Is it a doomsday scenario for vacation rentals in Santa Fe?
Some rental owners and managers think so.
A draft city ordinance would tighten regulations for short-term rental properties, in part prohibiting new permits to be issued for units in residential areas that lie within 75 feet of an existing rental. The goal of the provision is to limit the density of vacation rentals in residential neighborhoods, the draft ordinance says.
Among other provisions in the measure:
- A new permit would be issued only to a “natural person” rather than a limited liability company or trust.
- Each vacation rental owner would be able to hold only one permit in Santa Fe.
- The owner or operator of a rental unit would have to live in the city and be available at all times.
- Rentals would be limited to one guest or group in a seven-day period.
Existing rental units would be grandfathered in, even for future permit renewals, for current property owners. If a vacation rental is sold to a new owner, however, the proposed changes would apply.
“It’s just a complete decimation of short-term rentals,” said Richard Woodruff, co-owner of Adobe Casitas Vacation Rentals, who manages 18 short-term rentals in the city.
“If you look at the turnover of homes in Santa Fe, over the longer term, four to 10 years, a majority of short-term rentals would not be granted licenses,” he said.
Rental unit owners frequently use trusts for their children or an LLC to own and operate short-term rentals, he added.
The Santa Fe Planning Commission will consider the changes, proposed by City Councilors Signe Lindell, Carol Romero-Wirth and Renee Villarreal, during a virtual public meeting at 6 p.m. Thursday.
As of May 28, Santa Fe had 830 permitted vacation rentals — 743 in residential areas and 87 in areas zoned nonresidential, according to city data.
Woodruff said he has analyzed how short-term rental properties are situated and believes as few as 250 would comply with the 75-foot rule as ownerships change.
While the city’s short-term rental ordinance limits vacation rental permits to 1,000, Denver-based data company AirDNA estimates Santa Fe actually has 1,825 active short-term rentals, with half operating without permits.
This raises the ire of AdobeStar Properties owner Andy Duettra‘.
“Require the city to better enforce the existing [ordinance], as they never have,” Duettra said.
Hope Reed, a board member of the Don Diego Neighborhood Association, also questioned the enforcement of the current vacation rental rules. “Who’s going to check that all the time?” she asked.
But if the proposed rules take effect, she said, pointing to the 75-foot rule, “if somebody wants to complain, they can complain by that rule.”
Santa Fe residents often complain short-term rentals affect the character of their neighborhoods, increase traffic and noise, and pose parking problems — some of the issues the city’s rental ordinance was created to address.
But property owners with rentals in the downtown Business Capitol District argued their units should have a different set of rules than those in residential areas.
“Why would you bring any residential rules to a business zone?” asked Duettra, who developed and owns 32 short-term rentals and manages eight others downtown. “... We operate a lodging business in a commercial zone,” he added. “It is inappropriate to apply well-intentioned rules meant for limiting and regulating [short-term rentals] in a residential zone in a business district.”
Victoria Rogers, who owns one downtown short-term rental unit, also wants rentals in commercial zones to be treated like other businesses.
“Short-term rentals in commercial zoning should have the privileges of commercial business and other lodging establishments,” Rogers said, noting the proposed changes to the rental rules would set vacation rentals in commercial zones apart from hotels and bed-and-breakfasts.
Under the rule calling for only “natural person” ownership, Duettra said, he might not be able to add to his 32-home holdings. He has converted several “unused or underused” downtown commercial properties into short-term rentals.
He also took issue with a rule that would allow a vacation rental, even in a commercial zone, to host only one guest or group in a seven-day period.
“That would drop us to a maximum 50 percent occupancy, and revenue would drop to 35 percent of what it is now,” he argued.
The goals of the changes are to ensure vacation rentals do “not disrupt the character of the city’s neighborhoods” and to “prevent speculators from purchasing multiple homes for the purpose of operating multiple short-term rental units,” according to the Planning Commission agenda.
Many in the vacation rental business see the other side of the coin, however.
“The short-term rentals might go away as an industry if they approve this,” Woodruff said.
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Santa Fe wants to tighten restrictions on short-term rentals - Santa Fe New Mexican
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