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SR 09-10-2019 7D City Council Report City Council Meeting: September 10, 2019 Agenda Item: 7.D 1 of 10 To: Mayor and City Council From: David Martin, Director, Code Enforcement Subject: Introduction and First Reading of an Ordinance Amending Chapter 6.20 to Strengthen Regulation of Home-sharing Recommended Action Staff recommends: (1) that the City Council introduce for first reading the attached proposed amendments to Chapter 6.20 of the Santa Monica Municipal Code to strengthen the regulation of home-sharing within Santa Monica; and (2) that the City Council pass a resolution creating and establishing a regulatory permit fee for the initial and renewal applications for participation in the home-sharing program. Executive Summary In 2015, the City of Santa Monica adopted landmark legislation to regulate the growth of vacation rentals promoted by online applications. Given the attractiveness of our community as a destination for visitors and the adverse impact of residential properties being used as makeshift hotels, the Council adopted strict rules and established mechanisms for enforcement. At its August 27, 2019 meeting, Council directed staff to return with proposed revisions to Santa Monica’s Home-Sharing Ordinance (Santa Monica Municipal Code Chapter 6.20) to strengthen it based on lessons learned since its inception, including, for example, strengthening requirements that home-share hosts be true residents, limiting the number of home-shares that any one property owner (person or entity) can operate in the City, and limiting the numbers of guests per room and/or dwelling. In response, staff has reviewed the Home-Sharing Ordinance and proposes the attached amendments to the ordinance to include additional requirements intended to ensure that home-sharing activity is not used to convert needed permanent housing into de facto hostels or hotels and to improve the City’s ability to enforce its home-sharing law. 2 of 10 Background On May 12, 2015, Council adopted Ordinance 2484(CCS) (Attachment A) to clarify the long-standing prohibition of vacation rentals and to allow and impose regulations on home-sharing. On January 24, 2017, Council adopted Ordinance 2535(CCS) (Attachment B) to amend the Home-Sharing Ordinance to clarify certain definitions and, in response to portions of the ordinance challenged by home -sharing platforms, to limit the obligations imposed on those platforms. On June 27, 2017, Council adopted Ordinance 2547 (CCS) (Attachment C), to amend the Home-Sharing Ordinance to treat accessory dwelling units that received building permits on or after March 31, 2017 as separate dwelling units for the purpose of defining home-sharing activity. The Home-Sharing Ordinance currently defines a prohibited vacation rental as the rental of any dwelling unit, in whole or in part, for a period of 30 consecutive days or less, without any of the unit’s primary residents living on site, in the dwelling unit, throughout any visitor’s stay. The ordinance defines permitted home-sharing as an activity whereby residents host visitors in their homes, for compensation, for periods of 30 consecutive days or less, while at least one of the dwelling unit’s primary residents lives on-site, in the dwelling unit, throughout the visitors’ stay. The ordinance defines a host as any person who is an owner, lessee, or sub-lessee of a residential property or unit offered for use as a home-share. For a home-share to comply with the ordinance, the host must, among other things: obtain and maintain a City business license authorizing home-sharing activity; collect and remit Transient Occupancy Tax to the City; comply with all applicable laws, including all health, safety, building, fire protection, and rent control laws; and comply with regulations promulgated pursuant to the ordinance. The most recent version of the regulations authorized by the ordinance were promulgated effective May 29, 2019. (Attachment D.) As reflected in the recitals to each of the ordinances, Council’s intent in permitting regulated home-sharing while prohibiting vacation rentals was to strike a balance: allowing residents to supplement their income through home -sharing and providing home-share visitors with potentially more affordable accommodations, while deterring 3 of 10 landlords from evading rent control laws, evicting tenants, and converting residential units into de facto hostels or hotels, thus removing needed p ermanent housing from the market while at the same time changing the character of and undermining community ties in residential neighborhoods. Since the original ordinance was adopted, staff has had success in returning 334 vacation rental units to the permanent residential market as a result of enforcement action. Thus, for example, two Los Angeles Superior Courts have upheld the City’s enforcement actions against a landlord who attempted to engage in vacation rentals of multiple units within a single Santa Monica residential building. See Diane Hayek v. City of Santa Monica, Los Angeles Superior Court No. BS170950 (Aug. 19, 2019 Judgment incorporating decision issued July 23, 2019); Diane Hayek v. City of Santa Monica, Los Angeles Superior Court No. 17STLC02007 (May 30, 2018 Statement of Decision). The City Attorney’s Office has also been successful in defending the Home-Sharing Ordinance against legal challenges brought by online platforms Airbnb, Inc. and Homeaway.com. The lucrative nature of the vacation-rental business, however, has meant that some property owners and tenants have found creative ways to circumvent the law and take advantage of loopholes. For example, recently, several bedrooms in a five-bedroom single family residence were converted into bunkrooms with multiple beds, and the host (who also was identified as the host in online reviews for another home -share in Santa Monica) then listed the residence multiple times on a hosting platform, advertising 18 double beds (36 potential spaces) available on a nightly basis. The result was significant visitor traffic that led to trash, noise, and other complaints from neighbors. The host was complying with almost all of the requirements of the Home-Sharing Ordinance, which does not contain an express cap on the number of visitors per bedroom or dwelling unit, does not prohibit the use of hired hosts, and does not prohibit renting a home-share to multiple different groups at a time. The host, however, was not complying with Fire Code requirements (incorporated by reference in the home- sharing ordinance), which generally limit this type of residential property to a maximum 4 of 10 occupancy (including both the host and visitors) of no more than 1 person per 200 square feet. The Fire Marshall issued a Compliance Order pursuant to the current Fire Code directing the host to immediately reduce the maximum possible total number of occupants (guests and permanent residents) staying at the residence at any one time to 14. In addition, there are several Airbnb “superhosts” who have listed multiple entire apartment units in Santa Monica for short-term rental without either specifying that the host will be present throughout the stay or including the required business license number, in contravention of the home-sharing regulations. Past Council Actions Meeting Date Description 06/12/15 (Attachment A) Ordinance 2484 – Home-sharing Ordinance 01/24/17 (Attachment B) Ordinance 2535 – Home-sharing Ordinance update; amend definitions, limit obligations on hosting platforms 06/27/17 (Attachment C) Ordinance 2547 – Home-sharing Ordinance update; treatment of accessory dwelling units Discussion Re-examination of the Home-Sharing Ordinance in light of the recent incident described above and others has revealed gaps in the Home-Sharing Ordinance that are being exploited to convert needed permanent housing into de facto hostels and hotels. To address these gaps, staff recommends the following changes to the home - sharing ordinance as set forth in the proposed ame nded Ordinance (Attachment E): 1. Strengthen the residency requirements for home-sharing licenses. Approximately 30% of the 466 licensed home-share hosts are being investigated for operating vacation rental businesses under the guise of home-sharing. Although the home-sharing regulations prohibit one host from obtaining more than one home - sharing license, some hosts have obtained multiple home-sharing licenses by enlisting others to obtain them in their names. In addition, the current ordinance’s definitions of “host” and “home-sharing” arguably permit individuals, corporations, and partnerships who own or rent residential units to hire individuals on a temporary basis to live on site 5 of 10 and serve as hosts. To help reduce the number of hosts who own multiple pr operties or rent multiple apartments for the purpose of renting them out as vacation rentals instead of home-shares, and to limit the ability to use temporary hired hosts to qualify a property as home-sharing, staff proposes amendments that will permit hosting only by a natural person who is (a) either an owner or long-term resident (defined as someone who has lived in the unit at least one year and will be living there for at least one additional year at the time a home-share application is submitted); and (b) uses the dwelling unit as his or her primary residence. To assist in enforcing these requirements, staff recommends: (a) moving certain application requirements currently in the home-sharing regulations into the ordinance itself; (b) requiring hosts to amend applications within 30 days of any material change to the information contained in the original application; and (c) requiring more than one proof of primary residency, which may include motor vehicle registration, driver’s license, California state identification card, voter registration, income tax return, property tax bill, or utility bill. Home-share applicants are currently required to provide one proof of primary residency in the form of utility bill, bank statement, cable or cell phone bill, or credit card bill. Staff has experienced issues with certain of these proofs being fabricated. 2. Prohibit a host from serving as the host for more than one home -share at a time and require the host to live on site throughout the visitor’s stay. The home-sharing regulations provide that “[n]o person or entity may operate more than one Home‐Share in the City of Santa Monica.” However, the definitions of “home- sharing” and “host” in the current ordinance could be read as permitting a host to operate more than one home-share so long as one of the dwelling unit’s “primary residents lives on site.” There is no definition of either “primary residents” or “lives on site” in the ordinance. The regulations provide definitions of “lives on site” and “residents,” but only require that the host advertise that he or she will be “present” during the visitor’s stay. To clarify the applicable requirements, staff proposes amendments to the ordinance that (a) explicitly prohibit a person from acting as the “host” for more than one home-share; (b) require that the home-share occur in the dwelling unit that is the primary residence of the host and that the host lives on site 6 of 10 throughout the visitor’s stay; and (c) define “lives on site” and “primary residence” in the ordinance. As with the amendments to the ordinance aimed at strengthening the residency requirements for home-sharing licenses, these amendments will also minimize the risk that individuals will obtain multiple home-sharing licenses by enlisting others to obtain them in their names. To facilitate enforcement, staff recommends that the ordinance require the host to state in any home -share advertisement that the host lives on site and will be present throughout the visitor’s stay. 3. Prohibit a host from renting to more than one group of guests at a time. Staff has found that a number of home-share hosts have opted to reside in a portion of the dwelling unit while renting multiple rooms to several different groups of vacationers at a time. This is not currently prohibited in the language of the home-sharing law, though it results in the same negative impacts to neighborhoods as unlawful vacation rentals, can transform a residential unit into a de facto hostel or hotel, and provides greater incentives to owners and landlords to convert what would be permanent residential units into temporary-use units. To address this, staff recommends amending the ordinance to limit home-sharing to rental under one booking or by one group of visitors for any given date, whether the visitors within the group are related to one another (a family traveling together) or not (a group of friends traveling together). Other jurisdictions (such as the County of Ventura and the City of Los Angeles) include such restrictions in their respective home-share ordinances. (See Attachment F.) To facilitate enforcement, staff recommends amending the ordinance to: (a) limit hosts to posting one listing for a home-share on each hosting platform or other media outlet; and (b) require hosts to include in any advertisements for the home-share the limitation on renting to one group of visitors on any given date. 4. Limit the Occupancy of Home-Shares and the Number of Visitor Vehicles. The current ordinance requires hosts to comply with all applicable laws, i ncluding all health, safety, building, and fire protection laws, but there is no express limitation in the ordinance or the regulations regarding maximum occupancy. Nor is there any limitation on parking for home-share visitors. The California Building and Fire Codes, 7 of 10 however, limit the occupancy of a residence to, as a general matter, no more than 1 person per 200 square feet. The 2019 Building and Fire Codes, which will be in effect on January 1, 2020, also provide a limitation of no more than 10 occup ants where a homeowner rents out guest rooms. Although the current ordinance requires a host to comply with the California Building and Fire Codes, including their occupancy limitations, staff recommends that the ordinance be amended to expressly limit occupancy of any home-share (including the host, all other residents, and all visitors) to the lesser of (a) 10 persons; (b) 1 person per 200 square feet of the dwelling unit; or (c) 2 persons (excluding minor children) per bedroom. This limitation is consistent with the 2019 California Building and Fire Codes (which will take effect January 1, 2020) as well as with regulatory guidance from the Department of Housing and Urban Development that occupancy limitations of 2 persons per bedroom presumptively do not violate the Fair Housing Act’s prohibition on discrimination based on familial status. This limitation is also consistent with home-sharing laws and regulations for other jurisdictions. (See Attachment F.) In addition, staff recommends that the ordinance be amended to limit visitors’ vehicles to either (a) no more than one vehicle per bedroom rented as part of the home-share or (b) if the home-share is located in a preferential parking zone, no more than two vehicles that are required to use the visitor permits available under the Code. Such a restriction will help preserve the character of residential neighborhoods and minimize the impact on neighbors of home-shares. To assist in enforcing these requirements, staff recommends that the ordinance require that hosts (a) include the maximum permitted occupancy in their application for a business license authorizing home-sharing; and (b) include in any home-sharing advertisement the maximum permitted occupancy and the limitation on the number of visitor vehicles. 