Last week, Santa Monica convicted its first Airbnb host since it passed new short-term rental regulations last year. The law, regarded as one of the strictest in the country, prevents homeowners from renting out entire residences for less than 30 days at a time. However, homeowners can still rent out portions of their home for short periods, as long as the homeowner is present.
The violator received multiple citations and fines from the city’s new Vacation Rental Enforcement Task Force before entering a July 5 plea deal, in which he paid $3,500 in fines and agreed to stop renting properties within Santa Monica.
The conviction comes as the Los Angeles City Planning Commission is considering its own Airbnb regulations, and serves as a reminder that the city needs to prioritize enforceability in its new law. In this sense, Los Angeles would do well to learn from Santa Monica’s successes and failures.
As the Los Angeles Times notes, short-term rentals are already illegal in many parts of the city, but enforcement has been difficult as home-sharing has exploded in popularity in touristy areas throughout the Southland.
Los Angeles’ new rules include several restrictions on short and long-term rentals, and apply different rules to different types of homes. For example, Angelenos can rent out their primary residence short-term for up to 180 days each year and can rent out second homes for a maximum of 15 days each year.
But in order for the new regulations to effectively deter short-term rental abuses, the necessary infrastructure needs to be in place before the regulations take effect. This extra manpower allows the city to monitor rentals and find out who’s breaking the law, as well as steep penalties and fines to deter potential violators.
Santa Monica has poured the manpower necessary to properly enforce its regulations by setting up a Vacation Rental Enforcement Task Force to monitor the local vacation rental market and send out citations and fines if necessary.
Likewise, Los Angeles has put forth a proposal that requires Airbnb and other rental companies provide data about the types of units rented and for how long, which they have previously been reluctant to hand over. Although it’s raised eyebrows among consumer privacy advocates, the measure is necessary for the city to effectively keep track of violations.
However, the penalty itself also needs to be severe enough to seriously deter potential violators. When asked why he did not remove his five properties from the market after the new laws passed, the Santa Monica’s first Airbnb convict said that he would be able to pay the $3,500 fine with the monthly income from one house, removing any incentive to pull out of the market. “The money’s too good,” he said.
Under the Los Angeles rule, rental hosts who fail to register with the city or otherwise break the rules would face $200 in fines per day of rental. However, this should be made steeper in order to act as a serious deterrence. For example, the city’s $2,000 per day penalty for hosts who rent their properties beyond the maximum number of days allowed is much more intimidating and would act as a serious financial disincentive.
Before Los Angeles enacts new short-term rental regulation, it needs to make sure it’s able to back up strict new rules with equally strict penalties.