Editor’s Note: This is an open letter to Santa Monica Mayor Kevin McKeown from Los Angeles Short Term Rental Alliance regarding short term rentals in Santa Monica.
Last spring, the Santa Monica City Council made headlines when it banned the short term rental of a full unit or house for less than 30 days. Now, last month, the council voted unanimously to amend the equally draconian 2004 prohibition of corporate rentals with a ban on advertising them. Is this short sighted? What could be next?
We at the Los Angeles Short Term Rental Alliance (LASTRA) know that short term rentals and home sharing have been prevalent in Santa Monica since Ford came out with the Model T. The mild climate and close proximity to Hollywood provided a quick getaway where many people bought second homes. For decades, owners rented out those second homes. Now, Santa Monica still boasts a hearty tourism industry, along with Silicon Beach, the area by the coast between Santa Monica and Venice that is home to hundreds of start-ups that bring millions of dollars a year to the area.
With companies like Google, BuzzFeed and Demand Media having contractors coming to their offices in Santa Monica, the demand for short term rentals is only growing.
Instead of trying to restrict modern ways by putting more regulations on short term rentals, Santa Monica should be more welcoming and tap into the economic gains of the area. This way of doing business goes against the online platform companies use that call Santa Monica home. At what point are you driving business out of town?
Residents have invested considerable time and money, sometimes for generations, in Santa Monica. Now the city is impeding on their income. Some families have used the money they received from renting their vacation home to put their children through college. Others, use the money to help augment a fixed income in their old age.
These heavy-handed rules are not improving housing supply or lowering rents.
Although Santa Monica still allows home sharing in a home that is owner-occupied, that home must now be registered with the city and is subject to a 14% transient occupancy tax. Of all the rentals available in the city this year, the median days available for rental in Santa Monica were 118 with 23 days as a median rental.
In April 2015, Airdna identified 1245 separate listings on Airbnb in Santa Monica, however this number is misleading – only 652 actually had any bookings. This is a common mistake as many listings are not active, so those listings should be excluded when adding up number of rooms available. During that month, 8,324 nights booked with Airbnb in Santa Monica, split over 2,086 separate bookings. That works out as 277 bookings a night on average. 71% of these were in entire properties, 27% in private rooms and the remainder in shared rooms. The average length of stay is 4.49 nights.
Airbnb rentals had an ADR of $205, occupancy of 61% and RevPAR of $125. LASTRA believes removing the ban on short term rentals would enhance the community and not detract from it. Instead of trying to strengthen an antiquated corporate rental law, Santa Monica should be looking at ways to strengthen corporate rentals. The city could use the over $3 million in potential transient occupancy tax revenue to allocate towards affordable housing instead of hiring three new bureaucrats with a budget of $410,000 for the first year.
LASTRA welcomes the opportunity to meet with you and any and council members and staffs to discuss reasonable regulation and responsible management and how we maximize opportunities for all residents of Santa Monica.
LASTRA Director of Operations