5. Require proof of insurance. Neither the Home-Sharing Ordinance nor the regulations include any insurance requirement for home-shares. This is in contrast to the requirements of a number of 8 of 10 other jurisdictions, such as the Cities of San Francisco and West Hollywood, that require insurance of at least $500,000 or that the home -sharing transactions take place through a hosting platform that offers at least that amount of insurance. (See Attachment F.) Certain platforms, such as Airbnb offer coverage of up to $1 million against third-party claims of bodily injury or property damage. To the extent the host’s homeowner’s insurance policy does not provide coverage and the host uses a hosting platform that does not offer insurance coverage, there are a number of third-party insurance companies that now provide home-sharing insurance for a nominal fee, such as Liberty Mutual Fire Insurance Co., Allstate, and Progressive. Staff recommends that the ordinance be amended (a) to require insurance of $500,000 or that the home- sharing transactions take place through a hosting platform that offers equal or greater coverage; and (b) to require that a prospective host provide proof of insurance with the application for a business license authorizing home -sharing. 6. Create a regulatory permit application fee and require permits to be renewed annually. Home-share hosts are required to pay business license tax, and they are responsible for collecting and remitting Transient Occupancy Tax if their hosting platform does not remit it on their behalf. However, there is no permit fee associated with authorization to participate in home-sharing; nor is there any requirement that the permit application be renewed or amended if any material information in the application changes. There are significant costs associated with the home-sharing program, including the costs of time spent by Code Enforcement and Finance (Business License) staff checking the validity of information provided in a permit application and time spent by code enforcement staff in enforcing against those who violate the home -sharing regulations. Staff recommends that Council establish by resolution a $100 initial permit application fee to be paid by all applicants and a $50 renewal permit application fee to cover at least a minimal portion of the costs of reviewing the home -share applications and the costs of enforcement. This proposed fee is at the lower end of what other jurisdictions impose. (See Attachment F.) The fee recommended is well below actual costs in order to encourage potential home-sharing applicants to participate in the 9 of 10 home-sharing program and not create any additional incentive for engaging in home- sharing outside the regulated program. The fee would be subject to modification in the master fee resolution considered by Council each fiscal year. Staff also recommends that (a) the authorization for home-sharing have a limited term and expire on June 30 of the year after the issuance of the business license and (b) any previously issued business licenses authorizing home-sharing expire on June 30 of the year after the effective date of the amended ordinance (i.e., June 30, 2020). Requiring hosts to renew their applications will help ensure that the hosts are in compliance with any amendments to the home-sharing ordinance that went into effect after the business license was originally issued and that permit applications are renewed or amended if any material information in the application changes. 7. Expressly require basic health and safety features and compliance with the City’s Code provisions limiting noise. Staff has found that neighbors of home-shares have complained of noise resulting from the home-share. To mitigate this negative impact of home-sharing, staff recommends amending the ordinance to expressly require compliance with the noise limitations set forth in Chapter 4.12 of the Code. In addition, to clarify that hosts are required to maintain basic health and safety features, including fire extinguishers, smoke detectors, and carbon monoxide detectors, staff recommends amending the ordinance to include this requirement. For the reasons set forth above, staff recommends that Council adopt the attached proposed ordinance (Attachment E) amending the City’s home-sharing law and the attached proposed resolution (Attachment G) setting the initial application and renewal fees for home-sharing permits. 10 of 10 Financial Impacts and Budget Actions Staff does not expect any significant budget impact related to the report’s recommended action. The proposed permit application and renewal fees will offset only a small portion of the costs incurred by Code Enforcement and Finance in reviewing applications and enforcement actions and are recommended to be set at this level to encourage participation in the regulated home-sharing program. If home-sharing were to significantly decrease as the result of the strengthened regulations, there might be a reduction in Transient Occupancy Tax (“TOT”) collected and remitted to the City; in the last fiscal year, the City collected approximately $2.2 million in TOT from licensed home-sharing. Prepared By: Denise Smith, Senior Administrative Analyst Approved Forwarded to Council Attachments: A. Ordinance 2484 B. Ordinance 2535 C. Ordinance 2547 D. HomeSharing Rules and Regulations E. PCD - Ordinance - Home-Sharing - 09.10.2019 F. Chart G. PCD Finance - Resolution - Home-Sharing Permit Fee - 09.10.2019 H. Written Comments I. PowerPoint Presentation City Council Meeting: May 12, 2015 Santa Monica, California ORDINANCE NUMBER ` qyq (CCS) City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ADDING CHAPTER 6.20 TO THE SANTA MONICA MUNICIPAL CODE CLARIFYING PROHIBITIONS AGAINST VACATION RENTALS AND IMPOSING REGULATIONS ON HOME SHARING WHEREAS, the City consists of just eight square miles of coastal land which is home to 90,000 residents, the job site of 300,000 workers, and a destination for as many as 500,000 visitors on weekends and holidays; and WHEREAS, Santa Monica's primary housing goals include preserving its housing stock and preserving the quality and character of its existing single and multi - family residential neighborhoods. Santa Monica's prosperity has always been fueled by the area's many attractive features including its cohesive and active residential neighborhoods and the diverse population which resides therein. In order to continue to flourish, the City must preserve its available housing stock and the character and charm which result, in part, from cultural, ethnic, and economic diversity of its resident population; and WHEREAS, the City must also preserve its unique sense of community which derives, in large part, from residents' active participation in civic affairs, including local government, cultural events, and educational endeavors; and 1 WHEREAS, Santa Monica's natural beauty, its charming residential communities, its vibrant commercial quarters and its world class visitor serving amenities have drawn visitors from around the United States and around the world; and WHEREAS, the City affords a diverse array of visitor - serving short term rentals, including, hotels, motels, bed and breakfasts, vacation rentals and home sharing, not all of which are currently authorized by local law; and WHEREAS, operations of vacation rentals, where residents rent -out entire units to visitors and are not present during the visitors' stays are detrimental to the community's welfare and are prohibited by local law, because occupants of such vacation rentals, when not hosted, do not have any connections to the Santa Monica community and to the residential neighborhoods in which they are visiting; and WHEREAS, the presence of such visitors within the City's residential neighborhoods can sometimes disrupt the quietude and residential character of the neighborhoods and adversely impact the community; and WHEREAS, judicial decisions have upheld local governments' authority to prohibit vacation rentals; and WHEREAS, with the recent advent of the so called "sharing economy," there is growing acceptance of the longstanding practice of "home- sharing," whereby residents host visitors in their homes for short periods of stay, for compensation, while the resident host remains present throughout the visitors' stay; and K WHEREAS, long before the advent of the sharing economy, home - sharing activities were already commonly undertaken throughout Santa Monica and throughout the United States; and WHEREAS, history has shown that home - sharing activities spread the good -will of Santa Monica worldwide and have enhanced Santa Monica's image throughout the world: and WHEREAS, home - sharing does not create the same adverse impacts as unsupervised vacation rentals because, among other things, the resident hosts are present to introduce their guests to the City's neighborhoods and regulate their guests' behavior; and WHEREAS, history has shown that home - sharing activities are relatively very small in number, when compared to the number of persons utilizing vacation rentals or the City's hotels and motels; and WHEREAS, while the City recognizes that home - sharing activities can be conducted in harmony with surrounding uses, those activities must be regulated to ensure that the small number of home - sharers stay in safe structures and do not threaten or harm the public health or welfare; and WHEREAS, any monetary compensation paid to the resident hosts for their hospitality and hosting efforts rightfully belong to such hosts and existing law authorizes the City to collect Transient Occupancy Taxes ( "TOTs ") for vacation rentals and home- sharing activities; and P WHEREAS, existing law obligates both the hosts and rental agencies or hosting platforms to collect and remit TOTS to the City. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Chapter 6.20 of the Santa Monica Municipal Code is hereby added to read as follows: Chapter 6.20 HOME SHARING AND VACATION RENTALS 6.20.010 Definitions For purposes of this Chapter, the following words or phrases shall have the following meanings: a) Home - Sharing. An activity whereby the residents host visitors in their homes, for compensation, for periods of 30 consecutive days or less, while at least one of the dwelling unit's primary residents lives on -site, in the dwelling unit, throughout the visitors' stay. b) Hosting Platform. A marketplace in whatever form or format which facilitates the Home - Sharing or Vacation Rental, through advertising, match - making or any other means, using any medium of facilitation, and from which the operator of the hosting platform derives revenues, including booking fees or advertising revenues, from providing or maintaining the marketplace. c) Vacation Rental. Rental of any dwelling unit, in whole or in part, within the City of Santa Monica, to any person(s) for exclusive transient use of 30 consecutive days or less, whereby the unit is only approved for permanent residential occupancy and not approved for transient occupancy or Home - Sharing as authorized by this rd Chapter. Rental of units within City approved hotels, motels and bed and breakfasts shall not be considered Vacation Rental. 6.20.020 Home - Sharing Authorization a) Notwithstanding any provision of this Code to the contrary, Home - Sharing shall be authorized in the City, provided that the Home - Sharing host complies with each of the following requirements: 1) Obtains and maintains at all times a City Business License authorizing Home - Sharing activity. 2) Operates the Home - Sharing activity in compliance with all Business License permit conditions, which may be imposed by the City to effectuate the purpose of this Chapter. 3) Collects and remits Transient Occupancy Tax ( "TOT'), in coordination with any Hosting Platform if utilized, to the City and complies with all City TOT requirements as set forth in Chapter 6.68 of this Code. 4) Takes responsibility for and actively prevents any nuisance activities that may take place as a result of Home - Sharing activities. 5) Complies with all applicable laws, including all health, safety, building, fire protection, and rent control laws. 6) Complies with the regulations promulgated pursuant to this Chapter. b) If any provision of this Chapter conflicts with any provision of the Zoning Ordinance codified in Article IX of this Code, the terms of this Chapter shall prevail. 5 6.20.030 Prohibitions a) No person, including any Hosting Platform operator, shall undertake, maintain, authorize, aid, facilitate or advertise any Home - Sharing activity that does not comply with Section 6.20.020 of this Code or any Vacation Rental activity. 6.20.050 Hosting Platform Responsibilities The operator / owner of any Hosting Platform shall: a) be responsible for collecting all applicable TOTs and remitting the same to the City. The Hosting Platform shall be considered an agent of the host for purposes of TOT collections and remittance responsibilities as set forth in Chapter 6.68 of this Code. b) disclose to the City on a regular basis each Home Sharing and Vacation Rental listing located in the City, the names of the persons responsible for each such listing, the address of each such listing, the length of stay for each such listing and the price paid for each stay. 6.20.080 Regulations The City Manager or his or her designee may promulgate regulations, which may include but are not limited to permit conditions, reporting requirements, inspection frequencies, enforcement procedures, advertising restrictions, disclosure requirements, or insurance requirements, to implement the provisions of this Chapter. No person shall fail to comply with any such regulation. 