Supreme Court Declines to Hear Santa Monica Ordinance Limiting Airbnb

Holland & Knight LLP

Holland & Knight LLP

[author: Geoffrey Kelly]

On May 18, 2020, the U.S. Supreme Court refused to hear a case involving a Santa Monica ordinance aimed at banning the short-term leasing of entire residential properties by Airbnb, HomeAway and other rental platforms. The Court did not comment on its refusal to hear the case, Law360 reports.

The 2015 Santa Monica ordinance permits short-term rentals of a private room in a home while the host is present but does not allow short-term rentals of an entire residence. According to its proponents, the ordinance is designed to keep Santa Monica's limited long-term rental housing availability on the market rather than essentially becoming unlicensed hotels. A Santa Monica resident challenged the city ordinance citing violation of the Constitution's commerce clause, constitutional rights, the California Coastal Act and declaratory relief. The U.S. Court of Appeals for the Ninth Circuit subsequently ruled the ordinance does not restrict interstate commerce because the ordinance is applied to anyone seeking short-term rentals in the municipality, regardless of whether the visitors are in-state or out-of-state. The Ninth Circuit panel held that although most vacation renters come from outside California, it was not enough to prove the ordinance violates the Constitution.

In 2019, the Ninth Circuit upheld that a separate Santa Monica ordinance requiring residents using short-term home sharing platforms to obtain licenses does not run counter to federal law or the First Amendment. The ordinance, however, does not require the online platforms to remove listings by unlicensed renters.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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