AirBnb

Santa Monica Evicts Airbnb: The War on Homesharing

The popular "homesharing" service made it affordable to book a beachfront property in Santa Monica. Then the city intervened.

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Airbnb host Scott Shatford was the perfect target for Santa Monica, California's newly formed Vacation Rental Enforcement Task Force: a slick, unapologetic entrepreneur exploiting a regulatory loophole to make a ton of money in a saturated housing market.

It didn't matter to city officials that Shatford was part of the dynamic, burgeoning "homesharing" economy that was bringing millions in tax revenue to Santa Monica. He was blatantly disregarding the city's unanimously passed ban on short-term vacation rentals, literally gloating that the regulation was "not that enforceable."

Santa Monica's beachfront views and iconic attractions draw more than 7 million tourists to the oceanside city annually, but a room with a view at the Loews goes for between $400-500 a night. While they might not get room service or robes, tourists proved eager to book spacious, well-kept homes on Airbnb that were generally cheaper than a hotel. Around 2008, thousands of condos, houses, and apartments began appearing in the 8.3-square mile beachside suburb.

At the same time, the most enterprising Airbnb hosts started raking in serious cash. Shatford claims he was earning more than $400,000 in revenue off seven properties at his peak.

Then in 2015, the city task force booked one of Shatford's newly-illegal rental properties for four nights at a cost of $1,200.

"I think that they wanted to make an example out of me because I was a bit more in the public eye," says Shatford. "I was vocal about how I thought the regulation was unjust, about how I thought there was possibly corruption on the city council."

So what was behind the city's crackdown? Officials with the city of Santa Monica declined to be interviewed for this story, but records show that several took large campaign contributions from the city's hotel lobby and the "renter's rights" interest group that believes Airbnb is responsible for driving up rents.

The city took Shatford to court and ended up reaching a $3,500 settlement. He's since left Santa Monica for the more Airbnb-friendly city of Denver, Colorado.

"What Scott is doing is creating wealth," says Christina Sandefur, a lawyer with the free-market oriented Goldwater Institute. "What the city of Santa Monica has done is destroyed wealth [by driving out]…people like [Shatford] who found a way to offer a service to people that they wouldn't have otherwise [had]."

Sandefur says what happened in Santa Monica is part of a nationwide trend: Airbnb and other homesharing sites are under siege in places like Chicago, Kauai, and New York, which just issued its first illegal rental fines yesterday.

For more, watch the full video above.

Produced by Zach Weissmueller. Graphics by Josh Swain. Music by Josh Woodward, Chris Zabriskie, and Jahzzar.

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