Effective Models for STR Ordinances

Cities across the U.S. have passed STR Ordinances that prioritize a stable supply of housing over the interests of speculative investors who prefer to convert existing homes into full-time lodging businesses. The most effective and consistent requirement for an STR permit is:

Proof of Ownership and Proof of Primary Residence

By applying this requirement to STR permit applicants, all short-term rentals are owner-occupied. Owner-occupied short-term rentals provide an opportunity for the homeowner to “host” guests for periods of less than 30 days in their guest rooms and guest houses. They may also choose to offer an “unhosted” stay when they are away from their home. These arrangements create a “stay with a local” experience for visitors and an opportunity for the homeowner to supplement their income.

Since the homeowner is most often present on the property, they are able to monitor parking, noise and garbage removal - issues that often result in nuisance complaints at non-owner occupied short-term rentals. Depending on the amenities and design of the home, visitors may enjoy their privacy while having access to kitchen and laundry facilities.

By requiring proof of ownership and proof of primary residence, STR permits are only available to local property owners who also reside in the home for most of the calendar year - typically 9 months. These are local citizens who are benefiting from this unique business opportunity. Someone with a long-term lease would not qualify for a short-term rental permit as they are not the homeowner.

Density Limitation

A serious consideration for preserving the character of neighborhoods is controlling the number of short-term rentals that are allowed in a neighborhood. One approach is to limit one STR per city block. When such a planning grid is not in place, ordinances will often state a distance between STRs in order to maintain the residential nature of the neighborhood. Cities often cap the total number of STRs by districts or within the City limit. By applying a distance requirement and a cap on the number of permits, STRs can be integrated into residential neighborhoods without the negative effects of reducing the number of available homes or changing the residential nature of the neighborhoods.

Accountability

Issues of accountability must be addressed for the STR permit holder, the transient guests, the marketing platforms and the STR enforcement department. What good are the rules if there is not an audit trail and an enforcement mechanism for everything from nuisance complaints to tax collection? Constant monitoring to identify non-permitted STRs is necessary. Audits of marketing platforms are also important to assure that current permit numbers are posted, applicable taxes are collected and taxes are properly distributed to the City, County and State.

A Model for STR Ordinances

Suggested Requirements for a Short Term Rental Permit.

A permit is only issued to a natural person.

• Proof of ownership: Deed with name of applicant as sole owner, joint owner or revocable trust.

• Proof of primary residence: Affidavit that applicant resides at this address at least 275 days/year.

• Proof of registration with NM Taxation and Revenue: Tax registration is in the name of the applicant/owner.

• Proof of business license in applicant’s name.

• Proof of permission from HOA when applicable.

• Certification from Planning and Land Use of zoning and appropriate use.

• Proof of $1M short-term rental insurance.

• Contact information for natural person who will respond to emergencies within 1 hour and is on call 24/7.

• Floor Plan.

• No open building permits.

• Certification that Applicant has no outstanding warrants, fines, taxes, utility bills or other outstanding obligations to the City or County of Santa Fe.

Required Inspections:

• Inspection by Building Inspector to certify that home complies with all building codes.

• Inspection by Fire Marshall to certify that home complies with all safety codes.

Neighborhood notification prior to issuing permit.

Rules:

• “Hosted” stays are allowed anytime.

• “Unhosted” stays are allowed up to 90 days per year.

• Permit is good for one year and is not transferable.

• Must comply with noise ordinance.

• Must comply with parking requirements.

• No events are allowed without a special permit.

• Permit must be displayed in the residence.

• Applicant’s name and permit number must be displayed in all advertising.

Believe it or not, there are Cities in the US that

prohibit short-term rentals!