TRANSIENT HOUSING BELONGS IN DOWNTOWN COMMERCIAL DISTRICTS, NOT RESIDENTIAL NEIGHBORHOODS

"Short-term" rental is the euphemism for illegal transient housing in residential neighborhoods. Zoning codes across the nation prohibit commercial uses including transient rentals in residential neighborhoods. There are sound land use policy reasons for this prohibition, though the City's long term failure to enforce the law suggests a phased approach to ending the illegal use.

Management companies assert that transient rentals are important to this City as they generate substantial taxes and jobs. They are correct. Transient uses (e.g. hotels, motels, resident inns, apartment rentals of less than 30 days) serve our tourist economy and generate much of the tax revenue that funds our governmental services.

Transient uses, be they expensive vacation rentals on the East Side, or pay by the night housing on the west side, are a profound intrusion into quiet neighborhood life. We all have the right to know who is living next door or across the street. A neighbor knows our name, knows which house has a pet that may run out, and if the crying child belongs with the adult it is with. Transients do not take care of or contribute to a neighborhood, do not pick up after themselves, and sometimes behave as if they purchased the right to create a disturbance. Transients are destructive of the fabric of a neighborhood and should be prohibited in residential districts.

Santa Fe defines "Transient" as "An overnight stay of less than 30 consecutive days". Most codes in other cities set the minimum at from 60 days to a year to accomplish the objective of preserving neighborhoods. Santa Fe's much more lenient restriction accommodates Opera rentals, month-long vacations and should be the absolute minimum that should be considered in a neighborhood.

Attracting people downtown is sound land use policy. The demand for the short-term rental of apartments with kitchens, as opposed to hotel rooms, is going to be little affected by where they are located. Prices are too high to expect many people to live downtown as full time residents, but the rates charged for transient uses including hotels and short-term rentals makes those viable and desirable residential uses downtown.

The years of no enforcement on illegal transient housing in residential neighborhoods has caused several problems.

First, it has damaged the cohesiveness of many neighborhoods. This damage must be rectified.

Secondly, many people have purchased property as a second home or investment being told that transient rentals would help pay the mortgage. They are responsible to know the law; but often they did not understand such rentals were illegal and those they dealt with did not inform them.

Third, the number of illegal short-term rentals has exploded in recent years. This has lowered everyone's occupancy rates, hurting the business in downtown where it is lawful and desirable. If the illegal business in residential areas were terminated, the downtown market would expand to fill the void.

Eliminating the damage to neighborhoods is served by quickly terminating the illegal uses. Consideration of owner's who have relied on the business, and the desirability of smoothly shifting short-term rentals to where they are legal, suggest phasing out the illegal uses.

On method of phasing out the illegal uses would be to set a date before which the use is grandfathered and after which it is illegal. This would permit the current illegal short-term rentals to continue. But once the use was abandoned it could not be resumed. The transient rentals in residential districts would fade out over time and downtown owners could plan an entry into the business. At the end of some period of time or upon change of ownership the grandfathering could expire and the use terminated in residential neighborhoods.

The management companies proposals for rules of conduct and tax collection are useful, but ignore the need to shift the location of this business. The current proposals to impose rules and regulations and limit the number of rentals per year per location are a compromise that hurts owners with fees and rental limitations, and does not move the business from neighborhoods. Such proposals would maintain the current situation of a lot of marginal short term rentals in neighborhoods keeping the occupancy rate down so that the business would not be profitable in downtown.

The grandfathered locations would have to pay sales tax and lodger's tax, register with the City, and comply with reasonable rules of conduct to eliminate the worst abuses. The City must enforce the law to prohibit new transient rental locations in residential neighborhoods. The long-term objective must be to preserve and restore neighborhoods, encourage the presence of people downtown, and collect taxes from tourists.

-- Richard Ellenberg