Homes as Hotels

Is getting rid of the cap on short-term rentals a good way for the city to pad the coffer?

Santa Fe, we’ve got a problem: Our high desert sunshine and blue skies are too popular, our adobe skyline still a marvel, our artist colony on Canyon Road and Ski Santa Fe too irresistible.

Even as officials try to lure more tourists, they're wrestling with how to capture the maximum tax revenue. The problem, as some see it, is that Internet-based home rentals are providing lodging without giving the city a cut. And recent calculations indicate that if they were, the city could be collecting another $2.3 million each year.

But it's more than just a collections issue. Under the city's current ordinance, only 350 licenses can be issued to those who want to get into the short-term rental biz, leaving an estimated additional 500 or so properties used for that purpose without a license—most of them advertising availability through websites like AirBnB, VRBO and Home Away.

Now the city's land use staff, led by its department director, Lisa Martinez, and Randy Randall, the director of the city's tourism department, are set to take the pulse of city councilors on the topic. Back in September, at the urging of Councilors Peter Ives and Joseph Maestas, councilors passed a resolution that ordered staff to study various options and make recommendations, and the result of that is a agenda item on the City Council meeting Wednesday, Jan. 13.

One of them: Lift the cap and make the sky the limit for any number of Santa Feans who are interested in turning their houses into de facto hotel rooms, provided they pay the city the $325 for a license to operate and the $100 for the application fee.

The windfall in millions of recouped revenues could, at the very least, help pay down the balance of the $41 million that the city owes on the the Santa Fe Community Convention Center, with its 33,000 square feet of space.

"We could use some of that money," Randall tells SFR this week.

Whether the recommendations eventually take the form of a rule change depends on how many, if any, councilors are convinced that the toll on neighborhoods is worth the cash.

Randall made the same point on Jan. 7 at a daytime public meeting where more than 200 people crowded into the Lamy Room in the Convention Center to deliver their feedback on the saga.

Emotions ran high and were about eclectic as the amount of lodging you'd find on the Internet right now if you went looking.

There was confusion over who would have to apply for a license. There was anger among residents who don't want any more congestion or noise in their neighborhood, which served as the catalyst for the current ordinance eight years ago.

And there was frustration, particularly among those who are operating under the city radar and whose days of making a buck off their sweat equity would appear to be limited, or at least under scrutiny, unless they kick back $7 on every $100 that they charge their customers.

The idea, Randall says, is bring all violators into the fold and make sure they ante up their share, which is what hotels and motels and bed and breakfasts do every quarter when they remit their lodger's taxes to the city.

Current rules say license holders may only rent homes 17 times per year and can entertain no back-to-back renters in a given week. But a draft ordinance change from staff that's part of the packet for councilors to consider calls for erasing that provision. The proposal does, however, attempt to beef up the enforcement of city rules on inspections and taxes, adding a fine of $500 for operators who fail to comply.

"Times are changing," Randall says. "It's not just occurring in Santa Fe. It's an international phenomenon, and and it's time to get on board and make some changes to the ordinance."

On angry man, who operates a short-term rental out of his house on his own terms, rose to his feet in anger, and addressed Randall.

"What do I get out of all this?" he says.

The answer: He gets to legally rent out his house on a short-term basis, something that he's not supposed to be doing at the moment.

Another resident, AJ Kleinman, who occasionally rents his four-bedroom house, was hoping that the city would carve out a niche for him and others like him, seeing as he only does so during certain holidays, and at the most at two weeks at a time. Because the children have got to get back to school. And he'd never rent to irresponsible renters.

"It's my house, after all," he says.

On the other side of the coin, people who live in neighborhoods with multiple short-termers say the city hasn't been honest about enforcement efforts and outright ignored their cries after the rules went into place. The report on the Council agenda indicates complaints "were resolved without having to issue any violations."

Councilor Patti Bushee, who was on hand to talk to some of the residents, notes that theshort-term rental ordinance, which started out as a land-use issue, has now moved into the circle of tourism. And she's at a loss as to exactly why, or how, or the reason for the sudden mandate to make money off the matter. Yet Bushee is leaving her council seat in March and might not have a chance to consider whatever proposals come forward.

The city of San Francisco, with similar struggles on a larger scale, instead of opening up the number of rentals, tried to place restrictions on short-term rentals, but the people voted it down by 55 percent in last November's election.

Santa Fe isn't San Francisco, and this vote might not even be going to the City Council, unless councilors are persuaded by the report's results to go ahead and draft a proposed ordinance.

As for Randall, he's already struck up a dialogue with AirBnB, which operates from San Francisco. It took him weeks to finally get them on the phone after weeks of emailing. And right now airbnb, he reports, is willing to collect the lodger's taxes from the short-term rental operators and remit them to the city.

"But first we need to get to the bottom of what the ordinance will say," says Randall.

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