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Officials take aim at short-term rental laws

SANTA FE, N.M. — Battle lines were drawn Thursday when Santa Fe city government officials presented proposed changes to the ordinance governing short-term rentals that are intended to deal with the booming expansion of vacation rental websites like Airbnb.

Some residents and neighborhood advocates objected to the idea of opening up Santa Fe to an unlimited number of short-term rentals, as city staffers have recommended, arguing that turning houses into vacation lodging is destroying some residential areas.

“This is pulling the fabric out of Santa Fe,” said Dena Aquilina, who lives in the South Capital neighborhood near downtown. She said it was “tiresome to feel like you’re living in a motel parking lot.”

Others said they are being “run out” of their neighborhoods. “This is open season,” said one man of lifting all limits on short-term rentals. “Basically, what you’re saying is, if you live downtown, you don’t need to be there.”

Randy Randall, head of the city’s tourism bureau, defended lifting the 350-permit limit for rentals of less than 30 days and also ditching an existing rule that limits such rentals to 17 times a year per permitted host.

All sides agree the rules established in 2008 are now widely ignored, with hundreds of online listings without city permits or paying city taxes. “The horse is out of the barn,” Randall said. He said Santa Fe can either let short-term rentals expand without controls “or we can try to get our hands around it.” The situation, he said, “is basically out of control right now.”

“We can’t put our head in the sand and pretend it’s going to go away,” Randall said.

Neighborhood advocates want a broader discussion about the impact of short-term rentals. Richard Ellenberg of the Canyon Neighborhood Association said the political question before city leaders is whether more vacation rentals “is good for the city or not.”

Randall and other staffers have recommended following the lead of other tourist-heavy cities that have no limit on the number of short-term rental licenses, but require all such rentals to be registered and licensed.

All rentals would also be subject to the city’s 7 percent lodgers’ tax – a recent consultant’s study said Santa Fe is losing out on as much as $2.1 million in lodgers’ taxes from unregistered vacation rentals – and there also would be a beefed-up penalty structure and two city employees dedicated to enforcement, paid for with the expected increase in permit fees.

Randall and other city staffers said the plan, which is expected to go before the City Council, is intended to “level the playing field” among lodgers and rental hosts. Randall said all of them benefit from the promotion and advertising of Santa Fe paid for with lodgers’ tax revenues, but many aren’t collecting the taxes.

There was also push-back Thursday from people who manage vacation rentals or operate their own. One said vacation rentals businesses are already allowed under zoning in the downtown business district and get businesses licenses, and questioned why another layer of permits and fees was necessary. Another called the proposal a “double whammy” for such operations.

One man said his family only rents out their house a couple of times a year when they’re gone. He said he hoped the city would make “a space for that.” The proposal calls for a $325 annual permit fee and a $100 application fee. An Airbnb host questioned what he would get back for paying city fees and taxes. Randall said hosts can have a link on the city’s tourism site and reiterated that all lodgers benefit from city-financed promotion of Santa Fe. “Getting the word out is causing people to come to Santa Fe,” he said.

Former City Councilor Karen Heldmeyer said vacation rentals are driving up housing costs for residents as “houses are bought up for short-term rentals.”

City land-use planner Noah Burke noted that city has had only 93 complaints about short-term rentals since 2008, data that don’t appear show a high impact on neighborhoods. Part of enforcement of the rules, he said, “lies on the neighborhood.”

The city has been working on an agreement with Airbnb. Randall said the company is willing to collect lodgers’ taxes and remit them to the city for permitted hosts. But Airbnb will also allow non-permitted rentals on its site. It’s not Airbnb’s job to enforce city law, said Randall.

Some critics said the proposed changes are about “dollar signs,” more money for city coffers. Randall insisted that’s not the only motive, and keeping track of rentals and where they are is also important. The proposals got the support of Chamber of Commerce CEO Simon Brackley. “This ordinance is an attempt to keep up with new technology,” he said.

Randall said the debate stems from Santa Fe’s popularity. “If you move to Española, you won’t have a problem with short-term rentals,” he said.