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The Dirt On Airbnb

Posted by John Hathorn on July 18, 2018
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Another round of litigation between the Santa Monica and the AirBnB/HomeAway legal team ended badly for the short-term rental online platform.

AirBnb & HomeAway recently attempted to challenge the March ruling that sided with Santa Monica. The lawsuit was an attempt to remove the city’s ability to penalize the online platforms for aiding & facilitating locally unlawful business transactions violating the Home Sharing Ordinance.

The ordinance required that hosts obtain a business license and register with the city. Also, the hosts must be present in the home at the time tenants are lodging there, and that a guest house may not solely be used for the purpose of short term rentals. Initially, it was only legally possible to enforce this with the landlords directly. This proved difficult, and after litigation, Santa Monica gained the ability to fine the platforms on which hosts, and lodgers connect.

AirBnB & HomeAway tried to use the first amendment and the Coastal Act to render the Ordinance unlawful. However, they failed to prove that the Ordinance conflicts with the Coastal Act and the U.S. District Court held that the Ordinance regulates conduct and not speech. Therefore, the Ordinance does not conflict with the 1st amendment. Chief Deputy City Attorney Yibin Shen also said “The Ordinance is a constitutional exercise of the City’s legislative authority to protect the health, safety and welfare of residential neighborhoods.”

It’s easy to see both sides of this.

On one hand, these short-term rents are lucrative for owners. They can generate truly significant rental income. Also, for Landlords looking to simply fill a gap between longer-term Tenants, it can help stabilize loss of income due to vacancy periods.

The negative results of these short-term rentals can affect neighbors and neighborhood integrity. Noise disturbances, the constant rotation of new faces and security/ safety concerns are the most common complaints. Plus, in the midst of a housing crisis, having another industry interfere with the natural economics of rental inventory and prices is a sure-fire combo to elicit resistance.

One thing is for sure, this isn’t the last we’ll hear of this feud.

In real estate news…

Two new listings-

339 & 335 16th Street- We listed for sale 2 adjacent properties being sold together for $7,500,000. I can count on one hand the number of times in Pence Hathorn Silver’s 30+ years of dominating the north of Montana Avenue marketplace adjacent lots have been offered! Together these lots total nearly 15,000 square feet. The combined dimensions are 100’X150’. Both lots have little houses on them currently. One is leased at $7,500 per month and the other is vacant. This would make a great compound for the right owner-user.

424 14th Street- I sold this home years ago when it was newly constructed. Now listed for $6,425,000. 6 bedrooms, 6.5 bath, approximately 6,200 sqft. Built in 2004 in as size that can’t be replicated under today’s more restrictive codes. Enormous square footage on a 7,500 lot due to the large basement entertaining level. The backyard has a pool and nice hardscape. Last sold in 2008 for $3,960,000.

Two closed sales:

745 18th Street- Originally listed at $3,649,000 and later reduced to $3,499,000 has just closed at $3,250,000. 4 bedrooms, 2.5 baths, approximately 2,600 sqft. Cute Spanish/Traditional with a converted garage and backyard that has been turned into a sports court.

469 20th Street- Sold for $4,970,000. Listed at $4,798,000.


We have a nice 3,400 square foot, 4 bedroom with a guest house coming to market soon.

Call me if you would like a sneak preview or if you would like an opinion of value on your home.


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