City tax revenue from vacation rentals increases

Revamping its ordinance on short-term housing rentals, stepping up enforcement and signing a deal with Airbnb for the online booking service to begin collecting long-ignored room taxes are bearing fruit for the city of Santa Fe.

A city staff report shows lodgers tax revenue this fiscal year is likely to come in at more than double what the city collected before the 2016 changes, which included raising the cap on short-term residential permits to 1,000 from 350, lowering some fees, adding staff and software to administer the ordinance, and imposing stiffer fines for violations.

The hotel/motel industry, which still accounts for the lion’s share of revenue from the 7 percent tax on stays of 30 days or less, pressured the city to level the playing field. Research by city staff before the overhaul found close to 1,400 vacation rentals were being advertised in the city.

The new data show the city issued 893 permits for short-term residential rentals in January, the month when most property owners renew their permits, and that during the previous seven months the city took in more than $928,000 in taxes on such rentals, which exceeds the amount collected during the entire previous 12-month period.

Computer software detected 50 possible violations since 2016, and the city issued 10 notices of violations, which are handled through Municipal Court.