Santa Monica to AirBnB Renters: We Will Crush You
The city of Santa Monica, which is just minutes from both Marc Clair and myself, has instituted some highly questionable new regulations that target AirBnb style rentals and are predicted to lead to a shut down of 80% of the short-term rentals within months. Forbes reports:
The Los Angeles suburb of Santa Monica has instituted the nation’s toughest regulations on short-term rentals like Airbnb. Starting today, hosts will have to live on the property during the renter’s stay, register for a business license and collect the city’s 14 percent occupancy tax.The city estimates that this will shut down about 1,400 of the 1,700 short-term rental listings – about 80 percent – in this upscale beach town and major tourist destination, population about 92,500.More than just driving up rents, [Assistant Director of City Planning] Valles says, the decrease in owner- and long term renter-occupancy has the potential to change the character of the city. “It becomes more of a transient community than a neighborhood where people are invested in the community.”“Our city council thought that it was important to intervene and return rentals to the housing market,” he says. Violators will face a $500 fine.Although the new regulations ban absentee hosts, hosts are not required to be on site full time. Valles told me that hosts’ work, social and personal business can go on as normal, as it would for a non-paying guest. Registration for the business license is free, and no business tax would be owed for any rental income below $40,000, though the occupancy tax would still be required.
My immediate response after reading that first paragraph was to suspect that the city's lust for new revenue sources had led to them demanding business licensing fees. However, in this situation, I was wrong. That doesn't mean that there aren't still factors at work behind the scenes that make this story of a city trying to protect its rental rates problematic.Santa Monica has a plethora of hotels, with it being one of the top tourist destinations in the country. This would lead me to think that a lobby of regional hospitality groups had something to say to city councilmen. Rapidly rising rents (say that six times fast!) have never been a concern for the city of Santa Monica before, which is one of the more wealthy communities in Los Angeles.As with well, basically every regulation in our current environment, this in no way accounts for the basic rights of the property owners. Why should a city government be permitted to tell a homeowner who they can or can't let stay in their house? It's a privately owned residence and by virtue of that, a private transaction or agreement to allow residence for a short period of time should be none of the city's concern.There are property management companies that also are delving into the AirBnB marketplace, but again, it's a legal legitimate business model. If these companies want to purchase homes to rent, so be it. The average Angeleno can't afford to rent a house in Santa Monica, which run multiple thousands per month, let alone spend the millions it would take to buy one. So this policy is only "protecting" the very, very wealthy in all honesty. The rental rates aren't going to skyrocket because expensive homes are being rented out to AirBnB, and the model that rents weekly or daily apartments by the beach has existed for decades.This move simply reeks of crony capitalist pressure from the hotel chains. Travel companies, retailers and everyone else in a consumer or tourist-centric business in Los Angeles only stands to benefit from more options for tourists, which may be cheaper than the $400 a night rooms at the beach hotels.It's the Uber/Lyft fight all over again, but in the hospitality arena, and as usual the money trail can likely be followed to the cronies looking to protect their racket.The Lions of Liberty are on Twitter, Facebook & Google+Check out our YouTube Channel!Receive access to ALL of our EXCLUSIVE bonus audio content – including “Conspiracy Corner”, “Degenerate Gamblers” and the “League of Liberty Podcast” by joining the Lions of Liberty Pride and supporting us on Patreon!Join our Facebook Group: The Lions of Liberty Forum
