Love the tourists. Not the short-term rentals.

One of the reasons I’ve loved living in Santa Monica for 32 years is that it’s a tourist destination. I’m on the Promenade nearly every day and I still get a kick out watching visitors take family pictures in front of the dinosaur topiaries.

I’m fortunate often to be a tourist myself. As I love being the recipient of hospitality when I travel, I’m proud that Santa Monica has such a long history of sharing itself with the world. Regionally, we have the most reachable and accessible beach for 10 million or more of our Southern California brothers and sisters, and it’s a badge of honor that we hold the beach in trust for them.

And let’s face it—we in Santa Monica profit from being hospitable and from maintaining our little gem as a desirable place to visit. A lot of people make their livings in the tourism business, and a large portion of our municipal budget comes from tourism, much more than the additional money we spend to provide a safe and clean environment for visitors.

So when I say that I hope City Council will tomorrow night take strong measures against the kind of short-term vacation rentals that websites like Airbnb promote, I’m not saying so because I have any animus towards visitors. Just the opposite. I want the City to continue to prohibit some short-term rentals and closely regulate others because they are a threat to what Santa Monica is before it’s a tourist center and to part of what makes it so attractive in the first place: a genuine community.

We don’t want Santa Monica to become depopulated and to exist only for tourists, which is what has happened to Venice, Italy.

Santa Monica, along with the region as a whole, also has a housing shortage. The City has policies that put housing in a privileged position: residential zoning to protect housing from being turning into commercial uses, and preferences for building housing in commercial zones. If we allow houses, condos and apartments to be turned into the equivalent of condos at a ski resort, we both reduce the supply of housing, raising costs, and commercialize neighborhoods.

Planning staff has given City Council a more than 200-page report for tomorrow night’s hearing, much of which consists of analyses that various organizations and periodicals have prepared about the boom in short-term rentals and the “sharing economy” in general. The reports, particularly those that focus on the Los Angeles region, show that short-term rentals are getting out of control, with companies buying apartment buildings and turning them into the equivalent of hotels.

The staff report is thorough, but it can get confusing. There are a lot of “defined terms.” I found that the best way to understand the situation is to focus on three facts: (1) that nearly all “sharing” arrangements that companies like Airbnb market now in Santa Monica are illegal under existing law; (2) that existing law allows certain sharing arrangements that are both traditional and beneficial; and (3) that for all the noise you might hear from the short-term rental industry that Santa Monica by regulating short-term rentals is preventing residents from participating in the sharing economy, the ordinance staff has proposed would actually expand rights for sharing.

Re: Point 1, the reason that nearly all deals currently promoted through sites like Airbnb are illegal is that the City has long had a ban on home and apartment rentals of less than 30 consecutive days. This covers all kinds of rentals.

Re: Point 2, the reason existing law allows sharing arrangements that are traditional and beneficial is the flipside of Point 1: existing law allows rentals, not only for complete apartments, but also for boarders, for 30 or more consecutive days. Existing law also allows for various non-cash sharing arrangements.

The starting point is that renting out a home or apartment for less than 30 days is illegal. Re: Point 3, staff is in fact proposing a liberalization, to allow “home-sharing rentals”—meaning rentals for less than 30 days if (and only if) at least one primary resident is present. This makes sense. If you have a spare room, why shouldn’t you be able to rent it out for a few days, just as you could to a longer-term boarder, so long as you’re living there, too?

There’s one area where I wish the City might go further, which would be to allow bona fide residents to rent out their places on a short-term basis when they are out-of-town, but only for a maximum of, say, 30 days a year in the aggregate. This would enable people to make some extra money without reducing the supply of housing or commercializing the neighborhood. However, on reading the staff report, which includes accounts from cities that have tried to do this, it seems that this kind of distinction is too difficult to enforce, at least at present. Perhaps in the future this could be looked into, but for now it’s more important to get the short-term rental situation under control.

Another issue that people have raised is whether people who own second homes should be allowed to rent them out. (Think again of ski condos.) The answer has to be no—if we allow people to make money from their second homes we’d only be encouraging more second home ownership here, which is not consistent with the City’s housing policies.

Thanks for reading.

4 thoughts on “Love the tourists. Not the short-term rentals.

  1. As a mom and pop property owner, this ordinance is a slap in the face. Acting as though “because it was law” is a good reason for anything (all kinds of bad laws are still on the books and always make for amusing reading), Frank, you fail to point out how it is the community itself for whom the law makers are the servants…not the other way around. When Staff is fiscally irresponsible (but what’s new) and is proposing entrapment style antics by expensive additions to their staff you have to start wondering. Staff always wants new staff to make their own jobs more important….. Finally we have a little money to clean up the blight rent control reduces a community to and the ordinance kicks up enforcement instead of helping to create new standards that help a community grow, change, and share. We do our part and have below market tenants. And now they have a nicer place to live. Too many points to discuss here; but it’s sad to see such a well known and capable writer and housing expert not under stand the total dynamics at work here. With all due respect, it could be a generational thing…..

  2. I understand your concern, but I also feel I should be able to do what I want with my home. If I want to go out of town for 6 months and rent it, why not? I’m getting fed up with the City “owning” my property, in essence. They don’t pay my taxes, insurance, etc. Be careful that this Big
    Brother mentality will not take over!

    • Linda — keep in mind that there’s nothing stopping you from renting for 30 days or more. This is only about short-term rentals.

  3. Thank you Frank. (In case any Council Members are reading) you speak for me in characterizing Santa Monica as a community and the importance of preserving it as a community of residents. Now I understand why I see so many apartment buildings around town, all spiffed up, that are empty of any sign of human habitation. All the shades are drawn, all day. No lights at night. We definitely don’t want to see this expand. Thank you for your analysis of the staff report and recommendation and add my name.

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