6.20.090 Fees The City Council may establish and set by Resolution all fees and charges as may be necessary to effectuate the purpose of this Chapter. N 6.20.100 Enforcement. a) Any person violating any provision of this Chapter shall be guilty of an infraction, which shall be punishable by a fine not exceeding two hundred fifty dollars, or a misdemeanor, which shall be punishable by a fine not exceeding five hundred dollars, or by imprisonment in the County Jail for a period not exceeding six months or by both such fine and imprisonment. b) Any person convicted of violating any provision of this Chapter in a criminal case or found to be in violation of this Chapter in a civil case brought by a law enforcement agency shall be ordered to reimburse the City and other participating law enforcement agencies their full investigative costs, pay all back TOTs, and remit all illegally obtained rental revenue to the City so that it may be returned to the Home- Sharing visitors or used to compensate victims of illegal short term rental activities. c) Any person who violates any provision of this Chapter shall be subject to administrative fines and administrative penalties pursuant to Chapter 1.09 and Chapter 1.10 of this Code. d) Any interested person may seek an injunction or other relief to prevent or remedy violations of this Chapter. The prevailing party in such an action shall be entitled to recover reasonable costs and attorney's fees. e) The remedies provided in this Section are not exclusive, and nothing in this Section shall preclude the use or application of any other remedies, penalties or procedures established by law. 1'I SECTION 2. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 3. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption. APPROVED AS TO FORM: Wildw i MAR A JO S MOUT cIE City Attorney U. Approved and adopted this 12th day of May, 2015. ILI k Kn McKeown, Mayor State of California ) County of Los Angeles ) ss. City of Santa Monica ) I, Sarah P. Gorman, City Clerk of the City of Santa Monica, do hereby certify that the foregoing Ordinance No. 2484 (CCS) had its introduction on April 28, 2015, and was adopted at the Santa Monica City Council meeting held on May 12, 2015, by the following vote: Ayes: Councilmembers: Davis, Himmelrich, O'Connor, O'Day, Winterer Mayor McKeown, Mayor Pro Tern Vazquez Noes: Councilmembers: None Absent: Councilmembers: None A summary of Ordinance No. 2484 (CCS) was duly published pursuant to California Government Code Section 40806 . ATTEST: Sara P Gorman, City Clerk City Council Report City Council Meeting: June 27, 2017 Agenda Item: 7.A 1 of 1 To: Mayor and City Council From: Alan Seltzer, Interim Assistant City Attorney, City Attorney’s Office Subject: Second Reading and Adoption of Ordinance Amending Santa Monica Municipal Code Section 6.20.010 Relating To Accessory Dwelling Units and Vacation Rentals Recommended Action Staff recommends that City Council adopt the Ordinance Amending Santa Monica Municipal Code Section 6.20.010. Executive Summary At its meeting on June 13, 2017, the City Council introduced for first reading an ordinance amending Santa Monica Municipal Code Section 6.20.010 relating to accessory dwelling units and vacation rentals. The ordinance is now presented to City Council for adoption. Prepared By: Elsa Kapsinow, Executive Assistant to the City Attorney Approved Forwarded to Council Attachments: A. Ordinance REFERENCE:    Ordinance No. 2547  (CCS)                                                                                  CITY OF SANTA MONICA HOME-SHARING ORDINANCE RULES Effective: May 29, 2019   SCOPE AND INTENT   These rules and regulations (“Rules”) established pursuant to Santa Monica Municipal Code Section 6.20 shall be followed by hosts and hosting platforms as applicable. All staff responsible for the administration and/or enforcement of the Home‐Sharing Ordinance must implement and enforce the program in keeping with these rules. These Rules are not intended to be duplicative.     TABLE OF CONTENTS    I) DEFINITIONS  II) HOME‐SHARING HOSTS REQUIREMENTS AND BUSINESS LICENSE  CONDITIONS  III) HOME‐SHARING HOSTS APPLICATION PROCEDURES  IV) HOSTING PLATFORM REQUIREMENTS      I) DEFINITIONS      a) CITY means the City of Santa Monica.  b) SMMC means the Santa Monica Municipal Code.  c) ACCESSORY  STRUCTURE  means  living  quarters,  including  lawfully  permitted  second units as defined by the Zoning Ordinance on the same premises as a  single  family  residence. Rent Control  Bootleg  Units  as  defined  in  section  9.04.18.075  of  the  SMMC  are  not  considered  Accessory  Structures  for  the  purpose of the Home Sharing Ordinance.  d) DWELLING UNIT means one or more rooms designed, occupied or intended for  occupancy as separate living quarters. A dwelling unit includes a single‐family  residence, an apartment or other leased premises, or residential condominium  unit. A dwelling unit shall include a detached Accessory Structure (e.g. guest  house) that is intended for human habitation (i.e. living quarters) when  the  entire property is designated for a single family residential use.  Dwelling unit  does not include individual hotel/motel guest rooms, condominium timeshare  units, cabins, or similar guest accommodations rented to transient guests in a  hotel, inn, or similar transient lodging establishment operated by an innkeeper.  e) GUEST or  VISITOR  means  a person who  rents  a home‐share and/or  vacation  rental.  f) HOME‐SHARE means an activity whereby the resident(s) host visitors in their  homes, for compensation, for periods of 30 consecutive days or less, while at  least one of the dwelling unit’s primary residents lives on‐site, in the dwelling  unit, throughout the visitors’ stay.  g) HOST means a person engaged in providing a home‐sharing and/or vacation rental.  h) HOSTING PLATFORM means a marketplace in whatever form or format which  facilitates the Home‐Sharing or Vacation Rental, through advertising, match‐  making or any other means, using any medium of facilitation, and from which  the operator of the hosting platform derives revenues, including booking fees or  advertising revenues, from providing or maintaining the marketplace.  i) HOUSE SWAPPING means the exchange of a house by one owner with another  owner in a different city for short periods of time by agreement between both  parties to exchange homes for a specified period of time without compensation.      j) LIVES ON SITE means being present in the dwelling unit where the home‐sharing  is   being offered, which includes but  is  not  limited  to  sleeping  overnight,  preparing and eating meals, entertaining, and engaging in other activities in the  dwelling unit that are typically enjoyed by a person in their home.  k) SHORT‐TERM RENTAL means any rental of any living accommodation that is 30  consecutive days or less, including hotels, motels, bed and breakfasts, home‐  sharing and vacation rentals.  l) RESIDENT means primary resident of a dwelling unit, when a person occupies a  dwelling, typically a house or an apartment, that serves as their primary  residence, though they may share the residence with other  people. For the  purposes of home‐sharing, a host may not have more than one residence within  the city of Santa Monica.  n) TRANSIENT OCCUPANCY TAX means local transient tax as set forth in Chapter  6.68 of the SMMC. The tax is paid by the guest when paying for their rental. The  collected TOT is then remitted to the City.  o) VACATION RENTAL means a rental of any dwelling unit, in whole or in part,  within the City of Santa Monica, to any person(s) for exclusive transient use of 30  consecutive days or less, whereby the unit is only approved for permanent  residential occupancy and not approved for  transient  occupancy  as authorized by  Chapter 6.20 of the SMMC.                                            II) HOME‐SHARING HOSTS REQUIREMENTS AND BUSINESS LICENSE CONDITIONS    A host must comply with the following conditions:    a) A Home‐Share may only be offered in a space intended for human habitation.  For example, a host may not rent a space in an accessory structure that is a  storage shed or garage as a Home‐Share.  b) A host may not advertise their home‐sharing business in any area that is exterior  to the dwelling unit where the home‐sharing is occurring.  This includes common  interior areas.  c) A host must clearly advertise that the primary resident(s) will be present in the  unit during the stay of their guests. If the advertised rental is an accessory  structure, the accessory structure may be advertised as a separate unit (aka  “entire home/apartment”) but the host must clearly advertise that the primary  resident(s) will be present on the property during the stay of their guests.  d) In  any  advertisement  of  the  Home‐Share  a  host  must  include  the  Business  License number issued by the City.  e)  No person shall provide or offer for rent any City approved home‐sharing dwelling  unit, in whole or in part, to any person(s) for exclusive transient  use of thirty  consecutive days or less. Exclusive transient use shall mean that none of the  dwelling unit’s primary residents lives on‐site, in the dwelling  unit, throughout the  visitor’s stay. Any such use shall be considered vacation rental use and thus  prohibited. This regulation shall not apply to rental of units within City approved  hotels, motels and bed and breakfasts.  f) A Home‐Share host must provide the Uniform Resource Locator (URL), (i.e. the  web site address) for any and all advertisements of the rental on the business  license application.  g)  A host must provide guests with information related to emergency exit routes if  the unit is part of a multifamily building of more than one story.  h) Transient Occupancy Taxes (TOT) shall be collected on all Home‐Sharing rentals.  If a Hosting Platform does not collect payment for the rental, hosts are solely  responsible for the collection of all applicable TOT and remittance of the collected  tax to the City on a monthly basis. If a Hosting Platform does collect payment for  rentals, then it and the host shall both have legal responsibility for the collection  and remittance of the TOT.      i) No person or entity may operate more than one Home‐Share in the City of Santa  Monica.  j) A  Home‐Sharing  applicant  must  provide  the  following  as  part  of  his/her  application:      1) Address where the Home‐Sharing will take place.  2) Type of dwelling unit (e.g. single family home, apartment, condominium).  3) Whether the applicant is a tenant or owner of the dwelling unit.  4) The total number of full time occupants of the dwelling unit.  5) A list of all persons that will be hosting.  6) Contact information for each person that will be hosting (e.g. email, cell  phone).  7) A list of each bedroom, office, den, living room, etc., in the dwelling unit.  The list shall include for each room:  i Whether or not the room will be rented  ii The maximum number of overnight guests that will be allowed  8) Whether or not the unit is rent controlled.  9) A link to the advertisement of the rental.  10) An affidavit certifying that the host will comply with all of the provisions of the  Home‐Sharing Ordinance, Business License Conditions for operating a Home‐ Share as outlined in these rules, and all relevant laws or be subject to revocation  of their Business License.      III) HOME‐SHARING HOSTS APPLICATION PROCEDURES      Any person who intends on operating a Home‐Share from their primary residence  shall complete the Home‐Sharing Registration Package (HSRP).  The HSRP shall  include all instructions, check‐lists, applications, and other educational materials  related to the Home‐Sharing Ordinance and relevant local laws that the host is  required to comply with. Home‐Share applications are exempt from the Zoning  Conformance Review fee and Home Occupancy Permitting requirements.      The applicant  must  submit all of the following  to the  Code Enforcement  Division to register:      a) Business License Home‐Sharing Application.  b) Proof of Residency. Acceptable forms of proof include: copy of a current utility      bill, cable bill, phone bill, credit card bill or bank statement showing your name  and current Santa Monica residential address.  Leases, rental agreements, or IDs  may not be accepted as proof.      IV) HOSTING PLATFORM REQUIREMENTS      a) The City may request that the operator of a hosting platform submit,  in  an  electronic comma‐delimited format or similar format such as MS Excel,  the  following information:      1) The address of each residential  unit  that  was  offered on the  operator’s  hosting platform for occupancy for tourist or  transient  use  and  was  occupied for that use during that quarterly reporting period.  2) The total number of nights that the residential unit was occupied for tourist  or transient use.  3) The amounts paid for the occupancy of that residential unit listed.  4) The name(s) of the person(s) responsible for each unit listed.  b) If the Hosting Platform collects payment for the rental, the hosting platform and  the  host shall both have legal responsibility for the collection of all applicable  TOT and remittance of the collected tax to the City on a monthly basis.      c) A Hosting Platform must provide its Santa Monica host clients or potential host  clients the following disclosure:      “On May 12, 2015, the Santa Monica City Council adopted the Home‐Sharing  Ordinance reiterating its ban on the rental of entire units as vacation rentals. The  Home‐Sharing Ordinance also legalized the short term rental of a portion of a  person’s home when the host lives on‐site throughout the visitor’s stay and when  the host obtains a business license. Hosts are also required to collect and remit  Transient Occupancy Tax (TOT) if not collected and remitted by the hosting platform.   