I own a rental property in SM. It is the income from this property that funds our lives and our community activity. I don’t like short-term rentals. There is wear and tear on the building during move in and move out. I never seek short-term rentals out, but, occasionally while advertising for long term rentals, I have been offered short-term rentals and have taken them. This new ordinance cuts off this potential revenue stream to me.
As a rental property owner, I find the recently passed minimum lease term ordinance particularly galling. I was late to the party on this issue because of the pandemic. This ordinance passed under my radar.
If the SM City Council wants to address a housing issue in Santa Monica, then the City of Santa Monica should fund the remedies City Council comes up with. It is unfair for the Council to put the remedy and the cost of the remedy on property owners. I think this ordinance is unenforceable. I am told one property owner is going to file a lawsuit challenging the ordinance. The city is wading into turbulent waters with this ordinance. When the city starts interfering with a person’s property and livelihood, people get litigious.
I would like to offer some amendments to the recently passed ordinance.
First, I think seniors need to be exempt from this law. Now that we are in the so called “golden years”, we don’t need any impediment on our ability to fund our life. Seniors get to take the tax basis of their home to another house. Seniors get a pass to park in the beach lots. Seniors should be exempt from this ordinance. I have worked long and hard to acquire the property we have. Don’t penalize us for not throwing away our money in the past, but rather investing it in rental property.
Second, ‘the carrot and the stick’ approach. City Council is hitting the property owners with a ‘stick’ of potential fines and jail term for short term rentals. (What a load of crap. Six months in jail for renting a furnished property! We cannot even jail the real criminals in this city.) Rather than ‘the stick’, why not offer the property owners ‘a carrot’ of an exemption for existing owners of three or less short-term rentals.
Third, there should be an exemption for renting to students that attend college and want to live in Santa Monica? This ordinance makes it illegal for a property owner to rent to them for nine months.
Fourth, there should be an exemption for teachers, college professors, ministers that go away on sabbatical. Should they not be allowed to rent their homes while they are away?
Fifth, some of the beach short term rentals are big ticket items … $10,000 to $50,000+ a month. I don’t think many people are going to be willing to pay this sort of rent for a 12 month lease in order to have a house available for their family for the summer. This level of rental should not fall under this ordinance. If the City is “committed to ensuring that Santa Monica is an inclusive” community, that includes wealthy people. Face it. We are a beach community. We are blessed with some of the most gorgeous beaches in the world. As a result, people come from all over the world to visit Santa Monica. Pre-pandemic, 6,000,000 people a year visited the Santa Monica Pier. A lot of these people want to rent a home in Santa Monica short term. These short-term renters spend money in restaurants and bars. They shop the 3rd St. Promenade. They buy tickets to movies (well, they used to). They buy food at our farmers markets and grocery stores. These short-term big-ticket renters are tax generators for our city and our city that is hurting for income. This ill thought out over-reaching ordinance cuts off this valuable revenue stream … at a time when our city needs all the income it can get.
I know I am not the only rental property owner in Santa Monica that is upset about this ordinance. A lot of Santa Monica property owners have gone through the agony of construction to build ADUs on their property. Now comes the Santa Monica City Council to tell them that they cannot rent their new ADU short term. Well done City Council. The drum beat to ‘vote them all out’ gets louder and louder.
I understand the logic in making it illegal for large companies to empty their properties of long established tenants to rent short term for the summer. That said, there are numerous people that live on or near the beach that depend on the income from their short-term summer rentals to live. I know a widow that goes to the east coast every summer and rents her house out short term. She depends on this income to live. This ordinance deprives her of the money which she depends on to live. This is a bad ordinance.
I took the risk to purchase my property. I paid for the renovation of my property. I pay the mortgage for my property. I pay the insurance for my property. I pay the taxes on my property. I do not need an impediment from the Santa Monica City Council in my making a decent return on my property.
I would add one thing to this list of exemptions. We have some great healthcare facilities here in Santa Monica. People come here from all over the world for healthcare. Midterm rentals to them should be exempt.
Lastly, the City Council passed this ordinance knowing it is flawed. IMHO they did so because it is election season.