by Kevin Cody
Hermosa Beach had 247 short term vacation rentals (STVRs) in July, averaging $329 a night, according to the STVR analysis site AirDNA. Short term vacation rentals, of under 30 days, are illegal in Hermosa Beach, except in some commercial districts, where Hermosa has issued 14 STVR permits.
City fines for STVRs in residential neighborhoods run as high as $15,000 per violation. But enforcement of the city’s ban on STVRs in residential neighborhoods has been difficult because the websites advertising STVRs rarely list street addresses, Hermosa Beach Development Director Carrie Tai told the Hermosa Beach Planning Commission at its Tuesday, August 15 meeting.
“We need live observation (of illegal renting) to issue a citation,” Tai said.
To address the enforcement issue, Tai said, the city is contracting with Granicus Host Compliance.
The company’s website says it identifies the addresses of unregistered STVRs by using “big data and artificial intelligence” to monitor over 60 STVR online sites, among them airbnb and Vrbo. “Every address is quality checked by an analyst to ensure that address identification is accurate,” the Granicus site states.
The site says it also estimates STVR occupancy rates, and rental revenue, and provides a 24/7 hotline for neighbors to report complaints about STVRs.
Granicus founder Ulrik Binzer writes on his website that websites listing STVRs “have refused to share any property specific data with the local authorities and have even gone as far as suing cities that have been asking for such detailed data.”
Tai’s discussion of the stepped up STVR enforcement followed the Planning Commission’s unanimous vote at the August 15 meeting to recommend to the council that it extend by two years the city’s ban on STVRs in residential districts, and to continue to allow them in commercial districts.
STVRs in commercial districts pay the city’s 14 percent Transient Occupancy Tax, and a $1,589 annual permit fee.
In urging support of the city’s STVR policy, resident Scott Hayes observed in an email to the Planning Commission, STVRs unfairly compete against local hotels, and “take dozens of properties out of circulation for the residents of Hermosa Beach. This increases the demand for long term rental units, and increases rents for our residents.”
Planning Commission Peter Hoffman made a similar observation about the impact of STVRs on housing availability.
“People act like illegal STVRs are something we can look the other way on. But these are basically operating as commercial properties, and are contributing to housing being as expensive as it is,” Hoffman said.
STVR ban has its cost
According to AirDNA, in July, Hermosa Beach’s 247 STVRs had an occupancy rate of 77 percent, and averaged $7,000 a month, or $20.7 million annually. If subject to the city’s 14 percent transient occupancy tax (TOT), STVRs could generate approximately $3 million annually, an amount equal to what the city hoped to receive from the sales tax increase voters rejected last November.
Hermosa has 55 properties, with approximately 150 non-conforming residential units in its commercial districts, former Community Development Director Ken Robertson told the City Council in 2019, when the council legalized STVRs in commercial districts.
The Granicus Host Compliance website states, “The potential increase in (city) revenue can be five to twenty times the annual cost of the software. As the industry grows and more hosts register and they pay their fair share of taxes, permits, and fees, they will continue to increase, bringing critical dollars to your community.”
Manhattan Beach has 109 licensed short term vacation rentals, and has budgeted $325,000 in anticipated revenues for 2023-2024, according to city finance director Steve Charelian. Like Hermosa, Manhattan Beach uses Granicus Host Compliance. STVRs are legal in Manhattan in its coastal zone (1,000 yards inland from the mean high tide).
Redondo Beach had 341 STVRs, averaging $285 a night in July, according to AirDNA. STVRs are illegal in Redondo Beach. ER