1 City Council Meeting: September 10, 2019 Santa Monica, California ORDINANCE NUMBER_________(CCS) (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AMENDING AND REVISING CHAPTER 6.20 OF THE SANTA MONICA MUNICIPAL CODE TO STRENGTHEN REGULATION OF HOME-SHARING AND VACATION RENTALS WHEREAS, a central and significant goal for the City is preservation of its housing stock and preserving the quality and character of residential neighborhoods; and WHEREAS, Santa Monica places a high value on cohesive and active residential neighborhoods and the diverse population that resides therein; and WHEREAS, the City must preserve its available housing stock and the character and charm that result, in part, from cultural, ethnic, and economic diversity of its resident population, as a key factor in economic growth; and WHEREAS, Santa Monica's natural beauty, its charming residential communities, its vibrant commercial quarters and its world-class amenities have drawn visitors from around the United States and around the world; and WHEREAS, there is within the City a diverse array of short-term rentals for visitors, including, hotels, motels, bed and breakfasts, vacation rentals and home sharing, not all of which are lawful; and 2 WHEREAS, operations of vacation rentals, where residents rent entire units to visitors and are not present during the visitors' sta ys, frequently disrupt the quietude and residential character of the neighborhoods and adversely impact the community; and WHEREAS, home-sharing does not create the same adverse impacts as unsupervised vacation rentals when the home-shares are hosted by the owner or a long-term resident who lives on site and is present to introduce guests to the City’s neighborhoods and regulate guests’ behavior; and WHEREAS, while the City recognizes that home -sharing activities can be conducted in harmony with surrounding uses, those activities must be regulated to ensure that the home-sharing activities do not threaten or harm the public health, safety, or general welfare; and WHEREAS, on May 12, 2015, the City Council adopted Ordinance Number 2484, which added Chapter 6.20 to the Santa Monica Municipal Code and thereby preserved the City’s prohibition on vacation rentals, but authorized “home-sharing,” whereby residents host visitors in their homes for short periods of stay, for compensation, while the resident host remains present throughout the visitors ’ stay; and WHEREAS, on January 24, 2017, the City Council adopted Ordinance Number 2535CCS, which amended Chapter 6.20 to clarify its application to hosting platforms; and 3 WHEREAS, on June 27, 2017, the City Council adopted Ordinance Number 2547CCS, which further amended Chapter 6.20 to address the use of accessory dwelling units that received their building permits after March 31, 2017 as home -shares; and W HEREAS, in the time since Chapter 6.20 was first added, the City has issued over 450 business licenses authorizing home-sharing; and WHEREAS, the City is investigating approximately 30% of the licensed home - share hosts as operating vacation rental businesses under the guise of home -sharing; and WHEREAS, the City strives to strike a balance between preserving the City’s available housing stock, protecting the residential character of neighborhoods, and preventing home-shares from turning into de facto hostels and hotels, while at the same time permitting owners and long-term residents to host guests as part of a home-share; and; WHEREAS, the costs of regulating and enforcing the requirements of the home - sharing program are significant and should be borne, at least in part, by those benefitting from their participation in the home-sharing program; and WHEREAS, the City Council now wishes to amend Chapter 6.20 to clarify existing regulations and to implement various public health, safety, and general welfare regulations governing home-sharing. 4 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Santa Monica Municipal Code Chapter 6.20 is hereby amended to read as follows: 6.20.010 Definitions. For purposes of this Chapter, the following words or phrases shall have the following meanings: (a) Home-Sharing. An activity whereby the residents host visitors in their homes, for compensation, for periods of thirty consecutive days or less, while at least one of the dwelling unit’s primary residents lives on-site, in the dwelling unit, throughout the visitors’ stay. Bedroom. Any habitable space in a dwelling unit other than a kitchen or living room that is intended for or capable of being used for sleeping, is at least 70 square feet in area, is separated from other rooms by a door, and is accessible to a bathroom without crossing another bedroom. (b) Booking Transaction. Any reservation or payment service provided by a person who facilitates a home-sharing or vacation rental transaction between a prospective visitor and a host. (c) Dwelling Unit. One or more rooms designed, occupied, or intended for occupancy as separate living quarters, with full cooking, sleeping, and bathroom facilities for the exclusive use of a single household. A dwelling unit includes a single ‐family residence, and each unit of an apartment, duplex, or multiple dwelling structure designed as a separate habitation for one or more persons, but does not include units located within City-approved hotels, motels, and bed and breakfasts, as defined in section 5 9.51.030(B)(15). An accessory dwelling unit, as defined by the Zoning Ordinance section 9.31.300, which that received its building permit on or after March 31, 2017, constitutes a separate dwelling unit for the purpose of defining a home-sharing activity this Chapter. (d) Eligible Resident. Any natural person who (1) is either (i) a long-term resident of a dwelling unit or (ii) an owner of a dwelling unit and (2) uses that dwelling unit as his or her primary residence. (e) Home-Sharing. Renting for a period of 30 consecutive days or less, one or more bedrooms in a dwelling unit that is the primary residence of the host, while the host lives on-site, in the dwelling unit, throughout the visitors’ stay. A dwelling unit rented out for home-sharing is referred to as a “home-share.” (b) Host. Any person who is an owner, lessee, or sub -lessee of a residential property or unit offered for use as a vacation rental or home -share. Host also includes any person who offers, facilitates, or provides services to facilitate, a vacation rental or home-share, including, but not limited to, insurance, concierge services, catering, restaurant bookings, tours, guide services, entertainment, cleaning, property management, or maintenance of the residential property or unit regardless of whether the person is an owner, lessee, or sub-lessee of a residential property or unit offered for use as a vacation rental or home-share. Any person, other than an owner, lessee, or sub - lessee, who operates home-sharing or vacation rental activities exclusively on the Internet shall not be considered a host. (f) Host. Any natural person who is an eligible resident of a dwelling unit offered for use as a home-share. 6 (cg) Hosting Platform. A person who participates in the home-sharing or vacation rental business by collecting or receiving a fee, directly or indirectly through an agent or intermediary, for conducting a booking transaction using any medium of facilitation. (d) Booking Transaction. Any reservation or payment service provided by a person who facilitates a home-sharing or vacation rental transaction between a prospective transient user and a host. (h) Lives On Site. Maintains a physical presence in the dwelling unit, including, but not limited to, sleeping overnight, preparing and eating meals, and engaging in other activities in the dwelling unit, of the type typically maintained by a natural person in the dwelling unit in which he or she is an eligible resident. (i) Long-Term Resident. Any natural person who, as of the date a home - share application is submitted pursuant to Section 6.20.021: (1) has occupied the dwelling unit that is the subject of the home -share application as his or her primary residence for at least the prior 12 months; and (2) has either (i) if the natural person is a tenant, subtenant, lessee, or sublessee, a written rental housing agreement for the dwelling unit for a period of 12 months or more after the date the home -share application is submitted or (ii) if the natural person is not a tenant, subtenant, lessee, or sublessee, written documentation establishing that the natural person will reside at the dwelling unit for a period of 12 months or more after the date the home -share application is submitted. (ej) Owner. Any person who, alone or with others, has legal or equitable title to a dwelling unit. A person whose interest in a dwelling unit is solely that of a tenant, 7 subtenant, lessee, or sublessee under an oral or written rental housing agreement shall not be considered an owner. (k) Person. Any natural person, joint venture, joint stock company, partnership, association, club, company, corporation, business trust, or organization of any kind. (l) Primary Residence. The usual place of return for housing of an owner or long-term resident as documented by at least two of the following: motor vehicle registration, driver’s license, California state identification card, voter registration, income tax return, property tax bill, or a utility bill. A person can only have one primary residence. (f)(m) Vacation Rental. Rental of Renting for a period of 30 consecutive days or less any dwelling unit, in whole or in part, within the City of Santa Monica, to any person(s) for exclusive transient use of thirty consecutive days or less. Exclusive transient use shall mean that none no eligible resident of the dwelling unit’s primary residents lives on-site, in the dwelling unit, throughout any visitor’s stay. Rental Rentals of units located within City-approved hotels, motels, and bed and breakfasts shall not be considered vacation rentals. (n) Visitor. A natural person who rents a home-share or vacation rental. 6.20.020 Home-sharing authorization. (a) Notwithstanding any provision of this Code to the contrary, home -sharing shall be authorized in the City, provided that the host complies with each of the following requirements: (1) Obtains and maintains at all times a City home-sharing permit issued pursuant to this Chapter and a business license issued pursuant to Chapter 6.04authorizing home-sharing activity. 8 (2) Operates the home-sharing activity in compliance with all business license permit conditions, which may be imposed by the City to effectuate the purpose of for home-sharing as set forth in Section 6.20.021 and any regulations promulgated pursuant to this Chapter. (3) Collects and remits Transient Occupancy Tax (“TOT”), in coordination with any hosting platform if utilized, to the City and complies with all City TOT requirements as set forth in Chapter 6.68 of this Code. (4) Takes responsibility for and actively prevents any nuisance activities that may take place as a result of home-sharing activities. (5) Ensures that basic health and safety features are provided, including fire extinguishers, smoke detectors, and carbon monoxide detectors. (6) Does not book or rent to more than one group of visitors for any given date, whether the visitors within the group are related to one another or not. (7) Limits the occupancy of the home-share (including the host, all other eligible residents, and all visitors) to the lesser of (i) 10 persons; (ii) one person per 200 square feet of the dwelling unit; or (iii) two persons (excluding minor children) per bedroom. (8) Limits visitors to (i) no more than one vehicle per bedroom rented as part of the home-share or (ii) if the home-share is located in a preferential parking zone, no more than two vehicles that shall be required to use the visitor permits available under Chapter 3.08 of this Code. A visitor’s vehicle may be parked on site, to the extent available, or in legal street parking. 9 (9) Maintains liability insurance to cover home-sharing with minimum limits of not less than $500,000 or conducts each home -sharing transaction through a hosting platform that provides equal or greater coverage. (10) Complies with Section 6.21.022 governing advertisements of home- shares. (11) Complies with all applicable laws, including the noise limitations set forth in Chapter 4.12 of this Code, and all health, safety, building, fire protection, and rent control laws. (612) Complies with the all regulations promulgated pursuant to this Chapter. (b) All hosts and their respective properties, authorized by the City for home - sharing purposes pursuant to this Section, shall be listed on a registry created by the City and updated periodically by the City. The City shall publish the registry, and a copy sh all be sent electronically to any person upon request. (c) If any provision of this Chapter conflicts with any provision of the Zoning Ordinance codified in Article IX of this Code, the terms of this Chapter shall prevail with respect to interpretation and enforcement of this Chapter. 