Owner of former short-term rental property in Hermosa Beach disputes city penalties
Hermosa Beach City Hall. File photo
by Ryan McDonald
As the city continues enforcement of its prohibition of short-term rentals in residential areas, a property owner who previously sued the city to block the law is again in the crossfire, this time as the recipient of some of the hefty fines that the law imposes.
Jim Holtz, owner a South Hermosa property that until recently operated as a short-term rental, says he complied with the new law, but is now facing $15,000 in fines. He believes he has been treated harshly because "the city wants to make a statement with me."
"I thought it was going to be about compliance. But it now seems to be about punishment," Holtz said in an interview.
The city, for its part, says that the law is being administered uniformly, and that any claims Holtz has must be addressed through the traditional appeals process.
The fines stem from three alleged violations of laws passed by the city in June. Notably, the law made punishable advertising of short-term rentals. Police and code enforcement officials had struggled to address the problem by responding to nuisance calls at problem properties. And Airbnb, VRBO and other websites have still not responded to outreach from Hermosa, according to Community Development Director Ken Robertson. (A search for "Hermosa Beach" on Airbnb reveals hundreds of properties still available.) So the city targeted online ads, imposing an escalating schedule of fines on property owners who offer their homes for rent for periods of less than 30 days.
The city began enforcing the advertising provision in the end of August, according to Code Enforcement Officer Justin Edson. Holtz said that he changed the online settings for his property in late June to indicate that it could only be rented for 30 days or more. But at least one site, Dreamcatcher, continued to run Holtz's listing as a short-term rental.
Holtz, a San Pedro resident, said he did not become aware until October, when he came by the Hermosa property to check on an occupant with two-month tenancy. He found three certified letters from the city in the mailbox: a warning letter dated Sept. 14, a first violation notice dated Sept. 24, and a second violation dated Oct. 9.
Under the law, the first violation carries a penalty of $2,500, the second $5,000. On seeing this, Holtz said he attempted to get the owner of Dreamcatcher to take down the listing and, when this did not work, contacted the web hosting company to temporarily shut down the site. Holtz tallied a third violation, for $7,500, on Oct. 24, from an advertisement on a Manhattan Beach-based website that he said he was unaware of.
State law requires Holtz to pay the money owed prior to going before an appeals officer. Holtz has filled out a request for a financial exemption, and said that, because he attempted to take the listings down, his violations are not the kind of thing the city intended to target with its law.
Robertson said that the city looks at the circumstances of all claims and, if Holtz's claims are true, he will have an opportunity to make his case.
"That's something we're trying to figure out. If that's true, he can make that case through the appeals process," Robertson said.
Holtz also claims that his situation reveals underlying problems with the advertising provision of the law. He said he often finds fraudulent listings for his property, for he which he could theoretically be held responsible.
"I am constantly finding my ad copied on Craigslist. Some person in Nigeria will say 'short-term rental,' at my place, and 'pay in Bitcoin,'" Holtz said.
Because rental websites do not list the addresses of offered homes, the law's enforcement scheme included a contract with Host Compliance, a San Francisco web site that uses Internet metadata to link listings with addresses. Ulrik Binzer, founder and CEO of Host Compliance, said that the company relies on 18 different publicly available data sources, but that "it would be hard" for the company to identify fraudulent listings with its software, and that such an issue would be dealt with on the city's end.
Edson said that the city's code enforcement operation thoroughly investigates all claims. He noted that the city has identified 180 properties through Host Compliance's database, but that only a fraction of those have received citations.
"Before we issue any citation, we make sure that all the evidence, everything that we have been provided, is accurate in our belief," Edson said.
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Source: Owner of former short-term rental property in Hermosa Beach disputes city penalties
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