Overview of the Home-Sharing Ordinance

On May 12th, 2015 the Santa Monica City Council adopted the "Home-Sharing Ordinance," adding Chapter 6.20 to the Santa Monica Municipal Code clarifying prohibitions against short-term vacation rentals and imposing regulations on home-sharing. This law became effective on June 12th, 2015, and was subsequently amended by ordinances adopted on January 24, 2017, June 27, 2017, and September 24, 2019. The Home-Sharing Ordinance allows eligible residents (owners and long-term residents) to apply for a home-sharing permit and business license so that they can home-share their primary residence. In addition, the September 24, 2019 amendments to the ordinance contain listing and advertising requirements, restrictions on the number of group bookings, occupancy and visitor vehicle limitations, and other prohibitions. These amendments take effect on October 24, 2019 and apply to all home-shares, including those operating under business licenses obtained prior to the effective date of the ordinance.

 

The Home-Sharing Ordinance provides for regulations of two types of Short-Term Rentals:

“Home-Sharing” – The law authorizes home-sharing, which is the rental of 30 consecutive days or less of one or more bedrooms in the home that is the primary residence of the host while the host lives on-site in the home throughout the visitor’s stay.

"Vacation Rental” – The law continues the City’s longstanding prohibition against Vacation Rentals. A vacation rental is the rental of 30 consecutive days or less of a home, in whole or in part, for exclusive transient use. The visitor enjoys the exclusive private use of the unit.

  

Home-Share Application and Regulations

 

Frequently Asked Questions

Why did the Council adopt the Home-Sharing Law?

Does the law apply in all zoning districts?

I am the property owner.  Why can’t I rent my own property for a short period while I’m away?

I am a tenant.  May I operate a home-share in my unit?

I own a duplex/triplex and reside in one of the units.  May I home-share one of the vacant units if I am present in my unit during my guest’s stay?

Do I need my HOA or landlord’s permission to operate a home-share?

May I operate a home-share in a rent-controlled unit?

May I rent a unit without my presence for longer than 30 days?

Is there a maximum number of days I can operate a home-share?

May I home-share a guest house?

Is there a limit on how many visitors I can host in my home-share? 

As part of a home-share can I rent out several rooms separately?

Do I need both a Permit and a Business License?  What is the cost?

How much will I pay in Business License Tax?

Am I eligible for a Small Business Exemption?

What are Transient Occupancy Taxes?

What are the penalties for violating the Home-sharing Law?

 

 

Home-sharing FAQs (revised October 2019)

Why did City Council adopt the home-sharing Law?

In response to the increase in vacation rentals due to the popularity of Airbnb and other online platforms, Council wanted to clarify the long-standing prohibition of vacation rentals in Santa Monica.  At the same time, they wanted individuals to be able to rent a spare room in their homes, so the law was liberalized to include home-sharing.


Does the law apply in all zoning districts?

Yes, the law applies citywide to all residential units in the City, including single family homes, condominiums and apartments.


I am the property owner.  Why can’t I rent my own property for a short period while I’m away?

Vacation rentals can have detrimental impacts on the character of residential neighborhoods by turning homes into de facto hostels or hotels, by leading to excessive noise and safety concerns, and by monopolizing available parking.  The City has a responsibility to mitigate these impacts.  


I am a tenant.  May I operate a home-share in my unit?

Yes, so long as you resided in the unit for the prior 12 months and intend to reside in the unit for the 12 months following the date of your home-sharing permit application.  The home-sharing law requires a host to be a natural person, not a company, and to be either the owner of the property or a long-term resident.  


I own a duplex/triplex and reside in one of the units.  May I home-share one of the vacant units if I am present in my unit during my guest’s stay?

No.  You may only home-share a portion of the dwelling unit in which you reside.


Do I need my HOA or landlord’s permission to operate a home-share?

The Home-Sharing Ordinance itself does not independently require permission from your HOA or landlord.  But the Home-Sharing Ordinance also does not override CC&Rs or rental agreements that require permission before authorizing home-sharing.  You will need to check your CC&Rs or rental agreement to see whether they permit home-sharing and, if so, what conditions if any they impose.


May I operate a home-share in a rent-controlled unit?

Yes, provided that your rental income does not exceed the Maximum Allowable Rent. 


May I rent a unit without my presence for longer than 30 days?

You may rent the unit for 31 days or more to persons who do not live elsewhere and who intend to use the unit as their permanent residence.  A Residential Rental business license is required.  Transient Occupancy Tax is not applicable.  Santa Monica is in the midst of reconsidering its approach to medium term rentals in excess of 30 days, so you should keep up to date on any restrictions on such rentals that may be imposed.


