Homeowners in Santa Monica who wish to rent out a room or backyard cottage on home-booking websites like Airbnb will have to publicly register with the City, according to new language in the ordinance passed by the City Council Tuesday.
Up until now, all home-shares had to register with the City but could opt out of publicizing their decision. The public list is part of an effort to track down and cite illegal online vacation rentals. Under a controversial law passed in 2015, the City banned transforming any residential property into a vacation home but allowed home-sharing where the host remains in the house while guests stay.
Under the ordinance, the websites themselves are responsible for collecting Transit Occupancy Taxes and can be held accountable for illegal listings. City staff estimate the proposed changes will reduce Transit Occupancy Tax revenue by $1.3 million to $1.8 million dollars as the website come into compliance and eliminate illegal rentals. To put that number in perspective, Santa Monica brought in about $51 million in taxes from hotels last year.
After a short discussion with the interim City Attorney, the City Council unanimously voted to keep a provision in the law that requires home-booking websites to hand over a list of home shares and vacation rentals in Santa Monica for cross-reference. Last year, Airbnb sued Santa Monica, arguing the provision is unconstitutional.
“In other contexts, courts have ruled that obligating businesses to disclose such information violates the Fourth Amendment, unless you have a subpoena,” Interim City Attorney Joseph Lawrence explained to the Council. “If the City Council doesn’t care, I suppose you could leave it in, but it leaves a section that is vulnerable and a section that Airbnb and HomeAway have focused on.”
In the lawsuit filed with the U.S. District Court in Los Angeles, lawyers for Airbnb said Santa Monica’s vacation rental ban violated multiple federal laws because “Airbnb does not manage, operate, lease or own hosts’ accommodations, and it is not a party to the direct agreements between guests and hosts.”
A spokeswoman from HomeAway addressed the City Council at Tuesday’s meeting and asked for a redrafting of the entire ordinance, explaining her company wanted a “seat at the table” to come up with a compromise on the law.
Councilmember Kevin McKeown balked at the notion the Council might revisit their decision to ban vacation rentals.
“We’re not going to let unshared vacation rentals decimate and devastate our neighborhoods,” McKeown said. “We’ve made a good choice. We’re trying to make it a better law.”
Internet companies like Craigslist that do not charge for booking services and only publish advertisements for short-term rentals are not subject to the rules.
Councilmembers McKeown and Tony Vasquez, Mayor Ted Winterer and Mayor Pro Tempore Gleam Davis unanimously voted in favor of the rules. Councilmember Sue Himmelrich recused herself because her husband’s law firm is representing Airbnb in the lawsuit against the City. The rest of the City Council was absent from Tuesday night’s meeting.