Putting the Genie Back in the Bottle

How do you put the Genie back in the bottle?”  Two local cities (City of Monterey and Carmel-by-the-Sea( and many more across the Country (San Francisco, New York) have done that quite effectively by banning advertising of illegal rentals, with stiff fines for advertising illegal rentals.  Then enforcement is done largely through internet searches by a service already being paid for by Monterey County (Host Enforcement).  After the fines are levied for illegal advertising, the tax department then goes after the scofflaw’s for unpaid TOT and other taxes.  Reductions of 85% to 95% are reported, and revenue from fines and taxes far exceeds the cost.

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The Carmel Pine Cone Volume 103 No. 43




Dozens of listings pulled from internet

SINCE THE city got tough about stopping homeowners from renting out their houses to vacationers, dozens have removed their listings from VRBO.com and similar websites — and six have put their homes on the market — city attorney Glen Mozingo told The Pine Cone this week.

In July, the city signed a contract with a company called Host Compliance that tracks short- term-rental listings on numerous websites and has been compiling the information for the city, so officials can go after the owners. Renting a home in the residential district to anyone for a period shorter than 30 days is against the law in Carmel, but the ordinance had gone largely unenforced for years.

“The comprehensive review of the websites indicates a lot of listings have been removed,” planning director Marc Wiener said Wednesday. “It looked like from what I saw, it’s down to being the range of 50 to 70 short-term-rental listings, total, which I think is pretty good compared to when we first started looking into this a couple of years ago.”

Mozingo said that in the past 65 days, 129 rentals have disappeared from the websites, and he suspects that’s due in part to the publicity surrounding the couple who was sued by the city for refusing to stop using their house as a short-term rental, and eventually settled.

“Apparently my comments at city council have had some effect,” he continued. “Then there are letters that have gone out from our compliance officer showing we know they are engaging in that activity, and that they are to cease and desist, refund money given for any pending transactions, withdraw all advertising or promotion regarding availability of the property, and meet with the city attorney to discuss fees that should have been collected.”

Through Nov. 15, Mozingo is offering a “partial amnesty,” in which homeowners who were illegally renting out their properties for short stays can avoid paying the fees, fines and penalties, though they’ll still have to write a check for the 10 percent transient occupancy tax that hotels pay. (TOT is the single largest source of revenue for the general fund, and the 2017-2018 budget estimates the amount will exceed $6.2 million out of total revenues of $21.9 million by the time the fiscal year ends on June 30, 2018.)

Amnesty ending

Mozingo said there are 49 illegal listings, with another 32 that are suspected but need more research to confirm. Short- term rentals in the commercial zones are legal.

Of those that have removed their listings, seven have come forward seeking amnesty — and have agreed to provide all their numbers so the taxes can be tabulated — while many others have simply vanished.

“Some of them are just taking off and disappearing and hoping we don’t follow up,” he said. “Our intention is to follow up on all of them.”

And after Nov. 15, the owners will be on the hook not just for the back taxes for up to four years, but for all the fines, fees and penalties, too.

“The whole theme was to gain the community’s cooperation and compliance. The law has been on the books for 27 years but never really been enforced until now,” Mozingo said. “We’re very pleased with the response, and we will continue to monitor and take enforcement steps to ensure this activity is terminated and won’t be repeated.”



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