Short Timers | | Santa Fe Reporter
The Santa Fe County Board of Commissioners will hold two public hearings for residents to vote on a proposed ordinance to impose fees and other rules for operating short-term rental properties.
Platforms such as Airbnb and Vrbo have made it easier to rent homes in tourist markets, and city officials have worked for years to regulate the practice. While the city’s first rules had a much lower cap, in 2021 Santa Fe limited the number of rentals in residential areas to 1,000 and said unlimited numbers would be allowed in commercial areas.
In the county, commissioners would regulate short-term rentals for the first time and are considering limiting the number of rentals. But staff from the Department of Growth Management said at Tuesday’s meeting that more data was needed to determine the type of houses rented, their number in a particular area and their frequency of use. The answers to these questions would come from an authorization process for rentals.
Proposal arrangement would require individuals to obtain business licenses to operate rentals for periods of less than 30 days in addition to paying fees of $375 for an initial license and $300 for annual renewals.
With the city and county facing a long-term housing shortage, officials worry about an already tight housing market. Because short-term rentals are typically found in residential areas, tourists occupy space that could otherwise be used for living. According to the county, this has led to a drop in available housing in some places.
“When I asked some of my constituents, everyone was in favor of some sort of limit, because I think people are worried about what happened in other communities and even in the center -City of Santa Fe, where it’s much more problematic,” said District 5 Commissioner Hank Hughes. “It’s not a problem like we can see in the county at the moment, but of course the time to fix it is before it becomes a problem and not after. I’m fine with getting the data first and setting some kind of limit later if we can see what might be appropriate.
As the county hopes to collect data, some of the concerns Hughes alluded to are reflected in a study 2019 by economist Kelly O’Donnell conducted for the non-profit organization Homewise. “The recent proliferation of short-term rentals (STRs) marketed on platforms like Airbnb has contributed to the rapid escalation of house prices and rents,” she wrote, concluding that “the conversion of homes and short-term rental apartments is reducing the supply of housing, putting upward pressure on rents and house prices across the city. Since December 2014, the number of STRs in Santa Fe has increased by an average of 50 % per year Over the same period, rents have increased by an annual average of 4.9% and median house prices have increased by an annual average of 10%.
According to estimates compiled for the county by Host Compliance, which specializes in analyzing data across all lodging platforms, Santa Fe County already has a variety of homes advertised as short-term rentals, including single-family homes. , chalets, motorhomes and hotels. The proposed order would cover most types of housing units, but short-term rentals that don’t meet the new requirements would likely have to be closed, department staff said.
Funds from permit application fees would pay for enforcement and compliance, according to County Executive Greg Shaffer, including to the Santa Fe County Fire Department, which would conduct fire inspections. The county would also receive business tax funds on gross receipts.
Santa Fe County Assessor Gus Martinez said the order could impact the taxable use of some properties, changing their categorization from residential to commercial, which would increase tax rates.
“Different types of short-term rentals will be affected differently,” he said. “If you’re from out of state and don’t actually live there, it could be commercial use. If you’re residing in your home, it could still be residential. If you have a guesthouse, it depends on the size of the guesthouse.
Commissioners asked the Growth Management Department to provide insight into the positive and negative impacts of short-term rentals on communities. Some of the advantages, a note to the council noted, including providing a source of income for residents, meeting a demand for this type of rental, and allowing more tourism dollars to flow into the local economy.
The department also found, however, that short-term rentals can drive up house prices, put pressure on the accommodation industry and be a problem for neighbors. Department Director Penny Ellis-Green told the commissioners at a meeting in June that there were 541 active listings in unincorporated Santa Fe, with vacation rental groups in Madrid, Cerrillos, Chimayó, Pojoaque Valley, Eldorado, and communities surrounding the city lands.
If adopted, officials expect to see a flood of applications within four months for short-term rentals, and after another six months, county staff expect to have enough data to determine the type of restrictions to be imposed on the market, if any.
The next step in the process requires the county to issue notice for upcoming hearings, the dates of which are yet to be determined.