Santa Monica council unanimously approves Airbnb regulations; hosts to pay tax

Despite a protest of almost 200 residents, the Santa Monica city council unanimously passed an ordinance Tuesday that will prohibit residents from sharing their place when they're not present.

This tough legislation is a first, Airbnb spokesperson Alison Schumer, told KPCC prior to the meeting. 

"The unnecessarily restrictive proposal would prohibit hosts from sharing their home with guests while the host is out of town — a unique provision which has never before been proposed," Schumer wrote in an email. 

The law also requires hosts to collect a 14 percent hotel tax and obtain a business license. Violators could be fined up to $500, and the ordinance is slated to go into effect in 30 days. 

Keep up with LAist.

If you're enjoying this article, you'll love our daily newsletter, The LA Report. Each weekday, catch up on the 5 most pressing stories to start your morning in 3 minutes or less.

Subscribe

Santa Monica said it will hire additional staff to take its estimated 1,400 short-term rentals off the market. 

Airbnb rally

Westsiders gathered to oppose the legislation and support the home-sharing economy in a rally organized by Airbnb Tuesday. Most said they had no problem with paying the tax. But many said they'd like the option to rent out their place when they travel. They said this legislation will set a precedent for the rest of the region, as Los Angeles city council members grapple with how to regulate short-term rentals. 

Video of rally

Cat Healy has lived in Santa Monica for almost two decades; she's been sharing her one-bedroom rental property via Airbnb for the past few years. It's helped her climb out of debt and afford life in an expensive city, she said. 

"The people who are Airbnb-ing — guess who they are? They're not rich people; they are people trying to pay their bills," she said.  

Her monthly rent is $1,300, and she lists her home for anywhere between $100 and $130 per night. When she shares her home, she stays at a friend's place on the Eastside. 

Has she thought about moving? "Well, there is no cheaper rent," she said. "That is pretty cheap."

Another local who lives in West L.A., Jeff Cowan, said he rents out a family-owned unit year-round. ​As a film editor who travels for work, he says he's just trying to get by and pursue a job that he's passionate about. 

"My family — they own apartment buildings, and they were having a lot of problems renting out a certain unit — so I said OK... I'll rent it from you, and I'll rent it out on Airbnb," he said. "I'm not getting rich off of it... and it's allowing me to pay my bills."

Cowan hopes the city of Los Angeles will create legislation to collect a transit occupancy tax from short-term hosts and put that money toward affordable housing. 

Los Angeles Mayor Eric Garcetti has said that if the hotel tax is collected on home-sharing units, it would likely generate $5 million per year.

Sharing data 

Santa Monica's new ordinance states that home-sharing platforms will be responsible for disclosing the names, addresses, length of stay and price for each short-term rental in the city. That aspect of the proposal brought privacy advocates to the rally and council meeting Tuesday. John M. Simpson, project director for the organization Consumer Watchdog, spoke at the rally. He described the ordinance as an unwarranted intrusion into user's privacy and requires home sharing sites to do enforcement work that should instead be the city's responsibility.

Airbnb agrees. 

"The law would require platforms to hand over large swaths of confidential, personal information to city regulators who will sift through this data in search of potential zoning code violations," said Schumer, who spoke on behalf of the company. 

But 14-year resident Amy Gottstein said she is happy with the council's decision. 

"I think it's important to know who's doing the sharing, in case anything goes awry," she said. "...If something goes wrong, somebody needs to be held responsible because it's not going to be Airbnb."

The Los Angeles Short-Term Rental Alliance, which is made up of short-term rental owners, told the Los Angeles Times prior to the meeting that these new regulations could lead to future lawsuits.

"We believe this legislation is flawed, constitutionally questionable, and likely to lead to litigation,” said Robert St. Genis, LASTRA's director of operations.

Housing shortage

The Santa Monica council debated the topic and heard from dozens of residents last month.

"It's particularly important that we focus our enforcement on those folks who basically have apartment buildings and are turning them into hotels," said councilmember Sue Himmelrich.

Locals were split on the issue. Some said the restrictions were too harsh; others said the rise of short-term rentals have taken long-term rental properties off the market and increased the price of rent for longterm residents. 

"I would love the opportunity to live closer to where I work," said hotel worker Agustin Cardenas through a translator. "I see that companies like AirBnB have taken more than 1,400 homes in Santa Monica to rent to tourists. This is an injustice."

Nearby, in the city of Los Angeles, council members are still considering how to regulate short-term rentals. A report from the city’s Chief Administrative Officer released last week found there are about 4,500 short-term rentals throughout the city of Los Angeles. 

This story has been updated.