Property owners in Santa Fe County will have until March 2023 to apply for permits to operate short-term rentals under new regulations adopted on a 3-1 vote by the Board of County Commissioners on Tuesday.
Between next spring and March 2024, however, new purchasers who don’t live on site won’t be able to apply for permits. The county expects to spend a year of moratorium to collect information to decide whether to cap new rentals or limit those that are operated by out-of-town owners.
Commissioner Anna Hansen, who voted in favor of the rules along with Commissioners Anna Hamilton and Hank Hughes, said misinformation had circulated among property owners and emphasized at the start of Tuesday’s hearing that the county was not proposing to prohibit any current short-term rental operations from continuing as long as they meet application requirements. “What we are going to do is to get everybody registered under the ordinance…so that we can see how many non-owner-occupied STRs there are,” Hansen said.
County Growth Management Department Director Penny Ellis-Green noted in a prefacing memo that the rentals have both positive and negative effects on the county, including income for rural residents. Yet, the moratorium on newly acquired properties, she wrote, will “avoid growth impact and temporarily stabilize local housing while the county investigates relevant issues related to…housing supply, areas where STRs conflict with primary residential uses established in traditional and historic communities, non-compliance and enforcement issues” and other concerns.
The ordinance calls for a stricter level of annual review and higher fees for non-owner-occupied units than those with owner-occupants. For example, while non-owner-occupants must submit water-use readings annually, owner-occupants don’t have that restriction or certain others. STR operators will be required to notify neighboring residents about their rentals.
Andrea Dobyns, president of the Santa Fe Association of Realtors, told commissioners the association opposes the ordinance because it will negatively affect the value of homes in the county.
“The ordinance in its current form is inherently unfair. The regulation will protect existing property owners’ right to rent short term while eliminating that right for new property owners,” she said, adding later that the rules would “create a market advantage for existing property owners for the foreseeable future.” Further, Dobyns said, the ordinance definitions for transfer of ownership aren’t clear.
Residents from Pojoaque to Madrid and other regions of the county testified at the hearing, the commission’s third on the topic. Many argued against the rules, including fees of $35 per year for owner-occupied units and $375 per year for non-owner-occupied; others said county rules were long overdue since the City of Santa Fe has regulated such rentals for years and the region faces a shortage of long-term housing.
Buck McKinney, who said he’s hopeful that his second home in Santa Fe County will soon be his primary residence when he moves from Texas in the coming years, was among those who opposed the ordinance.
“It paints with a broad brush, including across-the-board restrictions without regard for the very different settings in which STRs may be operating…I respectfully submit that the operation of STRs in Madrid face very different challenges than STRs in the rural areas such as the area in which our second home sits on over 5 acres in Chupadero. It’s bound to be too much in some places and not enough in others,” he said.
Heather Nordquist, a resident of the county’s northern region, argued against correlating the county’s affordable housing shortage with the short-term rental market.
“There’s an idea that if you could just force private property owners to do something different than [what] they are currently doing, that that’s going to add to alleviating this problem,” she said, adding later, “That is not the responsibility of private property owners.”
Pat Lillis called the moratorium on new non-resident owner rentals “a good idea.”
“The moratorium will temporarily limit the expansion of new investor rentals while allowing the time to assess their impact on housing,” she said. “Places with housing challenges such as Santa Fe are left vulnerable to speculation without a STR ordinance. The loss of affordable housing to investor-related short-term rentals is the reason ordinances have become the way of the world.”
Short-term rentals have been regulated within the city limits for years, with an early cap of 350 permits hiked to 1,000 in 2016 and amended again in 2021 in an attempt to address a lack of affordable housing for locals and prevent illegal rentals. Initial permits cost $425 and are limited to one rental per seven days. Hansen noted she believes the county, which doesn’t limit the number of permits or rentals per month, will offer a more “liberal” ordinance than the city.
Commissioner Rudy Gracia abstained from voting in the matter and Commissioner Henry Roybal voted no, with both noting they believed the county could collect information without the moratorium.
“We need to gather data before we put this in place,” Roybal said. “I think the county can work on gathering that data without the moratorium.”
