One of the chief issues facing local governments as they contend with regulation of short-term rental marketplaces is the trouble of enforcing whatever framework they develop. After passing tough regulations last week, the City of Santa Monica has announced it will create an enforcement department to patrol short-term rentals and enforce the terms of the ordinance. While the action is bold, and reportedly expensive (the City intends to spend around $410,000 annually on enforcement), it also provides a workable solution to the problems posed by hard-to-track, short-term rentals that may violate a city’s municipal code.
The Santa Monica ordinance prohibits property owners from renting their homes unless they are present in the unit throughout the rental period. It also mandates that home-sharing platforms, like Airbnb and VRBO, collect and remit all transient occupancy taxes owed by hosts and guests using the platform. Beyond that, it requires home-sharing platforms to disclose the names, addresses, length of stay and price for each short-term rental in the city. The regulations are tough, and the city estimates this will ban around 80 percent of the listings currently renting in the jurisdiction.
Which explains why the City plans to hire three full-time staffers to review all online vacation rental marketplaces to identify unlawful rentals and enforce the new ordinance. The City intends to take a proactive approach to ensuring compliance, rather than relying on mandated self-reporting or on compliance by platforms with its disclosure requirements.
This plan still has its challenges. For one thing, platforms do not list the address of their rentals, which means staff will be required to look at photos on the sites and then drive the City’s streets attempting to identify unlawful rentals. Further, it will be difficult for the City to effectively determine whether renters are present during all rentals, an issue that confounded enforcement of San Francisco’s short-term rental law.
However, creating a dedicated team focused on tracking down violators and enforcing compliance is likely to have better results than simply relying on compliance by hosts and the hosting platform. Questions about how to enforce regulations of online vacation rental marketplaces are the next big challenge for cities hoping to regulate effectively. Santa Monica’s enforcement department will not solve all the problems facing the City as it strives to ensure compliance with the new ordinance, but it is likely to increase the effectiveness of the City’s efforts to identify all properties within its jurisdiction being rented with these services, without worrying about whether home-sharing platforms or their users are voluntarily abiding by its laws.
