Santa Monica
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We Love Property Management Headaches!

Harding, Larmore
Kutcher & Kozal, LLP

By Niki Cervantes
Staff Writer

January 12, 2017 -- The City Council on Tuesday modified Santa Monica's law on short-term vacation rentals -- already among the nation’s toughest -- to help prevent scofflaw hosts, as well as to try to shield the City from more legal attacks from industry giants like Airbnb.

The City Council voted 4-0 to require all “home sharing” hosts to not only register with the City but have their information published on a special registry compiled by the City.

Officials said it is not unusual for businesses to opt out of such lists, but that eliminating the choice in this case will make it easier for the City to catch hosts who are operating without having registered.

Santa Monica’s “Home-Sharing Registry” amended law will also prohibit hosting platforms, like Airbnb and Home Away, from completing business with short-term rental hosts who are not listed, said Salvador Valles, assistant director of the City’s Planning and Community Development.

It would “facilitate a hosting platform’s compliance with the law by preventing unlawful rentals,” he said in a report to the council.

Santa Monica requires hosts to live at the site they are renting, pay the City's hotel tax and register by applying for City approval. The local law does not allow such rentals for longer than 30 days ("Santa Monica City Council Bans Short-Term Rentals Despite Protests," May 14, 2015).

By adding more restrictions to a law that prompted Airbnb to sue last September, the City is wading again into murky legal waters ("Santa Monica Sued by Airbnb," September 7, 2016).

Airbnb’s lawsuit against Santa Monica alleges the ordinance, including the registry, violates a variety of federal laws, including the Communications Decency Act, the Stored Communications Act, and the First, Fourth and Fourteenth Amendments to the U.S. Constitution.

The report by Valles makes note of the current litigation surrounding the issue, which has also hit cities with similarly stringent laws, including New York and San Francisco. But Interim City Attorney Joseph Lawrence said even if registries are struck down, the City can add specific language leaving the other provisions of its law intact.

Santa Monica’s 2015 law was a reaction to the booming popularity of Airbnb-style short-term rentals and the corresponding spike in complaints about noise and other problems from neighbors of those rental properties.

Officials said entire apartment buildings were being turned into short-term rental properties, a practice which was already illegal in Santa Monica (as elsewhere) but mostly ignored -- and highly profitable.

Santa Monica was among the first cities to start cracking down, and is known for its effort to enforce the law, challenging the widespread argument that the hotter-than-ever market for short-term rentals would find ways around regulations ("Santa Monica Wins First Conviction in Battle to Stop Illegal Short-Term Vacation Rentals," July 13, 2016).

The City’s list of registered home-shares will be posted on the City’s Open Data Portal in its website and will be available at www. data.smgov.net, under the category of permits and licensing.

Tuesday’s approved amendments also clarify that hosting platforms are not responsible for inspecting units for compliance with building and fire codes.

Members of the online business community and others used Tuesday’s hearing on the home-sharing law to reiterate arguments about the economic impact on individual hosts and online-based companies that benefit from thriving operators like Airbnb.

The audience included a man whose start-up offering housekeeping for hosts went out of business when the battery of new regulations nationwide gutted demand, he said.

But the council showed no interest in reversing course or even postponing action, as was also requested.

Tuesday’s goal was to strengthen the law, said Council Member Kevin McKeown, not back down from a problem that was “decimating and destroying” neighborhoods unchecked.

Council Member Sue Himmelrich abstained from Tuesday’s vote, saying her husband, attorney Michael Soloff, is part of the team representing Airbnb in court. Council Members Pam O’Connor and Terry O’Day were absent.

Voting for the amendments were McKeown, Mayor Ted Winterer and fellow council members Tony Vazquez and Gleam Davis.