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WHEREAS, despite any existing challenges faced by cities in regulating or collecting revenue <br />from the temporary rental of residential units, cities would oppose any effort to undermine their existing <br />local authority to regulate land use or collect local TOT revenue. <br />RESOLVED, at the League of California Cities General Assembly, assembled at the League <br />Annual Conference on October 2, 2015 in San Jose, as follows: <br />Land use regulation and local tax collection are best overseen and implemented locally. <br />2. While temporary rental of residential units can offer innovative opportunities for travelers <br />and property owners within the developing sharing economy, cities must retain flexibility to <br />address any problems raised by such uses in a manner that reflects the unique issues and <br />conditions in their communities. <br />3. Cities have existing legal authority and tools to regulate and collect revenue from the <br />temporary rental of residential units, and SB 593 provides the data and framework that <br />supports and bolsters such local efforts. <br />4. The League encourages cities to support SB 593. <br />/J//////// <br />Backizround Information on Resolution No. 3 <br />Source: City of West Hollywood <br />Background: <br />The sharing economy has quickly become common place in the everyday life of many individuals, <br />whether they participate in ride -sharing, have rented a short-term residential unit, or live in a community <br />were either is prevalent. The sharing economy has provided benefits to many, but also includes many <br />issues that must be addressed in order to allow these sharing practices to effectively incorporate into our <br />communities. Specifically, the short-term rental of residential units has grown exponentially within the <br />last several years throughout the State, and its impacts need to be addressed. <br />Presently, many cities and counties prohibit the renting of residences for less than 30 days. However, <br />these prohibitions are frequently ignored by Online Vacation Rental Businesses ("OVRBs"), causing <br />unwanted burdens on cities while reducing TOT collection from sanctioned hotels. The short-term rental <br />of residential properties presents numerous challenges within neighborhoods and to adjacent property <br />owners. They may create additional noise, traffic, parking, privacy and public safety issues, subvert local <br />rent -control laws, decrease available housing stock and in some cases turn residential neighborhoods into <br />de -facto hotel rows. The rentals facilitated by OVRB's in these cities and counties go against the <br />expressed wishes of the residents. <br />For the cities and counties that do allow short-term residential rentals, most require hosts to register and <br />that transient occupancy taxes be paid. However, registration and payment of TOT in these cities and <br />counties are based on the owners of the short terms residential units voluntarily reporting their rental <br />activity. However, there has been a severe under -registration of hosts and underpayment of TOT. Only <br />10% of hosts in San Francisco have followed the city ordinance to register. Sonoma County has had to <br />spend in excess of $200,000 in an attempt to track down those rentals that are not paying the required <br />TOT under the ordinance. And Los Angeles is currently experiencing a rental housing shortage due in <br />part to the recent popularity of OVRBs. <br />14 <br />