Mayor: City must act on short-term rentals

There are too many illegal short-term rentals in Santa Fe, and the practice must be curtailed or stopped. That was the message Mayor David Coss gave to city staff and councilors Friday at a special meeting on the long-running issue.

“The number is growing while we don’t do anything,” Coss said of homes rented to vacationers, mostly in neighborhoods on Santa Fe’s north and east sides. “It’s time to put boundaries down and say ‘this is it.’ ”

The study session, attended by all councilors except Rebecca Wurzburger and Matthew Ortiz, was called after the City Council failed to reach consensus after numerous meetings aimed at hammering out an ordinance acceptable both to neighborhood groups and to property owners and managers.

Under existing city ordinances, it is illegal to rent guesthouses, investment properties and second homes in most residential areas for fewer than 30 days.

City hall has turned a blind eye to the practice for years, but as such rentals increased, neighbors began to complain about a revolving door of inconsiderate short-timers. Among the complaints: renters who park in the wrong places, make noise and leave trash.

Owners of such rentals — which range from guesthouses rented during Indian Market to multi-unit compounds managed by real-estate firms — have called for a change in the law to legalize short-term rentals.

Supporters of short-term rentals say it is a valuable part of the city’s tourism and real-estate industries. They argue that the practice gives visitors a chance to mingle with locals.

Councilor Karen Heldmeyer, who drafted an ordinance that never made it out of committee, agreed with the mayor that the council needs to do something.

“We just keep letting it happen because people with wealth and power have said ‘we want to keep doing this,’ ” she said. “And that doesn’t seem like a good reason to me.”

City staffer Jeanne Price presented nine possible options:

Prohibit short-term rentals in all residential districts.
Allow “very, very limited” short-term rentals by owner/occupants.
Temporarily grandfather in existing short-term rentals, with a specific cutoff date.
Permit guest houses to be rented for short times if the owner occupies the main residence.
Permit some short-term rentals as a special exception in certain districts.
Create overlay zoning that would permit short-term rentals in defined areas.
Permit outright short-term rentals in all or some residential zoning districts.
Permit short-term rentals only for certain types of properties, such as condominiums with amenities, private parking and security.
Determine the number of short-term rental permits the city is willing to allow and conduct a lottery to see who gets the permits.
Coss said he favors grandfathering in existing uses with a clear end date. But other councilors think it might be tricky to decide which rentals get grandfathered.

“Santa Fe, when I was younger, was known by its movidas, for lack of a better word,” Councilor Carmichael Dominguez said, using a local term that can refer to sly schemes. “How would we deal with people who said they got permission from somebody on the council a long time ago and they don’t have any proof?”

Price also presented annual cost estimates for administering several of the scenarios:

Enforce existing law: $188,594.
Allow special exceptions: $367,240.
Grandfather in existing rentals: $287,379.

City Attorney Frank Katz told councilors he received a letter from an attorney threatening some sort of legal action. Katz suggested the council “evaluate the strength of that” in a closed-door session before making any decisions.

Though it was not a public hearing, several members of the public spoke. Fred Rowe cautioned the councilors not to make a decision based on threats of mass unemployment or lawsuits. He suggested the city should “maybe get the facts about what the actual situation is.”

City Manager Galen Buller said after the meeting that the city has looked into legal implications surrounding the issue but doesn’t have much hard data about the number of rentals or the amount of money at stake.

The council will consider Katz’s advice in a closed session at its next meeting and present some type of ordinance aimed at regulating the industry Nov. 28.

“Or we can not pass anything and start to enforce the existing ordinance,” Coss said.

Contact Phaedra Haywood at 986-3068 or phaywood@sfnewmexican.com