SANTA MONICA—The U.S. Court of Appeals for the Ninth Circuit has sided with the city of Santa Monica against Airbnb, Inc. and Homeaway.com’s challenge to the city of Santa Monica’s Home-Sharing Ordinance. The law, which was enacted in 2015, regulates the short-term vacation rental market, defined as any housing rental for 30 consecutive days or less, by mandating that residents must receive licenses from the city in order to rent out property to guests. It also ordered residents to remain on the property to act as hosts during the entire duration of the guest’s stay.
According to a statement released by the city of Santa Monica, the ordinance was enacted to protect residents of Santa Monica and maintain affordable housing, “Santa Monica’s Home-Sharing Ordinance is a key element of the city’s work to produce, preserve and protect housing in Santa Monica. The regulation strikes a careful balance: It allows residents to invite visitors into their homes for profit when a resident is present in home and possesses a City business license; but it otherwise prohibits property owners and online platforms like Airbnb, Inc., and Homeaway.com from booking residential properties for short-term vacation rentals.”
In 2017, the city amended the ordinance to include prohibiting businesses, like Airbnb and Homeaway.com, from collecting fees for booking services on unlawful, unlicensed short term rentals. Airbnb, Inc. and Homeaway.com Inc, argued that the ordinance violated the federal Communications Decency Act and First Amendment rights because it required each company to monitor and remove third party content. In March 2019, the Court of the Ninth Circuit rejected this argument stating that the law never mentions regulating the content of the website. It only restricts monetary transactions to only include licensed properties.
The Court of Appeals of the Ninth Circuit maintained the Court’s previous ruling, denying the assertion that the city of Santa Monica violated the Communications Decency Act and First Amendment.
“We are thrilled to have confirmation from the Ninth Circuit that our balanced approach to home sharing is permitted at a time when housing and affordability continue to challenge the region,” said Santa Monica Mayor Gleam Davis. “This is a big win for Santa Monica residents and our residential neighborhoods.”
The city of Santa Monica was represented by lawyers from the Santa Monica City Attorney’s Office including Special Counsel/Chief of Staff George Cardona, Yibin Shen, Heidi Bon Tongeln and Michael Cobden.