In bid to stop illegal rentals, Santa Monica slaps Airbnb, VRBO with $500 fines

Nine months after Santa Monica City Council members voted to ban short-term rentals and fund an enforcement office, the city said it has issued citations on about 650 violations, all but about 100 of them going directly to the short-term rental platforms Airbnb and VRBO.

It's unclear whether the companies have paid the fines or are fighting them. Neither they nor Salvador Valles, assistant director of Santa Monica's Planning and Community Development, would comment.

Instead, Airbnb emailed KPCC the following statement: "Santa Monica's clumsily-written law punishes hosts who depend on home sharing to make ends meet or travelers looking for low-cost accommodations along the coast. While we've responded to the city's notices, we continue exploring all options and remain hopeful that the city will revisit these misguided rules that harm middle-income Californians."

Valles said the city increased the fine on violations to $500 from $75 last year.

The city has also cited 102 Santa Monica property owners for illegally renting out their homes, Valles said, though his department only provided KPCC with copies of 30 citations, after a public records request.

He said enforcement officers regularly monitor short-term rental platforms to see if violators continue to break the law.

"It’s a bit of a whack-a-mole kind of situation where you address it in one area, and they pop up somewhere else," Valles said. 

When a property does not show up on the sites for 30 days straight, he said his department considers the investigation closed. Valles said 72 locations are currently under investigation.

Last spring, a city report found up to 1,700 illegal rental units in Santa Monica. Valles said the city has since reassessed that number, and they believe it's fallen to 962.

"The true metric of success for us in Santa Monica will be restoring those vacation listings to true residential homes, once again accommodating families who will become a permanent part of our community," said Councilman Kevin McKeown, who was the Mayor of Santa Monica when the city's short-term rental ordinance was approved.

"Criminal prosecution is part of our strategy, and we continue to go after scofflaws," he added. "But just as important to us is the number of commercial vacation rentals that have been taken off the market altogether because of our law, and which once again are homes, not underground hotels."

Local lawmakers in many Southern California cities have considered limiting the short-term rental market, as residents have brought forward concerns about the widespread use of platforms like Airbnb.

Some residents argue that too many landlords are turning traditional apartments into vacation rentals, which has taken longterm housing off the market and pushed up rents. Others have complained that their neighborhoods are being overrun with loud tourists, and apartment buildings have transitioned into defacto hotels. Yet others say those claims are overblown, and short-term rentals are helping locals make extra money. 

Some local cities have passed laws to limit the short-term rental industry's reach, but none with as stringent enforcement as Santa Monica. For instance, West Hollywood has also outright banned short-term rentals, but hasn't dedicated staff to enforce the rule.

Valles said so far the city's enforcement unit has cost Santa Monica $190,000, not including vehicles and supplies. That's less than previous estimates, which put the department at $410,029 for the 2015-2016 fiscal year, and $266,898 in subsequent years.

Back in May, when the Council was poised to approve the enforcement unit, city staff said it would make back much of this money through Transient Occupancy Taxes, which rental sites collect on both legal and illegal short-term rentals. A legal short-term rental in the city is one where a host stays in the unit with their guests, a practice known as home-sharing.

According to Valles, the city has received $242,000 total in those taxes, but only $36,000 came from legal and licensed home-sharers.

KPCC reached out to numerous Santa Monica property owners who have received citations. Some said they didn't know about the new law until they received a ticket. Others said they hoped they wouldn't be caught. Many said the fines had discouraged them from continuing to rent their property on a short-term basis.

Richard Carter, a production designer in the film industry, said he was renting his triplex to help supplement his income.

"You know, I’m 70 years old. I was seeing a slowdown in my career, taking it easy, maybe spending more time in Colorado, and it seemed like a good opportunity to augment my pension," he said.

Carter said he’s made more than $75 renting out this unit, which would cover the fine he received from the city, but when asked if the financial trade off is worth it, he said no.

"Because I have a feeling that the boys down at City Hall would make my life miserable. You just get that feeling," Carter said.