Updated on May 6, 2023
Campanilla Compound has long invited visitors to “live like a local” in Santa Fe, New Mexico, decades before Airbnb was created.
“We had that niche in Santa Fe for a while, for people to rent a home in a residential area, when no one else was really doing that,” said Elizabeth O’Dowd, Campanilla Compound’s manager.
The charming community was built in the 1980s. It is made up of 15 luxury casitas in a traditional Southwestern style, nestled together in a residential area in the city’s historic center.
Campanilla operates on a unique model that allows owners to hold quarter deed shares in their homes. This arrangement allows owners to live in the properties for part of the year and gives them the opportunity to rent them out to guests when they’re not in town, with owners earning 70% of rental revenue and the rest going to the compound association, which takes care of all maintenance.
The result is a year-round mingling of residents and visitors in a close-knit atmosphere. Many of the original owners of the Campanilla residences or their families still hold shares today, with others transitioning from owners to regular visitors (or visitors to owners) over the years.
At any given time, Campanilla has about 50% occupancy, with 11% to 15% owners and the rest visitors. Guests are often introduced to the community by owners, and two-thirds of guests are repeat visitors. Several guests stay at Campanilla every year or more — some for decades.
“They’re just part of our family. When they’ve been here so long, there’s really no distinction between guests and owners,” Elizabeth said.
From Guests to Residents Through Short-Term Rentals
Mike Henry is one of the quarter-owners of Unit 14, a two-bedroom Campanilla home. He and his wife, Linda, purchased the home seven years ago. As a kid, Mike frequently visited his family’s house in the mountains near Denver, and he fondly remembers those vacations. So, when he and Linda wanted a special place for getaways of their own, they looked to vacation rentals and chose Santa Fe for its vibrant atmosphere and renowned attractions.
They chose to purchase in Campanilla specifically because it is the essence of Santa Fe, Mike said. They love its location blocks from the popular downtown plaza, its adobe architecture, and beautiful desert ambiance. “It’s absolutely charming.”
They visit the home as much as possible, sometimes four or five times a year. When they aren’t there, they open the home to short-term rental guests to share the authentic New Mexican experience with others and help cover their quarterly dues.
Keeping Short-Term Rentals Alive When Santa Fe Needs Them Most
According to TOURISM Santa Fe, the city welcomes an average of two million overnight visitors every year, and the hospitality industry is the largest employer second only to the government. The city is known for being an artistic hub, a center of culture and history, and a haven for outdoor enthusiasts.
The city began requiring all short-term rentals to collect and remit tourism taxes in 2019, including lodgers tax and gross receipts tax at a combined 15.437%. In February of last year, TOURISM Santa Fe estimated that the lodgers tax alone from short-term rentals would be $2 million in the June 2018 – May 2019 fiscal year. This is an important contribution to the Santa Fe and New Mexico economies.
In 2020, the Covid-19 pandemic prevented (and continues to prevent) many from visiting, a loss for the whole community. The tourism director expects a loss of $3 million in lodgers tax alone this year.
“Of course, this is an unusual year; people didn’t travel. We had one family who called us this year apologizing for not being able to make it for the first time in 27 years,” Elizabeth said.
Thankfully, tourism is starting to recover citywide, but Campanilla and the broader short-term rental community is facing a new threat: overregulation by the city. Originally, Campanilla was able to legally rent out its residences for short terms under a single business license for the whole community. In 2017, when Santa Fe’s short-term rental law was introduced, Campanilla was required to get a short-term rental permit for each home. It has complied with those rules as well as requirements for collecting lodging and gross receipts taxes.
But Elizabeth is troubled by how proposed short-term rental rules might affect the unique arrangement at Campanilla Compound. One of the provisions would allow a “natural person” to hold only one short-term rental permit, among several other problematic restrictions.
“What would it mean for a quarter ownership to comply with these new ordinances?” she said.
If short-term rentals were no longer allowed at Campanilla, Mike said he would be disappointed. “I think folks need to experience Santa Fe in the way they want to experience Santa Fe,” he said. “There are a lot of beautiful hotels in Santa Fe that are out of reach for a lot of people. There’s plenty of camping, and you can bring trailers in, but I think what short-term rentals do is give you the experience of living in Santa Fe.”
Mike recently retired and spent much of his career traveling the world. “I’ve traveled most of my life, so I’ve stayed in a lot of hotels and there are benefits to hotels. But I think there’s a certain feeling about staying in a home in a city and being a part of the community.”
Elizabeth sees the need for a balance between Santa Fe residents and short-term rental businesses and the visitors they bring to the city. But she believes that the city should enforce the rules it already has on the books before passing more regulations targeting short-term rentals.
“That would be more beneficial to the community and the City of Santa Fe, rather than slapping down more ordinances that just make good businesses very difficult to run,” she said.
“It seems as though the city is making it difficult for the good guys to operate, and for people that weren’t going to pay lodging tax or get the permit numbers anyway, I’m not sure how these new ordinances would affect them. They’re not even complying with the first set of laws.”
Another proposed bill moving forward would make changes so that city could adopt civil penalty provisions and the ability to assess fines, with the aim of strengthening enforcement of short-term rental rules.
Campanilla Compound, Elizabeth said, is one of the good guys, following the rules, generating tax revenue for the city, and bringing in visitors who contribute to the community.
“They support the local restaurants, the festivals. These are the people that Santa Fe not only wants here, but needs here,” she said. “They’re responsible, cultured people who enjoy what Santa Fe has to offer.”
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