Santa Monica, California, a prime coastal city known for its appeal to tourists and its tight housing market, enacted stringent regulations on short-term rentals STRs in A study published in by Cayrua Chaves Fonseca analyzed the effects of this regulation, offering important insights into the complex relationship between STRs, rents, and property values.
It prohibits the rental of entire homes for less than 30 days, allowing only homeowners or tenants who reside in the property full-time to offer a room for short-term rental.
The ordinance also imposes stringent licensing requirements and hefty fines for noncompliance. This regulation was implemented in response to fears that STRs were:. By targeting STRs, city leaders hoped to curb these trends and ensure that housing was prioritized for long-term residents. Here are the core findings:. The lack of a measurable impact on rents and housing prices highlights the complexity of urban housing markets:.
The Broader Implications for Other Cities. It demonstrates that while such ordinances can drastically reduce STR activity, their impact on rents and housing prices may be less dramatic than expected. For cities considering similar measures, the following takeaways are key:.
While the regulation achieved its goal of curbing STR activity, its limited impact on rents and housing prices highlights the need for multifaceted solutions to address housing affordability.
