Is 1,700 units at all meaningful for Santa Monica housing prices? Is it worth the city expending all these resources to stop what seems like a blip on the radar?
Maybe somebody else will actually repeat the Egan analysis with Santa Monica-specific regressions and so forth. Perhaps the model itself could be improved.
Also, if there are so many people willing to pay so much to spend a night in Santa Monica, maybe it wouldn't be such a bad thing to have both long-term and short-term housing?
But it doesn't really matter does it? AirBnB is a political issue in all these places and the rabble don't care about your "data" or "logic." They are fed up with high prices and arrogant "disruptive" tech bros and they are ready to take action!
Second, AirBnB is more than a political issue and referring to people as "rabble" just because they disapprove of illegal rentals is pretty arrogant. I live in Santa Monica, work in tech, and absolutely do not want any of my neighbors renting their apartments on AirBnB. One of my neighbors did so for a while last year and the result was the entire complex repeatedly having to deal with unruly visitors being overly loud at night and trashing the common areas.
If you want to make money on rentals, buy a property that allows you to do that, and where everyone around you knows that's going to happen and can plan accordingly. If you don't want to do that, then you don't get the right to abuse your apartment complex or neighborhood just because you want to make some money. Treating AirBnB rentals like they have zero impact on anyone but the renter and owner is disingenuous and shows a certain level of selfishness with respect to the actual complexities of the situation.
I admit 5% isn't nothing. But if your problem is that rents are rising 25% pa in your town, a one-time decrease of 5% isn't much of a solution.
Now imagine getting a new neighbor every week. Once he quiets down, there's a new one. That's living next to an AirBnB.
Your 5% figure is based on a model purpose-built for San Francisco. In particular the number for elasticity of demand is likely wrong for Santa Monica. Considering how sensitive the model is to this parameter, it seems pretty iffy to present 5% as a meaningful estimate of anything.
Market rate for a (very) modest 1 bed is 2k/mo. 2bed is 3k/mo.
I wouldn't call it a blip on a radar.