Tuesday’s City Council discussion could have big repercussion for homeowners hoping to cash in on a state law that encourages them to build extra housing on their property.

Next week the Council will decide whether homeowners in Santa Monica can list those accessory dwelling units (ADUs) on home-sharing websites like Airbnb. City staff is recommending the Council authorize language that would limit the new ADU’s occupants to long-term renters rather than tourists and vacationers.

For the past few months, Santa Monica has been working to streamline regulations and eliminate some requirements that had become a barrier to homeowners seeking to build an additional structure to provide a second income. The new regulations were mandated by a state law signed by Governor Jerry Brown last September intended to encourage the development of ADUs to increase the state housing supply. The bill, authored by Assemblymember Richard Bloom (D-Santa Monica), passed both houses of the legislature with bipartisan support.

Santa Monica has one of the strictest home-sharing ordnances in the country, effectively prohibiting homeowners from listing their property on website like Airbnb unless they are present during the stay. However, under existing law, a homeowner is allowed to rent out their accessory structure while they continue to live in the main house, according to a staff report on the ordinance.

Of the 195 active home-sharing business licenses the City has granted since requiring Airbnb users to register with the City, 37 are for “guest houses.” That means nearly 20 percent of the remaining home-sharers in the City are at risk of losing their ability to list their homes.

While the home-share ordinance dictates internet companies must collect transit occupancy taxes, homeowners themselves do not have to pay any fees to register their home-share and there are no inspections of the property. The permits last a year. The home-sharing ordinance does not regulate websites that do not charge for booking services.

Under the proposed ordinance, an accessory unit built on or after March 31 this year would constitute a separate dwelling and could not be used as an Airbnb. Older accessory dwellings would still be allowed as Airbnbs.

However, the City Council could decide to eliminate all home-sharing uses for accessory dwellings. Current homeowners who are listing their units on Airbnb would not be able to renew their permits when they expire.

A lawsuit against the City’s current rules brought by an apartment owner alleges the City’s strict regulations on home-sharing restrict access to the Coast, and are thus a violation of the California Coastal Act. A Federal District Court judge dismissed the lawsuit in May, but it will likely be refiled in a State court later this year. Similar lawsuits have been filed in beach towns up and down the coast of California as homeowners fight back against restrictive home-sharing laws.

Airbnb itself has also sued Santa Monica over the restrictive ordinance. Meanwhile, code enforcement officers have been aggressively pursuing companies and homeowners in breach of the rules.

The City Council will meet Tuesday, June 13 at 5:30 p.m. at in Council Chambers inside City Hall, 1685 Main Street.