Business & Economy

Business prepares for hit after Santa Monica passes short-term rental ban

The Airbnb app is displayed on a smartphone on April 21, 2014 in San Anselmo, California.
The Airbnb app is displayed on a smartphone on April 21, 2014 in San Anselmo, California.
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When you walk into an Airbnb rental, the place is usually tidy. Fresh sheets and new toiletries grace the bathroom and bedroom. Chances are, your host paid a company to do that work. 

Hostwise, one local business offering these types of housekeeping services to short-term rentals,  services about 300 properties in the L.A. area — half of them in Santa Monica. Co-founder Ryan Anderson said clients include homeowners and professional management companies. 

But last week, Santa Monica passed new regulations to ban about 80 percent of the city's short-term rentals. The city hopes to add approximately 1,400 units to the long-term rental market through a new enforcement program

"It's particularly important that we focus our enforcement on those folks who basically have apartment buildings and are turning them into hotels," said council member Sue Himmelrich at a recent city council meeting. 

The approved ordinance prohibits property owners and residents from renting their places unless they stay in the unit with their guests.

Anderson said these new regulations are bad for his business. He’s already laid off a couple of housekeepers.

“For the City Council to go and say, 'we're not going to allow this anymore' — it seemed rather short-sided, especially given how much of their revenue base is driven by tourism," he said. 

If these regulations are passed in L.A., Anderson said, "honestly, it could probably put our business out of business." That's why he's looking outside of the city to service vacation spots like Palm Springs, where Airbnb is legal. 

Santa Monica's ban goes into effect mid-June. The city said it plans to educate those who aren’t in compliance before issuing citations.