6.20.021 Home-sharing permit conditions. (a) Application required. To obtain a home-sharing permit for a dwelling unit, a host shall submit an application on a form to be provided by the City and signed by the host under penalty of perjury. The application for the home-sharing permit shall include the following information: (1) Address of the proposed home-share; 10 (2) Type of dwelling unit; (3) Whether the applicant is an owner or long-term resident; (4) If applicable, proof that the applicant is a long-term resident; (5) Proof that the proposed home-share is the primary residence of the applicant; (6) The name and contact information for any other eligible residents of the proposed home-share who will be serving as hosts, together with proof that each identified host is an eligible resident of the proposed home -share; (7) The square footage of the proposed home-share; (8) The number of bedrooms in the proposed home-share; (9) The maximum number of visitors per night, which shall not exceed the maximum permitted in accordance with Section 6.20.020(a)(6); (10) Proof of insurance; (11) Certification that the host will comply with all provisions of this Chapter and all regulations promulgated pursuant to this Chapter or be subject to the revocation of his or her home-sharing permit and business license; and (12) Any other information required by regulations promulgated pursuant to this Chapter. (b) Application Fee. The initial application and each renewal application for a home-sharing permit shall be accompanied by an application fee to be established by resolution by the City Council. (c) Duty to Amend Application. If there are any material changes to the information submitted on a home-sharing permit application, the host shall submit an 11 amended application on a form to be provided by the City and signed by the host under penalty of perjury within 30 days of any such changes. For the purposes of this Section, any change to the information required to be included in a home-sharing permit application by subsection (a) of this Section shall constitute a material change. Failure to submit an amended home-sharing permit application may result in revocation of the home-sharing permit and business license. (e) Term of Permit. Notwithstanding any provision of this Code to the contrary, any home-sharing permit shall be effective for same period as the term of the host’s business license. (f) Renewal of Permit. A host may renew his or her home-sharing permit by submitting a completed permit renewal application on a form to be provided by the City and signed by the host under penalty of perjury. The permit renewal application shall include all of the information required by subsection (a) of this Section. (g) No Transfer or Assignment. A home-sharing permit may not be assigned or transferred to any other person. 6.21.022 Advertisements for home-sharing. (a) The host shall include the following information in any advertisement for home - sharing: (1) The business license number issued by the City; (2) That the host lives on site and will be present in the home -share throughout the visitor’s stay; (3) The permitted occupancy of the home -share as specified in the home-sharing permit application; 12 (4) The permitted number of visitor vehicles, in accordance with Section 6.20.020(a)(8); (5) That the home-share cannot be booked or rented to more than one group of visitors for any given date, whether the visitors within the group are related to one another or not; and (6) Any other information required by regulations promulgated pursuant to this Chapter. (b) A host is limited to posting one listing for the home -share on each hosting platform or other media outlet. If a host posts a listing for the home -share on multiple hosting platforms or other media outlets, only one listing may be booked for any given date. (c) No advertisements regarding the availability of a dwelling unit for home - sharing shall be posted in or on any exterior area of the dwelling unit, any exterior area of any other dwelling unit on the same lot, or the lot on which the dwelling unit is located. 6.20.030 Prohibitions. (a) No host person shall undertake, maintain, authorize, aid, facilitate or advertise any vacation rental activity or any home-sharing activity that does not comply with Section 6.20.020 of this Code. this Chapter. For the purposes of this section only, person does not include a hosting platform. (b) No host may be the host for more than one home -share. 6.20.050 Hosting platform responsibilities. (a) Hosting platforms shall be responsible for collecting all applicable TOTs and remitting the same to the City. The hosting platfo rm shall be considered an agent of the 13 host for purposes of TOT collections and remittance responsibilities as set forth in Chapter 6.68 of this Code. (b) Subject to applicable laws, hosting platforms shall disclose to the City on a regular basis each home-sharing and vacation rental listing located in the City, the names of the persons responsible for each such listing, the address of each such listing, the length of stay for each such listing and the price paid for each stay. (c) Hosting platforms shall not complete any booking transaction for any residential property or unit unless it is listed on the City’s registry created under Secti on 6.20.020 subsection (b), at the time the hosting platform receives a fee for the booking transaction. (d) Hosting platforms shall not collect or receive a fee, directly or indirectly through an agent or intermediary, for facilitating or providing services ancillary to a vacation rental or unregistered home-share, including, but not limited to, insurance, concierge services, catering, retaurant restaurant bookings, tours, guide services, entertainment, cleaning, property management, or maintenance of the residential property or unit. (e) Safe Harbor. A hosting platform operating exclusively on the Internet, which operates in compliance with subsections (a), (b), (c), and (d) above, shall be presumed to be in compliance with this Chapter, except that the hosting platform remains responsible for compliance with the administrative subpoena provisions of this Chapter. (f) The provisions of this Section shall be interpreted in accordance with otherwise applicable State and Federal law(s) and will not apply if determined by the City to be in violation of, or preempted by, any such law(s). 14 6.20.080 Regulations. The City Manager or designee may promulgate regulations, which may include, but are not limited to, permit conditions, reporting requirements, inspection frequencies, enforcement procedures, additional advertising restrictions, disclosure requirements, administrative subpoena procedures or additional insurance requirements, to implement the provisions of this Chapter. No person shall fail to comply with any such regulation. 6.20.090 Fees. The City Council may establish and set amend by resolution all fees and charges as may be necessary to effectuate the purpose of this Chapter, including, but not limited to, the application fee required by Section 6.20.021. 6.20.100 Enforcement. (a) Any host violating any provision of this Chapter, or any person other than a hosting platform who facilitates or attempts to facilitate a violation of this Chapter, or a hosting platform that violates its obligations under Section 6.20.050, shall be guilty of an infraction, which shall be punishable by a fine not exceeding two hundred fifty dollars, $750, or a misdemeanor, which shall be punishable by a fine not exceeding five hundred dollars, $1,000, or by imprisonment in the County Jail for a period not exceeding six months or by both such fine and imprisonment. (b) Any person convicted of violating any provision of this Chapter in a criminal case or found to be in violation of this Chapter in a civil or administrative case brought by a law enforcement agency shall be ordered to reimburse the City and other participating law enforcement agencies their full investigative costs, pay all back TOTs, and remit all 15 illegally obtained rental revenue to the City so that it may be returned to the home -sharing visitors or used to compensate victims of illegal short-term rental activities. (c) Any host who violates any provision of this Chapter, or any person other than a hosting platform who facilitates or attempts to facilitate a violation of this Chapter, or a hosting platform that violates its obligations under Section 6.20.050, shall be subject to administrative fines and administrative penalties pursuant to Chapters 1.09 and 1.10 of this Code. (d) Any interested person may seek an injunction or other relief to prevent or remedy violations of this Chapter. The prevailing party in such an action shall be entitled to recover reasonable costs and attorney’s fees. (e) The City may issue and serve administrative subpoenas as necessary to obtain specific information regarding home-sharing and vacation rental listings located in the City, including, but not limited to, the names of the persons responsible for each such listing, the address of each such listing, the length of stay for each such listing and the price paid for each stay, to determine whether the home-sharing and vacation rental listings comply with this Chapter. Any subpoena issued pursuant to this section shall not require the production of information sooner than thirty 30 days from the date of service. A person that has been served with an administrative subpoena may seek judicial review during that thirty 30-day period. (f) The remedies provided in this Section are not exclusive, and nothing in this Section shall preclude the use or application of any other remedies, penalties or procedures established by law. 16 SECTION 2. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance , to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 3. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption, and shall apply to all home-shares, including those operating under business licenses obtained prior to the effective date of this Ordinance. APPROVED AS TO FORM: _______________________ LANE DILG City Attorney Attachment F 1 Jurisdiction App. Req. Term of Permit/ License App. Fee Business License Req. Limitation on Non-Natural Person Hosts Occupancy Limitation Group Limitation Parking Req. Insurance Req. City of Los Angeles Municipal Code, §12.22 A, subd. 32. Home- sharing application 1 year $89 Yes, unless home-sharing is conducted with a hosting platform that has an agreement with the City n/a 2 overnight guests (excluding children) per bedroom A Host may not rent all or a portion of his Primary Residence for the purposes of Home-Sharing to more than one group of guests or under more than one booking, at any given time n/a n/a City of Pismo Beach Municipal Code, Chapter 17.09 & 17.113 Short-term rental license None stated, but annual proof of primary residency required $399 Yes Owner must be a natural person 2 people per bedroom, plus 2 additional people n/a Onsite property parking required n/a City of San Francisco Administrative Code, Chapter 41A Short-term rental registry application 2 years $250 Yes n/a No express limitation, but FAQs explain that housing/building code occupancy limitations apply No express limitation, but FAQs state a limit of 5 individual short-term rental reservations n/a $500,000 or home-sharing through hosting platform that provides equal or greater coverage City of West Hollywood Municipal Code, Chapter 5.66 Home- sharing business license None stated, but staff report refers to annual renewals $100 application; $50 renewal Same as home-sharing business license Host must be a natural person Two people per bedroom, plus two additional people n/a Home- sharing visitors may not use visitor on-street $500,000 or home-sharing through hosting platform that provides equal or greater coverage Attachment F 2 Jurisdiction App. Req. Term of Permit/ License App. Fee Business License Req. Limitation on Non-Natural Person Hosts Occupancy Limitation Group Limitation Parking Req. Insurance Req. parking passes County of Santa Cruz County Code, § 13.10.690 Hosted rental permit (with a cap of a total 250 permits available) 5 years $142.50 Yes n/a 3 people per bedroom (excluding children under 8); 2 bedrooms max n/a One car per hosted bedroom that may be parked on site or in legal street parking near the home share n/a County of Ventura County Code, §§ 8109-4.6 et seq.; 8175- 5.21 et seq. Temporary rental unit application required for dwellings in certain zones 1 year $540 Yes Permits will not be issued to a home share owned by an LLC, corporation, partnership or other legal entity unless all shareholders, partners, or members are natural persons Maximum of 2 bedrooms and 5 visitors No more than one group at a time; no more than one rental agreement shall be effective for any given date. Onsite property parking required $500,000 per occurrence 1 City Council Meeting: September 10, 2019 Santa Monica, California RESOLUTION NUMBER (CCS) (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ESTABLISHING APPLICATION AND RENEWAL FEES FOR THE HOME-SHARING PROGRAM WHEREAS, a central and significant goal for the City is preservation of its housing stock and preserving the quality and character of residential neighborhoods; and WHEREAS, Santa Monica places a high value on cohesive and active residential neighborhoods and the diverse population which resides therein; and WHEREAS, the City must preserve its available housing stock and the character and charm which result, in part, from cultural, ethnic, and economic diversity of its resident population as a key factor in economic growth; and WHEREAS, Santa Monica's natural beauty, its charming residential communities, its vibrant commercial quarters and its world-class amenities have drawn visitors from around the United States and around the world; and WHEREAS, there is within the City a diverse array of short-term rentals for visitors, including, hotels, motels, bed and breakfasts, vacation rentals and home sharing, not all of which are lawful; and WHEREAS, operations of vacation rentals, where residents rent entire units to visitors and are not present during the visitors' stays, frequently disrupt the quietude and residential 2 character of the neighborhoods and adversely impact the community; and WHEREAS, home-sharing does not create the same adverse impacts as unsupervised vacation rentals when the home-shares are hosted by the owner or long-term residents who live on site and are present to introduce their guests to the City’s neighborhoods and regulate their guests’ behavior; and WHEREAS, while the City recognizes that home-sharing activities can be conducted in harmony with surrounding uses, those activities must be regulated to ensure that the home- sharing activities do not threaten or harm the public health, safety, or general welfare; and WHEREAS, on May 12, 2015, the City Council adopted Ordinance Number 2484 which added Chapter 6.20 to the Santa Monica Municipal Code and thereby preserved the City’s prohibition on vacation rentals, but authorized “home-sharing,” whereby residents host visitors in their homes for short periods of stay, for compensation, while the resident host remains present throughout the visitors’ stay; and WHEREAS, on January 24, 2017, the City Council adopted Ordinance Number 2535CCS, which amended Chapter 6.20 to clarify its application to hosting platforms; and WHEREAS, on June 27, 2017, the City Council adopted Ordinance Number 2547CCS, which further amended Chapter 6.20 to address the use of accessory dwelling units that received their building permits after March 31, 2017 as home-shares; and WHEREAS, in the time since Chapter 6.20 was first added, the City has issued over 450 business licenses authorizing home-sharing; and WHEREAS, the City is investigating approximately 30% of the licensed home-share hosts as operating vacation rental businesses under the guise of home-sharing; and 3 WHEREAS, the costs of regulating and enforcing the requirements of the home - sharing program are significant and should be borne, at least in part, by those benefittin g from their participation in the home-sharing program; and WHEREAS, the City Council is concurrently adopting an Ordinance authorizing home-sharing permit fees to contribute to covering the costs of operating the home-sharing program, which strives to strike a balance between preserving the City’s available housing stock, protecting the residential character of neighborhoods, and preventing home-shares from turning into de facto hostels and hotels, while at the same time permitting owners and long-term residents to host guests as part of a home-share; and WHEREAS, the home-sharing permit fees established by this resolution are not more than necessary to recover the costs of the services provided. