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Journal North: Home | Sports | Opinion | Obits | Entertainment
Sunday, February 15, 2009
Short-Term Rental Fees Should Fund Enforcement
By Karen Peterson
Of the Journal
A state District Court judge recently upheld Santa Fe's law governing short-term or vacation rentals. But she also said the city has no business charging $1,000 for a short-term rental permit when it isn't spending the proceeds on enforcing the ordinance.
The ruling was well received by both parties — city officials were pleased because it upheld their contention that the law regulating vacation rentals was valid. Short-term rental landlords were gratified that the court questioned the fee, which they believe is exorbitant.
The question then arose: What would happen to the fees the city had already collected for permits? Would some of it be given back to landlords? Their attorney certainly hoped so. A better idea might be to step up enforcement efforts — and you have to wonder why the city hasn't already done so, since in the age of the Internet, it's relatively easy.
In the latest city lottery for additional vacation rental permits, only about 20 people applied for 45 still-available permits. That suggests that the 350-permit ceiling the new ordinance placed on vacation rentals city-wide is more than adequate to meet demand — or that there's no incentive to pay the fee and go through the bureaucratic rigamarole of getting one of the permits, since the law is unlikely to be enforced.
Before Christmas, the last time the Journal requested the information, the city had taken action on 11 complaints about short-term rentals. Some have been resolved, including a couple of instances where there was found to be no violation of the law; several others are proceeding to court.
But one cruise through vrbo.com (the Vacation Rental By Owner Web site) yields almost 600 such listings for Santa Fe, or almost 300 more than the 305 permits the city has issued so far. And vrbo.com is only one of the myriad sites offering vacation rental listings.
Admittedly, some of the listings on vrbo.com appear to be duplicates. And others are in the county, outside the city limits, where there aren't any restrictions on such rentals. Still, with several hundred surplus listings to choose from, it should be easy for city enforcers to locate more than a few scofflaws. I did so myself in a couple of hours by calling just a couple of dozen of the first 60 or so listings on the vrbo.com Web site.
Many owners (or property managers) did have permits and happily disclosed that fact when asked directly. In all cases, the addresses matched the list of permitted rentals from the city. Others noted that they were exempt from the permit requirement, even though their property was inside the city limits. They explained that large swathes of the historic and downtown areas that you might think of as residential — including the neighborhood adjacent to Carlos Gilbert Elementary and the immediate neighbors of The Lodge, at the edge of Casa Solana — are not covered by the vacation rental ordinance because they're zoned for commercial development.
But many others — and keep in mind this was out of just the first 60 listings on the vrbo.com Web site — clearly didn't have permits. Most claimed they would rent only for 30 days minimum, although they made it very clear that customers wouldn't be expected to stay that long. (The city defines a short-term rental as one that's rented for fewer than 30 days.) "Normally, we do weeklong rentals," said one manager of such a property.
Contrary to what some city councilors who opposed the short-term rental law have said, these properties are all over the city. One manager, for example, said she represented some 30 homeowners, many of whom had property in the Park Plazas neighborhood on the city's south side. She said these homes were attractive because short-term renters "didn't have to pay downtown prices."
They still have to pay plenty. A permitted house near in the Las Acequias neighborhood off Airport Road was listed on the Web site as renting for $130 a night or $2,500 a month.
One of the owners who claimed to rent by the month only was charging between $3,000 and $4,500, depending on the time of year. Another house off Ridgetop Road was listed at $2,750 a week on the Web site, despite the owner's protestations that she could only rent it for a 30-day minimum. An unpermitted house around the corner from my own is listed at $400 a night, with a three-night minimum, and listed the longer-term rental fee as "negotiable."
That landlord, a Denver Realtor who happened to be in Santa Fe when I called, said she didn't have a permit because she didn't think the city's vacation rental law was legal (despite the judge's ruling, with which she was familiar), and proceeded to characterize the politics of both the city and the state as "just like Mexico." (Oddly, she also said she was in town to talk to a builder and planned to move her family here full-time. ¡Bienvenidos!)
Compared to the going rates, the city's $1,000 permit fee amounts to chump change to most people in the vacation rental business. Moreover, the goal of the new law was to protect residential neighborhoods from further erosion by commercial uses, including short-term rentals. If that's not happening — and it doesn't seem to be — then it's a city-wide problem, affecting neighborhoods of all socio-economic descriptions. Rather than reduce the fee, the city should be prepared to spend it — by stepping up enforcement efforts.
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