Santa Monica (Credit: Pexels)
A report by the city of Santa Monica details the uphill battle the beachside community must wage against illegal short-term rentals, and the novel methods homeowners and tenants deploy to skirt city taxes and laws regulating them.
The study says that only 187 of the 950 estimated short-term rentals in Santa Monica between June 2015 and October 2017 were licensed with the city according to its 2015 Home-Sharing Ordinance Rules.
The local ordinance only allows home-sharing, but only when at least one listed resident is present during the entirety of the rental. Hosts require a business license and both hosts and renters must pay a tax.
The findings claim that Airbnb and hosts have made around $31 million over the last two years from Santa Monica rentals. It also says the city has collected roughly $4.6 million in taxes from Airbnb and other short-term rental platforms (such as VRBO and HomeAway) since the ordinance took effect.
The city has collected around $81,000 in fines levied on hosts they do catch violating the ordinance. The city upped its fines from $75 to $500 in January 2017 to discourage illegal listings.
Airbnb hosts in Los Angeles took in more than hosts in any other city in California in 2016, according to Airbnb. They raked in a combined total of $262.6 million that year.
Airbnb has vigorously fought the ordinance, but lost the latest round in March 2017, when a Los Angeles County Superior Court judge upheld a number of fines the city levied against the company. The study was first reported by the Santa Monica Daily Press.
To avoid the rules, some hosts will take down their listings during City Hall business hours so city employees don’t find them. Others claim their listings are for properties in Los Angeles proper.
Only one in five of those registered hosts are complying with the regulations in that law, according to the report.
Local governments, property owners, and tenant groups have bombarded Airbnb with lawsuits over the years. Last month, Airbnb won in the U.S. Court of Appeals for the Ninth Circuit when a judge tossed a suit by Denver-based REIT Aimco over rentals at Park La Brea properties.
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