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS: SECTION 1. The initial fee for obtaining a home-sharing permit shall be $100. SECTION 2. The annual fee for renewing a home-sharing permit shall be $50. SECTION 3. Commencing on July 1, 2020 and on July 1 of each fiscal year thereafter, the fees set forth above shall be incorporated in the Master User Fee Schedule and shall, unless noted otherwise, be administratively revised and increased annually by a factor equal to the net change in City salaries and benefits costs for that fiscal year. Such net change is measured by comparing the total budgeted City salary and benefit costs for the fiscal year in which the change is to become effective to the total budgeted City salary and benefit costs for the prior fiscal year. Notwithstanding the foregoing, in no event shall the annual administrative revision set forth be less than zero percent (0%). 4 SECTION 4. The fees established by this resolution shall be effective as of the same date on which the Ordinance authorizing home-sharing permit fees is effective. SECTION 5. The City Clerk shall certify to the adoption of this resolution, and thenceforth and thereafter the same shall be in full force and effect. APPROVED AS TO FORM: ________________________ Lane Dilg CITY ATTORNEY 1 Vernice Hankins From:Stacey AS <sjaconsulting@gmail.com> Sent:Monday, September 9, 2019 11:46 AM To:Council Mailbox; councilmtgitems; Ted Winterer; Councilmember Kevin McKeown; Sue Himmelrich - Western Center on Law and Poverty (suehimmelrich@suehimmelrich.net; Lane Dilg; Rick Cole; David Martin Cc:Andrew Wilder; Rahim Kanji; Wendy Trager; Danny Mayorga; Donna Rosecu; William Reed; zinajosephs; Maurice Cochee; Denise Smith; gold.eliza@yahoo.com Subject:Bungalow Home-Sharing Business All,    While I appreciate the Council looking at the issue of vacation rentals in our City, previous legislation on home‐sharing,  and current staff recommendations, do not address "medium term" rentals (rentals that are 31 days or more,)  specifically related to companies such as Bungalow (Bungalow.com) invading our residential neighborhoods.     Bungalow is a COMMERCIAL ENTERPRISE, IN THE BUSINESS OF HOME‐SHARING. Home‐sharing is not an allowed  business in an R1 zoned neighborhood. (Bungalow is not the owner of the houses it uses for its business; however, the  following would still apply, as Bungalow is a business running out of the properties.) Section 9.07 of the Santa Monica  Municipal Code states that any land uses not specifically listed in Chapter 9.51, Use Classifications, are prohibited. A  home sharing business is not a permitted use in an R1 zoned area, in accordance with the existing language of the Santa  Monica Municipal Code. Note that  the owners of 2222 Pier Avenue whom leased the property to Bungalow have never  lived in the house, not have they ever lived in Santa Monica.      Bungalow is a commercial enterprise which has raised $64 million dollars to build a business of home sharing. Its  business model is to lease homes, put up false walls to create additional private spaces, then rent out each space to an  individual for a period of more than 31 days (thus not be regulated as a vacation rental) as a "bedroom", creating  dormitory style housing in residential neighborhoods (https://www.globenewswire.com/news‐ release/2018/08/23/1555854/0/en/Bungalow‐a‐New‐Residential‐Real‐Estate‐Platform‐Launches‐and‐Raises‐64‐Million‐ to‐Build‐a‐Better‐Rental‐Experience.html).    Bungalow puts up false walls to create additional private spaces (i.e., around a dining room, or bifurcating a living room),  which it then leases out as bedrooms. Where the new model of home sharing creates a burden on a neighborhood  zoned for single family homes, Bungalow’s model takes the burden to an extreme. Among the stated purposes of  Section 9.07 is to “Preserve and protect the existing character and state of the City’s different residential neighborhoods  and the quality of life of City residents against potential deleterious impacts related to development—traffic, noise, air  quality, and the encroachment of commercial activities.”     There are currently NINE ever revolving tenants at 2222 Pier Avenue. Permanent residents, some elderly, and many of  whom have been living in Santa Monica for fifty years or more, are forced to park blocks away from their homes. We are  forced to endure the frequent “community parties” Bungalow actually advertises as part of its marketing, which often  violate noise ordinances. The alley is always littered with the trash of nine residents, whom do not have enough of a  vested interest in the property to dispose of trash properly.  Last week, the residents of 2222 Pier had a party, which did  not end until 3:00 am, and several residents ended up calling the police. The next day all of the trash/green bins of at  least six houses on the block were filled with pizza boxes.     The owners of 2222 Pier Avenue have been cited once for Code violations in the year since Bungalow has established its  home‐sharing business at the property. However, Code Enforcement has informed me that any new case must begin all  Item 7-D 09/10/19 1 of 9 Item 7-D 09/10/19 2 over again, rather than exist as a continuation of any violations. Why? Because none of the tenants interviewed for the  initial case still live at 2222 Pier Avenue ‐ everyone there is new!     Bungalow clearly has deleterious impacts on our neighborhood.  It is a commercial enterprise which is not permitted in  R1 neighborhoods.    More so, Bungalow is a new kind of unregulated real estate development. Without legislative language directed at this  new model of commercial enterprises establishing home‐sharing businesses, Bungalow will succeed in changing our  single family home, R1 zoned area into a neighborhood of home‐sharing businesses and dormitories.    Best,  Stacey Abrams‐Sherick  90405      Item 7-D 09/10/19 2 of 9 Item 7-D 09/10/19 1 Vernice Hankins From:George Preonas <gpreonas@gmail.com> Sent:Monday, September 9, 2019 2:18 PM To:councilmtgitems Cc:Bella Demery; john demery; Paula Kayton; monique debose; Richard Thaler; Salim; JOhn shelly Demery; Brenda Schwartz; Gerry Schwartz; Karen Cove; Patricia Daugherty; Katie Woods; Dan Fawcett; Stephen Cell Subject:Item 7.D. Amendments to Home Share Ordinance Dear Council Members,  As the Council knows, my neighbors and I have been greatly concerned about the conversion of the historic Zuni House  at 710 Adelaide to a de facto hotel/hostel.  This was done by out of state investors along with a “host” — none of whom  ever before lived in the home.  I fully support the proposed amendments to the ordinance as they should go a long way  to curbing the abuses we have had to deal with.   Having said that, I think that the staff recommendation still needs some tweaking to address the underlying issues.   At a  recent NOMA meeting we were informed that significant amounts of money to be made from these rentals and that  some/many “hosts” were unconcerned about paying fines, treating those as a cost of doing business.  The City should  take two additional steps to eliminate the profit motive for converting rental properties to Airbnb short term transient  rentals.    First, as our next door neighbor “Ryan” explains on his Airbnb listing, he decided to go into the Airbnb business by  leasing and renting several apartments and homes.  As I understand the business model, someone is apparently able to  lease an apartment for, say, $2,400 a month, and turn around to charge, say, $150/night on Airbnb.  As a result, he can  earn as much as $4,500 a month — netting $2,100 ‐‐a very tidy profit.   Multiply by twelve and he can net nearly $24,000  per year, all with no capital investment and (absent significant penalties) little downside risk.  And, of course, the same  incentive is there for owners of rental properties.  So long as substantial profits are available by having just short term  rentals, enforcement will always be chasing the cheaters.  To eliminate this incentive, the City should impose a limit on the number of days that any host may rent to transient,  short term “guests.”   The Los Angeles ordinance imposes a limit of 120 days.  This is a clever feature that seemingly  would take the profit out of the system.  Under this limit, that same tenant could only rent for an average of 10  nights/month and his income would be only $1,500, i.e., less than he has to pay his landlord.  The business model may  no longer make sense.  This limitation should definitely be added.  It will remove/reduce the financial incentive that are  driving the conversion of residential housing to transient housing, while preserving the ability of tenants or homeowners  to earn some income to help pay their rent or mortgage.  This limit would be fully consistent with the initial intend of  balancing the need for housing and the desire of bona fide residents to earn modest amounts.  This limit would also be  capable of enforcement, as the booking services such as Airbnb already have the information about each rental on their  computers and must track the rental to pay the applicable taxes.  Again, the Los Angeles ordinance addresses this.  Secondly, the staff recommendation is to increase the fines somewhat — but not nearly as high as the LA ordinance,  which provides for daily fines of $1,000 per day on the hosting platform and $2,000 per day on the host.  The Santa  Monica ordinance should be similarly strengthened.   Absent a downside risk of significant financial penalties, the  ordinance will continue to be flouted and enforcement efforts overwhelmed.    In addition, I note that the recommended amendments do little to increase the responsibility of the “hosting platforms.”  The LA ordinance requires a “monthly” report of all listings in the city.  These platforms know what is listed, they “vet”  the hosts and have all kinds of contact information about them, including names, addresses and the city license  Item 7-D 09/10/19 3 of 9 Item 7-D 09/10/19 2 numbers.  With the computer sophistication they already have it would be a simple matter for them to provide all the  information needed to police compliance with the ordinance.    Item 7-D 09/10/19 4 of 9 Item 7-D 09/10/19 1 Vernice Hankins From:Carlos Tejara <ct3627381@gmail.com> Sent:Monday, September 9, 2019 10:42 PM To:councilmtgitems Subject:Introduction and First Reading of an Ordinance Amending Chapter 6.20 to Strengthen Regulation of Home-sharing Re: Meeting Sept 10    Please stop wasting your time and effort trying to go after your own hard working residents.  your residents work very  hard to live and be able to afford Santa Monica.  Instead of spending time worrying about rentals, why not worry about  the criminal vagrants that don't allow my children to use Reed Park?  why not worry about the criminal vagrants that  stab people on the st, like the high school teacher???????? stop using a Trump deflect and put light some other place  tactic.   Item 7-D 09/10/19 5 of 9 Item 7-D 09/10/19 1 Vernice Hankins From:Noma Boardmember <nomaboard@gmail.com> Sent:Monday, September 9, 2019 5:25 PM To:councilmtgitems Cc:David Martin; Rick Cole; Nancy Coleman & Paul Pitkoff; Danilo & Margaret Bach Subject:9/10/19 City Council Agenda Item 7-D re Home-Share ordinance     To help prprivacy, Mprevented download from the In       Dear Council Members,    The NOMA Board concurs that the proposed ordinance goes an appropriate and necessary way in addressing the abuses of home‐ share (as evidenced by the challenge to our neighborhood posed by its practice at 710 Adelaide Place), and in preserving the  character of our residential neighborhoods, and we urge the Council's adoption of it and also the City's continuing oversight of the  practice.      Some members of the Board have, however, also expressed concern that even the proposed safeguards might not be enough to  serve the original intent of home‐share and to curb its present abuses, and we submit as well their opinions and suggestions in full  consideration of the proposed ordinance:    Supporting the ordinance, the first Board member cites the staff report:  “Although the current ordinance requires a host to comply  with the California Building and Fire Codes, including their occupancy limitations, staff recommends that the ordinance be amended  to expressly limit occupancy of any home‐share (including the host, all other residents, and all visitors) to the lesser of (a) 10  persons; (b) 1 person per 200 square feet of the dwelling unit; or (c) 2 persons (excluding minor children) per bedroom.”    And then writes:     "It’s a little complicated, but since these good amendments are needed because there has been some gaming of the system, this 10  number looks like a high number. Assuming a situation with one host, that allows nine other folks to stay if square feet and bedroom  requirements are met. (Note that a minor is under 18 years old in California.)     Assuming minor teenagers in the bedrooms, you could have, for example an adult and 8 teenagers as AirBnB guests along with a  host in a 2,000 sq ft (or more) house or apartment.      Or other combinations including a place with a bunch of small bedrooms, or no or fewer minors that lead to 10 in bigger properties  with more bedrooms. 10 seems too high. The idea behind allowing any short term rental was to help owners/renters out by allowing  them to make some extra money through short‐term share rentals while they remain in their place. But 10 maximum? Maybe  Council should consider reducing the maximum figure."    