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A Look at Santa Monica Shows Possible Impact on WeHo of Change in Short-Term Rental Ordinance

Thu, Sep 21, 2017   By David Warren    1 Comment

short-term rentals, airbnb
Santa Monica’s experience with short-term rentals suggests partial legalization and increased enforcement can change the mix and growth of rentals, but it may be harder to cut the number dramatically. That is according to a report by WeHo by the Numbers based on data from an independent website called Inside Airbnb and other sources.

West Hollywood currently prohibits short-term rentals of residential units for 30 days or less. The city is planning to legalize at least some hosted home-sharing, in which the resident stays with the guests. At the same time, the city is going to strengthen enforcement with the help of a specialized contractor, Host Compliance.

Two years ago, Santa Monica headed down a similar path. It legalized hosted home-sharing, started issuing licenses (over 160 currently) and dedicated three staff members to enforcement. In the first few months of active enforcement, it collected over $440,000 in taxes and fines. As of July 2016, Santa Monica had issued 893 citations for violating its ordinance. About 70% of those citations went to Airbnb and other online listing platforms. That same month, the city won a high-profile misdemeanor conviction of a multi-property Airbnb host.

According to Host Compliance, there were 1,047 short-term rental listings in Santa Monica in March 2017. For a comparison, it counted 1,010 in West Hollywood that month, representing 839 unique properties.

The WeHo by the Numbers report tries to quantify the impact of the changes by Santa Monica by analyzing the number and type of Airbnb listings over the last two years. The available data from Inside Airbnb is limited: listings from 11 days spread over two years. So the results are not definitive.

The mix of listings in Santa Monica has shifted toward those most likely to be hosted home-sharing. They are listings for part of the home, because the resident has to stay there too. Partial-home listings were about a third of the Santa Monica total in May 2015. By May 2017, they were closer to half.

The shift has been driven by growth in partial-home listings. The number increased 50% in two years, to more than 400. Most of the growth happened in the first year after legalization.

Santa Monica’s 50% growth in partial-home listings was still lower than most communities in the area, except West Hollywood at about 35%. Venice’s growth was a few points higher than Santa Monica’s. Beverly Hills and Culver City were between 70% and 80%. Hollywood was over 90%.

The report also looks at listings for an entire home. Those listings are less likely to be home-sharing. (There are exceptions, such as a guesthouse marketed as an entire home, even though the host residents are still on the property.) The limited data suggests that the number of whole-home listings in Santa Monica has gone down and then back up. There were probably about 500 of them in May 2017, a 15% decline from two years earlier.

A 15% decline is notable compared to the increases seen in nearby areas. In two years, the number of whole-home listings grew about 40% in West Hollywood, roughly 45% in Venice, and about 60% in Beverly Hills. It doubled in Culver City and Hollywood.

When the partial-home and whole-home numbers are combined, the total has not changed dramatically compared to two years earlier. However, Santa Monica has avoided the rapid growth in Airbnb listings seen in nearby communities. The total number of listings grew just 7% in two years, compared to about 40% in West Hollywood, almost 50% in Venice, roughly 65% in Beverly Hills, almost 90% in Culver City, and over 100% in Hollywood.

For more information, see the full report What do Santa Monica’s results suggest we might expect from partial legalization of short-term rentals?

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David Warren

About David Warren

David Warren, the founder of WeHo by the Numbers, is a West Hollywood resident who explores community issues and the city government’s work through numbers. He welcomes suggestions and corrections at WeHoByTheNumbers.com.

View all posts by David Warren →

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One Comment

  1. SEEKER OF RIGHTEOUSNESSThu, Sep 21, 2017 at 10:25 am

    I have seen near where we live in West Hollywood. For owner of, say, a house with a rental unit in back, more profitable and no hassle with collecting, rent, evictions, etc. For the VAST apartment population, even FEWER apartments on the market. Although a libertarian in some respects, I must side with the City. There should be a very NARROW and strict definition of what is allowable for AirBed&Bath and similar sites. The bottom line is that the owners KNOW beforehand the rules (or they should) so buyer BEWARE, that is, if you don’t like the housing rules in W Hwd, then DON’T BUY! Soon you are going to hear “NO FAIR!”.

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