Is there a maximum number of days I can operate a home-share?

No.


May I home-share a guest house?

It depends. Any guest house that was permitted before March 31, 2017 and that is on a parcel that is classified as a single-family parcel by the L.A. County Office of the Assessor can be used for home-sharing so long as the host continues to reside in either the main house or guest house during the home-share. The parcel may not be classified as multi-family. Additionally, the guest house may not be a "Rent Control Bootleg Unit" as defined in section 9.04.18.075 of the Santa Monica Municipal Code.

If a guest house was permitted after March 31, 2017, the guest house is eligible for home-sharing only if the host resides in the guest house during the home-share.  In other words, the host may not reside in the main house and use the guest house for home-sharing, or vice-versa.  


Is there a limit on how many visitors I can host in my home-share? 

Yes, the home-sharing law has an occupancy limit.  The limit including the host, anyone else who lives at the home, and the visitors is the lesser of 10 total people, 1 person per 200 square feet of the home, or 2 adults per bedroom.  


As part of a home-share can I rent out several rooms separately?

You may book only two groups of visitors at any time and you are limited to two listings for the home-share on a hosting platform.  So, for example, if you have a four-bedroom house, you could have two listings and book two groups of visitors at a time.  


Do I need both a Permit and a Business License?  What is the cost?

Yes, you must apply for and obtain both a Home-sharing Permit and Home-Sharing Business License.  There is a single application that must be completed to obtain both.  There is a State fee of $4 for the business license, an application fee of $100 for the initial home-sharing permit, and a $50 annual fee to renew the home-sharing permit.  Make checks payable to City of Santa Monica.


How much will I pay in Business License Tax?

Home-Sharing activities are classified as services and assigned Tax Rate Group III. As such, the annual tax is $75 on the first $60,000 of gross receipts. Additionally, for every $1,000 above $60,000 a tax of 0.3% is assessed. For example, if you make $75,000 in home-share rent (without any deductions for expenses) in a calendar year, the Business License tax due would be:

$75.00 Tax on the first $60,000 of Gross Receipts, plus

$45.00 Tax on the remaining $15,000 of Gross Receipts

$120.00 Total Tax Due on $75,000 of Gross Receipts


Note: Business License taxes are not Income Taxes. Gross Receipts are the total amount of receipts collected from rentals. Unlike with an Income Tax, no deductions may be taken for expenses.


Am I eligible for a Small Business Exemption?

A host who makes $40,000 or less annually in gross receipts may apply for a Small Business Exemption (SMMC 6.04.025). A host must pay their tax on time to qualify for the exemption; otherwise the minimum tax of $75 and the applicable penalties will be due. Please check with the Business License office for more information at (310) 458-8745.


What are Transient Occupancy Taxes?

The City levies a 14% tax on the total amount paid for rental of a Home-Share.  Federal, State or City of Santa Monica employees on official business are exempt from this tax. The tax is paid by the guest and collected and remitted to the City by the host, or in some cases by the hosting platform if one is used.  If you use a hosting platform, please check with the hosting platform to see if it collects and remits these taxes on your behalf. Payment of Transient Occupancy Tax is due on a monthly basis.  For more information, please contact Treasury Operations at (310) 458-8741.

 

What are the penalties for violating the Home-sharing Law?

The administrative fine amounts for advertising, facilitating or operating a vacation rental start at $1000 per day per violation, and increase if the violation continues.  There may be other associated penalties and costs in addition to administrative fines, including the cost of investigation.  Failure to comply with administrative citations may lead to referral to the City Attorney’s Office for prosecution or other legal options.  

 

Contact Information

General Questions
Code Enforcement Division
(310) 458-4984
code.enforcement@smgov.net

Business License Application Questions
Finance - Business License Division
(310) 458-8745
business.license@smgov.net

Transient Occupancy Tax Questions
Finance - Treasury Division
(310) 458-8741 
treasury@smgov.net

Rent Control Questions
Rent Control Board
(310) 458-8751
rentcontrol@smgov.net

 

Report Illegal Vacation Rentals

Code Enforcement

Online: www.smgov.net/sm_go.aspx
Phone: (310) 458-4984
Email: code.enforcement@smgov.net
Mail: 1685 Main Street, Room 111
Santa Monica, CA 90401

Complaints can be made anonymously. Please include the address and unit number of the location. If you wish to speak with a Code Enforcement Officer, you will need to provide your name and contact information.