New regulations regarding medium-term leases go into effect Tuesday, but concerns from local homeowners and students have prompted City Council to consider revisions during next week’s meeting.
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, Santa Monica councilmembers adopted an ordinance in September requiring leases to be longer than 365 days. The new rules also state rental housing units cannot be furnished and advertising any lease of a residential rental unit that does not comply with these requirements is prohibited.
Mayor Kevin McKeown said Tuesday the ordinance adopted weeks ago was necessary because “it will stop the abuses cold.”
As somebody who helped write the city’s previous, ”corporate housing” ordinance nearly 15 years ago, McKeown said he has witnessed large, well-known developers exploit loopholes and eventually evict long-time tenants, which is why he felt city leaders had to urgently pass a new ordinance. “It sent an unmistakable message with a clear and enforceable law,” McKeown said in an email, which detailed how one company immediately began advertising the last chance to secure a short-term furnished lease.
During the second reading of the ordinance, councilmember Ted Winterer directed staff to look at the “potential pitfalls of this ordinance” after homeowners reached out to him with a few concerns.
Residents have only continued to voice a need for changes to the rules in the weeks since though as some locals have headed online to share they will no longer be able to support themselves without the added income. Others reached out to share they weren’t aware of the changes until they read about it in the Daily Press.
Winterer said in an interview Tuesday, “I heard a couple of weeks ago from a professor who lives in town, and he said plans to take a sabbatical next summer. He planned to rent his home while he was away so he was unhappy that he would be precluded from doing that.”
That’s just one example, Winterer added as he detailed the story of a senior, who has rented out a furnished guesthouse for years.
“A tenant, in the middle of the night, moved out with all of the furniture so they spent a lot of money to replace the furniture but now they’re precluded from renting out a furnished guesthouse,” he said. “They’re greatly distressed and wondering if they’ll be able to hang onto their property without that income.”
McKeown noted council specifically directed staff to return with amendments that would allow homeowners to rent during sabbaticals and other situations.
But the trick is to draw clear lines on uses, “such that the ordinance remains enforceable,” McKeown said before adding, “The amendments will be heard next Tuesday, October 13th.”
A staff report detailing the proposed amendments is expected to be available on Wednesday, but Winterer already has a few discussion points in mind after spending the last few weeks talking with residents.
“I think what we have to do — if we do make changes — is clearly balance the intent of the ordinance, which is to stamp out the abuse of multi-family housing and medium-term rentals,” Winterer said. “That’s very important. But we also have to balance that against the fact that we are deep in the recession and there may be seniors who are depending on some of the rentals to stay afloat. So, we have to figure out the appropriate response.”
Update: this story has been corrected to show Winterer said “multi-family” housing not “single-family.”