry from neighbors and the impact of such rentals on the city’s struggle to provide housing units, Santa Monica now explicitly outlaws “home sharing” rentals of less than 30 days and hits hosts with licensing requirements, the city's 14 percent hotel tax and other rules.

Its decision to go after the short-term rental industry is widely considered a test case by other cities nationwide also struggling with the problem.

When Santa Monica passed its new law, the city had an estimated 1,700 short-term rentals, about 80 percent of which were clearly illegal under the new rules, officials said. After being reassessed, the total dropped to 962.

The report now counts 629 listings, although the number doesn’t account for duplicate listings on more than one site or listings advertised as being in neighboring communities but are in effect in Santa Monica.

Smith said the estimate of illegal rentals was collected from listings on Airbnb, VRBO/HomeAway, and Flipkey/TripAdvisor, the three biggest such online sites.

But there are dozens of similar but smaller sites which have a handful of listings each, as well as local vacation rental and property management firms that also are breaking the new law, Smith said.

“Staff has begun enforcement action against three of these operators and is actively investigating a number of other local companies,” she said in the report.

In addition, one of the sites was issued citations for 418 separate violations of the law, or for “significant involvement in facilitating vacation rentals.”

The “platform” is not named in the report, and Smith could not be reached for comment. However, the site has paid $31,350 in fines and removed the advertisements for which they were cited, the report said.

Many more illegal lists are reappearing on the site, though, “necessitating further enforcement efforts.”

Meanwhile, the division is still investigating about 200 actives cases, Smith wrote.

It has also issued 90 tickets to individual hosts for “advertising, facilitating, and/or operating vacation rentals or unlicensed home-shares,” the report said.

Because of the recurring nature of such violations, the cases involved aren’t closed until at least 30 days of monitoring, or when staff can confirm that the illegal activity has stopped.

Short-term rentals for business people, known as corporate housing, continues to be a problem, the report added.

Although corporate housing is banned in Santa Monica, guests and hosts “are generally not willing to cooperate with City investigators” and dealing with them is intensely time consuming, the report said.

Santa Monica also is being closely watched because it vowed to get tough and hired an additional analyst and two code enforcement officers ("Santa Monica Rolls Out Strict New Law on Short-Term Vacation Rentals, June 20, 2015).

Four analysts and code enforcement officers were already on staff but handled a variety of other issues.

The new analyst was hired in June and the two new officers came on board in August, the report said. It does not discuss the cost of the crackdown, which by some estimates is more than $400,000.

Santa Monica City officials began rolling out its crackdown on illegal vacation rents in June by collecting business licenses for those who were engaged in “home sharing,” the term the city uses for short-term rentals.

Along with the business license, operators must be on site during guest stays and pay the hotel tax. The City also used an education campaign to teach hosts about the new rules.

It also decided in January to jack up fines significantly, raising them from $75 to $500 to act as a deterrent to what is a generally lucrative industry.

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