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Leases shorter than a year in length will soon be illegal in Santa Monica when a newly approved law takes effect next month.

Councilmembers adopted an ordinance Tuesday that states leases must be longer than 365 days and rental housing units cannot be furnished. Advertising any lease of a residential rental unit that does not comply with these requirements is also prohibited and violators will be subject to fines and penalties.

The practice of entities renting out units between 31 and 365 days is defined as medium-term leases, and city staff believes it removes valuable rental housing from the market. As a result, councilmembers said last week it was only logical for the city restrict leases to unfurnished rentals because furnished units are too easy to rent to somebody who’s only here for a short period of time.

There are firms who may look to evade the regulations, Mayor Kevin McKeown said as he advised the council to look back at the action it took five years ago with vacation rentals.

“Everybody told us what we were doing was too hard, too strict and too burdensome,” he said. “But the reality is we saved an awful lot of units in this town from being used for two or three-night stays by people who are here as tourists. I think it’s time we take this issue just as seriously…”

In addition to length minimums, the new ordinance requires all units to be rented to “natural persons” as opposed to corporations and all tenants must use the units as their permanent residence.

After approving the second reading of the ordinance, council clarified the law will take effect on Oct. 6, 2020, and it will not apply to house-sharing units that comply with the city’s regulations. Council said the law could also be revised if necessary.

“We’ve heard from some homeowners; we’ve heard some people concerned about students and some other issues. And so, I’d like to once again give direction to staff to look at some of the public info about the potential pitfalls of this ordinance,” councilmember Ted Winterer said.

“I think we’ve all received emails from people citing specific circumstances,” and how they feel the ordinance will surely impact them, McKeown added. “And I think what we have to have here is a bit of a dialogue with our community to make sure we get the final versions right.”

Councilmembers agreed and unanimously voted to direct staff to look at all the correspondence received and evaluate what modifications are needed to the law.

brennon@smdp.com