Another Board member, in support, nonetheless reminds:  "These situations (i.e., 710 Adelaide Place) are not true "home shares;  they are quasi hotels which do not belong in any of our residential neighborhoods.  The original law, intended to protect housing and  neighborhoods, envisioned a "host" whose primary residence had an extra bedroom or two to let short term to bring in some extra  money.  Apparently the requirement that the host be "present" has been abused by "hosts" who claim to be "present" at multiple  locations.  Numerous changes are required if the ordinance is to truly protect our neighborhoods for actual neighbors."    And, while approving of the "good things" in the staff report, another Board member did not notice in the recommendations "the  requirement for a renter to get owner’s approval to operate a homeshare" and suggests consideration of such a requirement.    Sincerely,  Item 7-D 09/10/19 6 of 9 Item 7-D 09/10/19 2   The NOMA Board      smnoma.org  NOMAboard@gmail.com      Item 7-D 09/10/19 7 of 9 Item 7-D 09/10/19 1 Vernice Hankins From:Donna Rosescu <donnarosescu@gmail.com> Sent:Tuesday, September 10, 2019 10:27 AM To:Stacey AS Cc:Council Mailbox; councilmtgitems; Ted Winterer; Councilmember Kevin McKeown; Sue Himmelrich - Western Center on Law and Poverty (suehimmelrich@suehimmelrich.net; Lane Dilg; Rick Cole; David Martin; Andrew Wilder; Rahim Kanji; Wendy Trager; Danny Mayorga; William Reed; zinajosephs; Maurice Cochee; Denise Smith; gold.eliza@yahoo.com Subject:Re: Bungalow Home-Sharing Business Not to mention I have seen rats in the area, which I never did before! Due to overflowing trash bins at 2222 Pier Ave. Donna Rosescu 2215 Marine St Santa Monica, 90405   On Mon, Sep 9, 2019 at 11:46 AM Stacey AS <sjaconsulting@gmail.com> wrote:  All,    While I appreciate the Council looking at the issue of vacation rentals in our City, previous legislation on home‐sharing,  and current staff recommendations, do not address "medium term" rentals (rentals that are 31 days or more,)  specifically related to companies such as Bungalow (Bungalow.com) invading our residential neighborhoods.     Bungalow is a COMMERCIAL ENTERPRISE, IN THE BUSINESS OF HOME‐SHARING. Home‐sharing is not an allowed  business in an R1 zoned neighborhood. (Bungalow is not the owner of the houses it uses for its business; however, the  following would still apply, as Bungalow is a business running out of the properties.) Section 9.07 of the Santa Monica  Municipal Code states that any land uses not specifically listed in Chapter 9.51, Use Classifications, are prohibited. A  home sharing business is not a permitted use in an R1 zoned area, in accordance with the existing language of the  Santa Monica Municipal Code. Note that  the owners of 2222 Pier Avenue whom leased the property to Bungalow have  never lived in the house, not have they ever lived in Santa Monica.      Bungalow is a commercial enterprise which has raised $64 million dollars to build a business of home sharing. Its  business model is to lease homes, put up false walls to create additional private spaces, then rent out each space to an  individual for a period of more than 31 days (thus not be regulated as a vacation rental) as a "bedroom", creating  dormitory style housing in residential neighborhoods (https://www.globenewswire.com/news‐ release/2018/08/23/1555854/0/en/Bungalow‐a‐New‐Residential‐Real‐Estate‐Platform‐Launches‐and‐Raises‐64‐ Million‐to‐Build‐a‐Better‐Rental‐Experience.html).    Bungalow puts up false walls to create additional private spaces (i.e., around a dining room, or bifurcating a living  room), which it then leases out as bedrooms. Where the new model of home sharing creates a burden on a  neighborhood zoned for single family homes, Bungalow’s model takes the burden to an extreme. Among the stated  purposes of Section 9.07 is to “Preserve and protect the existing character and state of the City’s different residential  neighborhoods and the quality of life of City residents against potential deleterious impacts related to development— traffic, noise, air quality, and the encroachment of commercial activities.”     There are currently NINE ever revolving tenants at 2222 Pier Avenue. Permanent residents, some elderly, and many of  whom have been living in Santa Monica for fifty years or more, are forced to park blocks away from their homes. We  are forced to endure the frequent “community parties” Bungalow actually advertises as part of its marketing, which  often violate noise ordinances. The alley is always littered with the trash of nine residents, whom do not have enough  Item 7-D 09/10/19 8 of 9 Item 7-D 09/10/19 2 of a vested interest in the property to dispose of trash properly.  Last week, the residents of 2222 Pier had a party,  which did not end until 3:00 am, and several residents ended up calling the police. The next day all of the trash/green  bins of at least six houses on the block were filled with pizza boxes.     The owners of 2222 Pier Avenue have been cited once for Code violations in the year since Bungalow has established  its home‐sharing business at the property. However, Code Enforcement has informed me that any new case must begin  all over again, rather than exist as a continuation of any violations. Why? Because none of the tenants interviewed for  the initial case still live at 2222 Pier Avenue ‐ everyone there is new!     Bungalow clearly has deleterious impacts on our neighborhood.  It is a commercial enterprise which is not permitted in  R1 neighborhoods.    More so, Bungalow is a new kind of unregulated real estate development. Without legislative language directed at  this new model of commercial enterprises establishing home‐sharing businesses, Bungalow will succeed in changing  our single family home, R1 zoned area into a neighborhood of home‐sharing businesses and dormitories.    Best,  Stacey Abrams‐Sherick  90405            ‐‐   Thank you,  Donna  Item 7-D 09/10/19 9 of 9 Item 7-D 09/10/19 1 Vernice Hankins From:zinajosephs@aol.com Sent:Tuesday, September 10, 2019 11:27 AM To:councilmtgitems; Gleam Davis; Greg Morena; Sue Himmelrich; Ana Maria Jara; Councilmember Kevin McKeown; Ted Winterer; Terry O’Day; Lane Dilg; David Martin; Sharon Guidry; Rick Cole Cc:zinajosephs@aol.com Subject:City Council 9/10/19 items 4B and 7D -- ongoing illegal multi-family use in R1 in Sunset Park City Council 9/10/19 items 4B and 7D Home-sharing vs. illegal ongoing multi-family use in Sunset Park R1 district Dear Council members, The City Council discussion of new housing models should include the dormitory-style housing that Bungalow.com has been doing in Sunset Park at 2222 Pier Avenue for some time. Complaints have been filed with the city since at least August 2018, and still the problem persists. 2222 Pier Avenue -- Bungalow Living just got a $64 Million Venture Capital investment....Big Business operating in our R1 neighborhood. From a nearby resident: “It's gotten really bad -- I had to call SMPD a couple of weeks ago because of a loud, disruptive party at 1 o'clock in the morning. After the party, they filled our green bin and our neighbor's recycle bin with pizza boxes, to the brim....There are frequently smaller parties that we can hear from inside our house. And they leave a ton of trash in the alley. The list goes on and on....This sub-rental of 9 individuals inside an R1 home should not be allowed to continue.” Another neighbor filed a complaint with the city in August 2018, and I followed up with a GO complaint. An email thread below with the head of Code Enforcement shows that the city apparently can do nothing to end this ongoing practice with the current city regulations, as the illegal multi-unit use of 2222 Pier Avenue in an R1 zone in the Sunset Park neighborhood is still apparently "under investigation" after all this time. Zina Josephs From: Sharon.Guidry@SMGOV.NET To: zinajosephs@aol.com 2 Cc: Efren.Galindo@SMGOV.NET Sent: 9/6/2019 2:55:31 PM Pacific Standard Time Subject: RE: Closed Request # 3897337 [6664656633383066] -- code enforcement Hi Ms. Josephs, unfortunately the case is ongoing and I am not able to provide you with specific information regarding the case at this time. In our previous communication, I hoped that I would be able to do so soon however, due to the nature of enforcement investigations, I have been unable to do so. With that, when the case is closed, we will be happy to give you an update on the case with any information that is disclosable to the public. I cannot at time give you an estimate of when that will be but I can assure you, the case is still very active. Efren Galindo, Lead Cod Enforcement Officer is assigned to this case, while he too can’t provide any specific information regarding the case, feel free to check in with him periodically as he will be able to inform you when the case reaches completion. I have added Lead Officer Galindo to this response so you have is contact information. Best, Sharon L. Guidry Code Enforcement Manager City of Santa Monica | Planning & Community Development Code Enforcement Division 1685 Main Street, Room 111 | Santa Monica, CA 90401 sharon.guidry@smgov.net 310-458-4984 ********************************************************* From: zinajosephs@aol.com <zinajosephs@aol.com> Sent: Friday, September 6, 2019 1:45 PM To: Sharon Guidry <Sharon.Guidry@SMGOV.NET> Subject: Re: Closed Request # 3897337 [6664656633383066] -- code enforcement Sharon, I don't seem to have heard from you since March 20th about 2222 Pier Avenue. Nearby residents have expressed concern about this since August 2018. More and more FOSP members are complaining. What is the current status of code enforcement? Sincerely, Zina Josephs Friends of Sunset Park ****************************************************************************** In a message dated 3/20/2019 4:05:58 PM Pacific Standard Time, Sharon.Guidry@SMGOV.NET writes: Thank you Ms. Josephs, and you are most welcome. I can certainly understand where frustration can arise when limited information can be provided while it appears the violations continues. I assure you that this case is moving through the process in accordance with established policy and the law and we will reach a conclusion using all available enforcement remedies available to us. As I mentioned previously, I expect that we will be able to share some information with you soon. Best, 3 Sharon L. Guidry Code Enforcement Manager City of Santa Monica | Planning & Community Development Code Enforcement Division 1685 Main Street, Room 111 | Santa Monica, CA 90401 sharon.guidry@smgov.net 310-458-4984 *************************************************************** From: zinajosephs@aol.com <zinajosephs@aol.com> Sent: Wednesday, March 20, 2019 3:05 PM To: Sharon Guidry <Sharon.Guidry@SMGOV.NET> Cc: zinajosephs@aol.com Subject: Re: Closed Request # 3897337 [6664656633383066] -- code enforcement Ms. Guidry, Thank you for your response. I don't recall speaking with anyone in your department about this matter. Bill Reed (see below), a longtime member of Friends of Sunset Park, doesn't understand why it's taking so long to resolve the matter. Neither do I, as Mr. Reed first emailed me about this matter on August 2, 2018. Zina Josephs President, Friends of Sunset Park ****************************************************************************** In a message dated 3/20/2019 2:54:24 PM Pacific Standard Time, Sharon.Guidry@SMGOV.NET writes: Good afternoon Ms. Josephs, thank you for offering your assistance with the enforcement on this property. I understand that you have spoken with Code Enforcement Supervisor Maurice Cochee who shared that we have an active enforcement case on this property and therefore cannot provide any specific information on the status except to say that our enforcement is active and we will continue our case until full compliance with the law. When the case is satisfactorily resolved, we will be able to share more information at that time. We hope to have information to share in the near future. Best, Sharon L. Guidry Code Enforcement Manager City of Santa Monica | Planning & Community Development Code Enforcement Division 1685 Main Street, Room 111 | Santa Monica, CA 90401 sharon.guidry@smgov.net 310-458-4984 *************************************************************** From: zinajosephs@aol.com <zinajosephs@aol.com> Sent: Saturday, March 16, 2019 6:31 PM To: Sharon Guidry <Sharon.Guidry@SMGOV.NET> Cc: billreed1@aol.com; zinajosephs@aol.com Subject: Re: Closed Request # 3897337 [6664656633383066] 4 Dear Sharon, Seven months after the initial complaint in August 2018 on the GO system, the problem below (illegal multi-unit use of 2222 Pier Avenue in an R1 zone in the Sunset Park neighborhood) has apparently not been dealt with effectively. Is there anything else residents can do to get the municipal code enforced? Zina Josephs Friends of Sunset Park ****************************************************************************** Hi Bill, Jing is out on maternity leave. I'm forwarding this to Sharon Guidry, who is the head of Code Enforcement. Zina. https://www.smgov.net/Departments/PCD/Code-Enforcement/Code-Enforcement-Division-Staff/ ****************************************************************************** In a message dated 3/16/2019 11:05:33 AM Pacific Standard Time, billreed1@aol.com writes: You told Zina Josephs on August 10, 2018 in an E-mail that the multi-unit use of 2222 Pier Ave in an R1 zone was not legal (see below). However, after filing a complaint (August 2018), and dozens of follow-ups with code enforcement, city council members, etc. by multiple residents nothing has happened. Justice is only useful if it is 'speedy'. I do not think after seven (7) months we are asking for too much for either the city of Santa Monica to stop what is happening at 2222 Pier Ave or you do not enforce your own residency codes. Sincerely, William Reed 2215 Pier Ave. Santa Monica ************************************************************* -----Original Message----- From: zinajosephs <zinajosephs@aol.com> To: billreed1 <billreed1@aol.com> Sent: Fri, Aug 10, 2018 11:17 am Subject: Fwd: Closed Request # 3897337 [6664656633383066] From:santamonica@user.govoutreach.com To: zinajosephs@aol.com Sent: 8/10/2018 8:29:43 AM Pacific Standard Time Subject: