City Faces Deep Red Ink Without BandB Tax Revenue, But Residents Say Consultants Ignored Real Costs
Written by 991KBU on October 4, 2019
BROADCAST FRIDAY MORNING. POSTED FRIDAY NIGHT. TYPO CORRECTED SUNDAY
Malibu’s city government is hooked on tax revenue from overnight rentals.
That’s the message delivered by a team of outside financial consultants … delivered to a city council subcommittee meeting yesterday.
A packed conference room … dozens of Malibu residents … most of them furious that after five years of talk,,, the city has bot cracked down on wayward B and Bs.
The consensus from both proponents and opponents of hotels accommodations in houses … get rid of the party houses.
But not the legit B and Bs where people stay quiet in houses occupied by a host.
But revenue from the city’s tax on overnight rentals is a lifeblood to a city left reeling from the Woolsey Fire.
In five years … the city will be down 13 point 4 million dollars … asa a result of the fire.
And overnight rentals provide 2 and a half million dollars a year … more than 6 percent of the city’s revenues.
They are also making life hell for some Malibu residents.
Joanne Gehry … for example .. testified that she cannot rent out her house because of the spectacle next door.
NEWSCART 75306 ONITE GHERY
“The problem with renting my house, according to the Realtor, is that I’m lying next door to an Air B and B rental.
“The rental property is owned by the Madison Corporation.
“They don’t take care of the property.
“And they allow parties of 40-30 people.
“My bedroom is 20 feet away from that house.”
And that house features house parties with occasional naked women and public urination.
Resident Kraig Hill yesterday said the financial analysis presented to the city was incomplete … as it did not compute financial hits to the city from overnight rentals.
NEWSCART 75299 KRAIG HILL
“The report didn’t look at a lot of those things. It just looked very narrowly at how much revenue they might lose if we didn’t have short term rentals.
“And they didn’t try to balance that against a lot of other factors.”
Residents pointed out that the dire financial picture painted … without overnight rental tax revenue … did not include money that the city will like be reimbursed by FEMA for the fire and floods.
It also did not include money that the city might win as it fights Southern California Edison in court.
The council subcommittee members said from the outset that the only issue being examined yesterday was the financial impact of B and Bs.
But residents made it clear that they felt the consultants report did a crummy job of that.
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Santa Monica’s residential overnight rental program was just upheld by the Ninth Circuit Court of the United States.
And that will have major impact all across the state.
The federal appeals court said the City’s rules do not violate regulations on interstate commerce.
A Santa Monica resident had alleged that the restrictions violated constitutional protections on interstate commerce because they unfairly restricted the ability of visitors to access the coast.
The Court said the ordinance does not discriminate against interstate commerce by favoring in-state over out-of state interests and determined the ban on vacation rentals applies in the same manner to persons nationwide, including Santa Monica residents who may be interested in renting a vacation home from another resident.
A federal court rejected Rosenblatt’s case for the first time in 2017 and the 9th Circuit also ruled in the city’s favor earlier this year in a similar case brought by companies Airbnb and HomeAway.
One posted version of this story posted Friday identified Kraig Hill as Kraig Foster, an error that was corrected Sunday.
