Santa Monica to Propose Expansion of Legal Airbnb Units

Santa Monica’s City Council is set to introduce an ordinance that would allow hosts on short-term rental platforms such as Airbnb to operate legally.

Currently, the beachside city has “a longstanding prohibition against vacation rentals,” defined as 30 days or less of the entirety or part of a home “for exclusive transient use,” according to the city’s website. However, it does allow “home-sharing,” which is a rental of 31 consecutive days or less of one or more bedrooms while the host lives on-site throughout the visitor’s stay, provided the host has a business license.

In a hearing set for Tuesday evening, city officials are expected to discuss an amendment that would provide a pathway for hosts to obtain business licenses under the city’s home-share legalization program. 

The program, a temporary version of which was adopted last October, gave business licenses to “a very limited number” of hosts and provided incentives for operators to obtain proper building permits. That version of the ordinance, which was a stopgap as the city decided on home-share-related building code amendments, is set to expire on June 30. 

If the ordinance passes, it would give the city authority to issue home-share licenses.  

Also, before the legalization program was put in place, property owners were prohibited from renting out accessory dwelling units, or ADU, under the city’s building regulations. At the meeting, the City Council will discuss allowing short-term rentals for ADUs and detached accessory buildings that are located more than 6 feet from a main building occupied by a host. The proposal essentially allows hosts to rent out accessory units anywhere on their properties. The city currently requires accessory buildings for home-sharing to be within 6 feet of a host’s primary residence.

Santa Monica and short-term rental startups Airbnb and HomeAway previously engaged in a legal fight over the city’s home-sharing ordinance. This led to an agreement, formalized in December 2019, between the city and Airbnb. As part of the deal, Airbnb agreed to require its hosts to obtain a business permit from the city. The agreement also barred hosts from listing multiple properties. The deal also gave Santa Monica the authority to charge Airbnb guests in the city a $2 fee per night, with the money being funneled to the city’s affordable housing program.