OCEAN AVE — Despite City Hall’s ban on offering private residences as short-term vacation rentals, a quick Internet search makes it clear that options abound for families that want to visit Santa Monica but would rather avoid the pricey hotels — and skip out on the taxes that make room rates even more expensive.
Companies like Vacation Rentals by Owner, which operates the website www.vrbo.com, have scores of properties available in Santa Monica, many of them offered for nightly and weekly stays.
To City Hall officials, the practice of renting out apartments and condos to vacationers is both a drain on revenue — because these unlicensed enterprises don’t pay the 14 percent transient occupancy tax that hotels are required to pay — and a violation of a policy aimed at preserving the housing stock and keeping neighborhoods cohesive.
Short term rentals, defined as properties available for terms shorter than 30 days, are barred in all residential zones, said City Hall’s code enforcement administrator, Mike Magdaleno.
But attaining compliance with the ordinance has long bedeviled officials, especially since the Internet has made it far easier to cheaply advertise properties.
Magdaleno said his department has issued 24 “notices of violation” related to short-term rentals in the past year, usually in response to complaints.
Magdaleno declined to estimate how many people are violating the ban, but acknowledged that City Hall doesn’t actively enforce the law.
“So far we’ve been instructed to be reactive,” he said. “I haven’t received any instruction to go out and try and proactively [enforce the ban].”
Continuing to flaunt the ordinance after receiving a warning could bring a $650 fine for each day an illegal listing remains online, according to Magdaleno, but the department generally doesn’t issue citations.
“I haven’t seen any cases where we’ve had to collect any money. They’ve always stopped when we’ve caught them,” he said.
Concern about vacation rental ban violations was raised last year, after property owners John and Donna Heidt, who purchased and restored a landmarked beach cottage for use as a second home, sought City Hall’s permission to rent the property out to vacationers during part of the year.
In what some observers called an attempt to get around City Hall’s short-term rental ban, the couple argued their stewardship of the historic property should allow them to designate the cottage a bed and breakfast, though their plan was to operate it as a vacation rental.
The City Council this month declined to issue the permit, sending the Heidt’s proposal back to the Planning Commission for further review.
Residents who live near the landmarked beach cottage in Ocean Park argued that allowing the Heidt’s to rent their cottage out would go against City Hall’s policy meant to protect residential areas from commercial activity, and could encourage others to try to thwart the ban.
Attempts to reach John Heidt on Friday were not successful, but it appears he’s one of a minority of property owners in the city whose ability to offer a residential property as a vacation rental has been contested.
Calls to several people this week who were advertising short-term rentals in Santa Monica online revealed the owners were ignorant of, or else unconcerned about, City Hall’s ban on the activity.
One person who was offering a two-bedroom condo on Pearl Street for $2,000 per week through a website pointed out, “We don’t charge any tax and there are no other fees,” in her description of the deal. She said she’s never been bothered by City Hall.
“I’ve been e-mailing staff about this for years because it drives me nuts. I see the ads, too,” said City Councilman Kevin McKeown.
He said in the past six months he’s asked the finance department to look into changing City Hall’s enforcement approach, which he said should target people who have turned condos into makeshift hotels, rather than individuals who may rent their primary residences out for a week or two per year while they’re away on vacation or on business.
“I don’t want to go after people who are privately subletting, I’m interested in going after people who have openly and willingly converted residential property into a business,” he said.
Since no one knows exactly how widespread violations of the ban are, Magdaleno said he couldn’t predict how successful more proactive enforcement efforts against violators of the vacation rental ban could potentially be. But he said while the Internet has made it easier for property owners to put their homes up for rent, it’s also made it easier to investigate possible violations.
While there’s no immediate plan for policymakers to discuss the short-term rental ban, Planning Commissioner Ted Winterer said the ordinance may need to be refined to better balance property owners’ rights with adequate protection of neighborhoods.
“If someone wants to rent their own home for a week or two, I think we need to look at that very carefully” and possibly allow it, he said.
Further consideration of the Heidt’s beach cottage, which is set to again come before the Planning Commission, could lead to a closer examination of the city’s ordinance, Winterer said.
“I think that will more than likely inform a larger discussion of these issues,” he said.
Perhaps surprisingly, the issue of illegal vacation rentals in Santa Monica doesn’t seem to have riled the hotel industry.
Brian Chase, the Santa Monica Chamber of Commerce’s director of government affairs, said members in the hospitality business have never raised concerns about lax enforcement of the short-term rental ban.
nickt@www.smdp.com