Closed Request # 3897337 [6664656633383066] ---If replying by email, enter your reply above this line--- (Please allow up to 15 minutes to update your request record when replying by email) 5 Your request # 3897337 has been closed in the Santa Monica Works system for the following reason: Hi Zina, What you are describing sounds like a multi-unit use, which is not permitted in the R1 zone. If you are concerned about the use of the property, please file a complaint with Code Enforcement so that we may investigate what is occurring at the property. Complaints may be filed by submitting a GO complaint with the specific address, or filling out a Code Enforcement complaint form found here:https://www.smgov.net/uploadedFiles/Departments/PCD/Applications-Forms/Code- Compliance-Complaint-Form.pdf You may e-mail to code.enforcement@smgov.net or drop it off at the Planning desk in City Hall. Thanks, Jing Jing Yeo, AICP Planning Manager City of Santa Monica Planning and Community Development 1685 Main Street Santa Monica, CA 90401 tel: (310) 458-8203 e-mail: jing.yeo@smgov.net | smgov.net/pcd facebook | youtube | twitter This is in reference to the request you submitted on 08/02/2018 11:50 PM Description: An R1 property in the Sunset Park neighborhood used to have a 5-bedroom house in the front and a 1- bedroom cottage in the rear. Construction began several months ago to add another bedroom to the rear cottage. It seems that as of August 1, 2018, the house and the cottage are now being leased as 9 1-bedroom units. Each unit has its own lease. Is the property owner allowed to do this in an R1 zone? 1 Vernice Hankins From:Council Mailbox Sent:Tuesday, September 10, 2019 12:03 PM To:councilmtgitems Subject:FW: Agenda Packet - Sep 10, 2019 (Tue) - City Council     From: zimtar@aol.com [mailto:zimtar@aol.com]   Sent: Friday, September 6, 2019 7:44 PM  To: Council Mailbox <Council.Mailbox@SMGOV.NET>  Subject: Fwd: Agenda Packet ‐ Sep 10, 2019 (Tue) ‐ City Council  7c and 7d look great to me. Thanks for doing this. -----Original Message----- From: City Clerk <NoReply@IQM2.com> Sent: Fri, Sep 6, 2019 4:32 pm Subject: Agenda Packet - Sep 10, 2019 (Tue) - City Council The agenda has been revised to include items 1.C., 1.D., 1.E., 3.L., 3.M., 4.B., 7.C., and 7.D. Please see the attached Agenda Packet document for the following meeting: City Council Regular Meeting Tuesday, September 10, 2019 5:30 PM 1685 Main Street - Room 213, Santa Monica, CA 90401 Download PDF Agenda Packet | View Web Agenda Packet Document Modified: 9/6/2019 4:25 PM If you no longer wish to be included in this distribution list you can remove yourself through the meeting web portal or reply to this message. 1 Vernice Hankins From:Robin Nydes <robin@nydes.com> Sent:Tuesday, September 10, 2019 12:14 PM To:councilmtgitems Subject:Sep10, Item 7.D., Re: Home-Sharing... please start a dialogue with true Resident Owners, who you are harming Dear Council,    We fully support the cities crack down on the poster child “bad guys,” the non‐resident owners who turn apartments  in to virtual hotels, thus taking housing stock off the market, as well as the new phenomenon of the virtual  hotel/hostel, such as on Adelaide Place.     However, in your attempt to whack‐a‐mole, the City is also whacking well‐meaning long term Santa Monica residents  who live in their homes most of the time but wish to rent a few weeks per year to help with expenses.   For example, at  a recent meeting I spoke to a widow in her 70’s who has a 3 bedroom older ranch style home, “the city is killing me… I used to rent my house a few weeks a year to families, then go and stay with my son in Sacramento. That would help me pay the bills as it’s so expensive to live here. I can’t set up my home where I have a separate floor to stay & do home sharing, so now I have to sell. How does that help anyone?” Thus, a number of us discussed forming a “Resident Owners Association” to engage with City Council, which as the  name implies would consist of owners who are normally resident in their homes, not the abusers you cite.  We would  like to have a voice as regulations continue to evolve which they will do over the years.   Helping to stop blatant  abuses, factoring in all considerations, the tax base, housing stock, etc. while not unduly handicapping long term  residents.    Best,    Robin Nydes    1 Vernice Hankins From:Dana Uppal <abc123ag@gmail.com> Sent:Tuesday, September 10, 2019 3:56 PM To:councilmtgitems Subject:AirBNB concerns in Santa Monica To whom it may concern,    My husband and I have been residents of Santa Monica for five and four years respectively. As apartment residents,  we've learned a great deal about the how to live in a community with flexibility and grace when needed. Lately, our  safety, comfort and patience have been pushed by neighbors breaking the city laws in regards to AirBNB rentals. We  moved into a rent controlled apartment in April of this year. From the day we moved in, we have watched strangers and  vacationers cycle through the apartment next door. They have blasted music, been active in the unit and the hallway at  all hours of the day and night, and have even tried to open our apartment door after forgetting where they are staying.  We don't even know who the tenant is. We don't know who is next door to us on any given night. They haven't been  background checked or vetted in any way. As parents of a young toddler, this has been extremely concerning, especially  when my husband has to travel for work. We've attempted to work with our leasing office but have hit wall after wall  about their hands being tied. Knowing that AirBNB is illegal in Santa Monica frustrates us further, especially since these  are rent controlled apartments. There are a LOT of people who are trying desperately trying to find affordable housing in  this city. To have a home given up for someone to make money is morally despicable. This prioritizes profit over homes  for members of our community. My husband has reached out to the city and we are hoping for some assistance in  getting this resolved. As residents and tax payers, we hope we can depend on you to enforce the laws you have set and  have been upheld by the US Court of Appeals.    In urgency,  Dana and Mohit Uppal  1 Vernice Hankins From:June Stoddard <june.stoddard@gmail.com> Sent:Tuesday, September 10, 2019 5:14 PM To:councilmtgitems Subject:Homesharing ordinance comments for 9/10/2019 Dear City Council Members,    I have lived in Santa Monica since I married in 1989. I lost my husband in 2002, raised my twins through the Santa Monica public schools where they performed in top orchestras through senior year. I raised them alone since they were 8 years old, and sent them off to Bard college where they graduated with BAs and are now 25 working and living on their own in West Hollywood.     I have been an Airbnb Superhost since you first created the Home sharing ordinance in 2015. You were very forward thinking in creating the state of the art Home sharing rules way before any other cities had agreement. Four of my friends are hosts in the area, having also lost their husbands and depend on the income they get from their Airbnbs. In a way our husbands are still caring for us.   I currently have over 600 5 star reviews earned over the past four years.    I am exactly who your home sharing laws help and protect.   I am a thoughtful host, using my nurturing, multitasking skills learned as a mother of twins to host the world. My neighbors that know I host, I have extensive rules that all guests abide by to be thoughtful of my neighbors. I consider my hosting to be a political act- I am hugging the world at a time when our government is walling it out. I educate international guests on how to get around safely, refer them to local businesses, give them maps and educate them about the area, and local laws. I can't help but mother them.    I am concerned as it appears you are now thinking of limiting the number of rooms a host can rent out due to those who abuse your home sharing laws by getting around them- setting up travel hostels in huge homes in very nice neighborhoods, and the new real estate business model called "Bungalow" which is not regulated by the home sharing laws.    Most people have 2 extra rooms in their homes after children go away to college, or leave home altogether. I have 2 extra bedrooms in my condo, and allow 2 guests per room. Both are bedrooms, and fit your criteria. It would greatly lower my income to have you limit my rooms down to 1 room. I implore you not to do this.     Sincerely,  June Stoddard  mother of Chloe and Jessica Chappe       June Stoddard   310‐721‐4121 c  june.stoddard@gmail.com    City Council September 10, 2019 AMENDMENTS TO ORDINANCE TO STRENGTHEN REGULATION OF HOME-SHARING Staff Recommendations 1.Introduce for first reading proposed amendments to Home-Sharing Ordinance 2.Pass a resolution creating and establishing re gulator y permit fee for initial and renewal home-sharing applications 2 Prior Council Action §May 2015:Ordinance 2484 o Allowed home-sharing o Clarified long-standing prohibition of vacation re ntals §Januar y 2017:Ordinance 2535 o Revised cer tain definitions o Limited obligations of hosting platforms §Ju ne 2017:Ordinance 2547 o Accessor y dwelling units permitted after March 2017 are separate dwelling units for home-sharing 3 Purpose of Home-Sharing Ordinance §Allow residents to supplement income through home-sharing §Provide home-sharing visitors with affordable accommodations §Preser ve permanent housing stock for residents §Avo id conve rting residences to de facto hotels and hostels §Maintain quality and character of residential neighborhoods 4 Enforcement Successes §Returned 334 vacation rental units to permanent re sidential market o E.g.,successful prosecution against landlord conve rting multiple apar tment units to vacation rentals §Enforcement of 235 home-sharing violations yielded $100,000 in fines last year §Collection of approx imately $2.2 million in transient occupancy taxes in last fiscal year §Ninth Circuit upheld Home-Share Ordinance against challenge by hosting platforms 5 Enforcement Challenges §Over 30% of 466 licensed home-share hosts are being inve stigated for operating illegal vacation rentals §Conve rsion of newly purchased 5-bedroom single-family re sidence to de facto 18 to 36-person hostel o Host in compliance with almost all requirements of Home- Sharing Ordinance o But host violated Building & Fire Code occupancy limitations o Other proposed and existing home-shares have a similar business model §Listings by “superhosts” adver tising home-shares for multiple residences 6 Proposed Amendments Concern: N o prohibition against “hired hosts” Solution: §Require host to be a natural person and either : o The owner or o Long-term resident who has lived in unit at least 12 months and will be living there at least 12 months after submitting home-share application §Require two forms of proof of primar y residence 7 Proposed Amendments Concern: N o prohibition on booking or renting to multiple different groups at a time Solution: §Prohibit a host from booking to more than one group at a time on any given date §Limit host to posting one listing per home-share on each hosting platform or other media outlet §Require host to include in adver tisements the limitation on group bookings 8 Proposed Amendments Concern: N o express occupanc y restriction or limitation on number of visitor vehic les Solution: §Limit occupancy (including host,all other eligible residents,and visitors) to the lesser of: o 10 persons o One person per 200 square feet of the dwelling unit o Tw o persons per bedroom rented (excluding minor children) §Limit visitor vehicles to no more than: o One vehicle per bedroom rented or o Tw o vehicles if home-share is in preferential parking zone §Require host to include in advertisements occupancy and visitor parking limitations 9 Proposed Amendments Concerns: Clarify requirements that host lives on site and that eac h host may only operate one home-share Solution: §Clarify restriction on a person acting as a host for more than one home-share §Clarify that the home-share must occur in primar y re sidence of host §Clarify that the host must live on site of home-share §Clarify requirement that host must include in adver tisements that host lives on site and will be present throughout stay §Add definitions of “primar y residence” and “lives on site” to Ordinance 10 Proposed Amendments Concern: N o requirement that home-shar ing permit application be renewed or updated Solution: §Establish a home-sharing permit process §Require host to annually renew home-sharing permit as we ll as business license §Require host to amend home-sharing permit application within 30 days of any material change §Establish by resolution a regulator y permit fee: o $100 for initial application o $50 for annual renewal 11 Proposed Amendments Concern: N o insurance requirement Solution: §Require host to have insurance by either : o Maintaining liability insurance to cover home-sharing with minimum limits of $500,000 or o Conducting each home-sharing transaction on hosting platform that offers equal or greater coverage §Require host to provide proof of insurance with home-sharing application and renewal 12 Proposed Amendments Concerns: N o express requirement of basic health and safety fe atures and no express reference to noise restr ictions Solution: §Require host to ensure that basic health and safety feature like fire extinguishers,smoke detectors,and carbon monoxide detectors are in home-share §Expressly require host to comply with noise limitations in SMMC Chapter 4.12 13 Other Proposed Amendments §Increase the maximum fines for infractions and misdemeanors: o $750 for infractions o $1,000 for misdemeanors §Note: I ncrease in administrative penalties will be coming to Council on September 24 14 Other Considerations Not in Proposed Amendments §Require long-term resident hosts to provide proof that owner/landlord consents to home-share §Prohibit home-sharing in re nt-controlled units §Require 6-month long-term residency requirement instead of 12 months §Require hosts to distribute guest code of conduct §Increase permit fee to be closer to actual costs incurred by staff in reviewing permit applications §Revo cation of permits and renewals after code violations (to be addressed in admin regulations) 15 REFERENCE: Resolution No. 11198 (CCS)