April 12, 2024 Breaking News, Latest News, and Videos

Column: Regulating Medium-Term Rentals

By Avi Sinai

Last month Santa Monica City Council announced that it is considering stricter regulations against ‘medium-term rentals.’ This is just one decision in a long list of problematic solutions that don’t address the root of the city’s severe housing shortage.

What are Medium-Term Rentals?

Medium-term rentals (also known as ‘corporate housing’) are residential term leases that are longer than 30 days but shorter than 1 year. These lease structures become increasingly popular due to the popularity of platforms like Airbnb and millennials’ desire to stay flexible. So if landlords are happy with the higher rents, and renters are happy to pay for flexibility, why is Santa Monica city council taking action? City officials and renter rights advocates argue that corporate housing is taking the place of long term housing units in a city that is already in a deep shortage of affordable housing.

Why did Landlords Turn to Medium and Short Term Rentals?

Citing profits and landlord greed are the easy and obvious reasons, but they don’t paint the whole picture. Landlords make more per month with medium-term rentals, but vacancy gaps, transaction costs, cleaning and extra management fees (not to mention thousands of dollars in furniture cost) can eat up any extra profit quickly.

Apartment building owners, like all real estate investors, would prefer long term tenants if everything else is equal. It requires less management and more predictability of income. In addition, most traditional banks refuse to recognize short and medium term income from home sharing sites. This prompted owners to resort to private hard money lenders for a creative capital solution.

A more complicated reason to avoid long term tenancy is the fear of rent control expansion. A recent state-wide push to expand rent control laws (Proposition 10) was defeated, but property owners are taking note of rising populism and backlash over rising rents. Cities continue to explore ways to expand regulations over the housing market – and landlords shying away from long term tenancies is a proactive step to combat the next regulatory wave.

Alternative Solution to the City’s Housing Shortage

The best way to lower housing costs for renters is to expand the housing supply dramatically, and specifically incentivize developers to provide affordable units to middle-class renters – not just luxury units and low-income units. Tenants should have protections against price gouging and housing stability for young families and seniors should be a priority for any city council – especially in a city where median housing prices are in the top 5 percent of the nation. But 40 years of rent control has done little to stop rents from rising. It only protected those who chose not to move away from their apartment. Stopping medium terms rentals, even if successful – is a band-aid solution where surgery is the right course.

About the author: Avi Sinai is the principal of HM Capital, a Los Angeles company specializes in hard money real estate loan and private lending. To contact HM Capital you can call (530) 436-5630, or email all inquiries to avi@hardmoola.com

Related Posts

Registration Now Open for Summer at New Roads

April 12, 2024

April 12, 2024

New Roads School is accepting registration for its summer program, a vibrant selection of classes and camps curated to meet...

CodeREV Inspires Kids to Code

April 12, 2024

April 12, 2024

Budding coders, robotics engineers, game developers, animators and STEM campers are invited to join CodeREV this summer for a memorable...

YMCA Santa Monica: When School Is Out, Camp Is In

April 12, 2024

April 12, 2024

As the Santa Monica-Malibu Unified School District nears its end,  YMCA Santa Monica is setting up for its popular Summer...

Top 4 Party Boat Rentals in San Diego

April 12, 2024

April 12, 2024

Here’s a rundown of the top 4 party boat rentals that will elevate any event to an unforgettable experience: Alana...

Venice Shorts: Media Trucks Scour Canals After Saturday’s Violent Assaults

April 12, 2024

April 12, 2024

Just How Safe Is Venice? By Nick Antonicello Car vandalism, tool theft, break-ins, property theft, pick-pocketing at the beach, rampant...

Accents Owner Steven Hanna Reflects on Decades Long Legacy

April 12, 2024

April 12, 2024

For 37 years, Accents Jewelry has transcended mere commerce, evolving into a vibrant community, a crucible of creativity, and a...

Santa Monica Breakfast Club Hosts 8th Annual Mad Hatter Tea Party

April 12, 2024

April 12, 2024

Whimsical Event Raises Funds for Local Families’ Dental Care Needs The Santa Monica Breakfast Club is gearing up for its...

Council Advances Plans for 120+ Affordable Apartments

April 11, 2024

April 11, 2024

The Development Aims to Serve Individuals and Families Earning Between 30 to 80% of the Area Median Income The City...

(Video) The New Menu Experience at Cassia Restaurant in Santa Monica is Delicious

April 11, 2024

April 11, 2024

The Southeast Asian dishes satisfy. Friendly ambiance, flavorful food, subtle cocktails, beer and wine, and scrumptious desserts. @smmirrornews The New...

Lyft Driver Charged with Sexual Assault Following Investigation

April 10, 2024

April 10, 2024

The Incident Occured in September By Zach Armstrong A Lyft driver who allegedly sexually assaulted a woman last year has...

SB 1509 Advances: Malibu Officials Rally Behind Negligent Operator Treatment Bill

April 10, 2024

April 10, 2024

Senator Stern’s Legislation Gains Momentum in Effort to Curb Reckless Driving SB 1509, the Negligent Operator Treatment bill spearheaded by...

“New Girl” Actor Sells Palisades Abode for $3.1M

April 10, 2024

April 10, 2024

He and His Wife Undertook a Renovation of the Unique, Two-Story Abode, Transforming It Into a Picturesque Beachfront Dwelling Actor...

Nationwide Retail Theft Scheme Leads to Five-Year Prison Sentence for Santa Monica Man

April 10, 2024

April 10, 2024

The Man Led a Group That Hoodwinked Department Stores Across 23 States By Zach Armstrong A Santa Monica man was...

Two Women Assaulted and Injured Near Venice Canals, LAPD Initiates Investigation

April 10, 2024

April 10, 2024

The Venice Community Will See an Increase in Patrols Along With Black and White Police Vehicles By Zach Armstrong An...

Report: State Farm’s California Policy Shakeup to Hit Palisades the Hardest

April 10, 2024

April 10, 2024

Customers Affected Will Receive Notifications Starting July 3 for Property Holders and August 20 for Commercial Apartment Holders The San...