Airbnb reached a settlement with Santa Monica Tuesday to collect money from renters for affordable housing in the city and ensure compliance with strict short-term rental rules, a newspaper reported.

A federal appeals court in March unanimously rejected Airbnb’s challenge of Santa Monica’s 2015 home-sharing ordinance, which prohibits short-term rentals if the owner is not on the premises. City officials adopted the ordinance after receiving complaints of disturbances in normally quiet residential neighborhoods.

Airbnb will now require all listings to have a license number issued by the city, the Los Angeles Times reported. The company will permit each host to list only one dwelling and no more than two rooms in that home. Airbnb also will collect $2 a night from renters and pass it on to the city to be used for affordable housing. The company charges similar fees in other cities.

City Attorney Lane Dilg said the agreement would ease enforcement of the ordinance and help preserve housing.

Santa Monica has 351 registered home-shares, most of them rented through Airbnb. In addition to requiring hosts to remain on the premises, the city limits rentals to fewer than 31 days.

Santa Monica Mayor Kevin McKeown said the agreement would “better protect real permanent homes, especially our affordable rent-controlled apartments, from being used as de facto hotel rooms,” The Times reported.

The settlement requires Airbnb to take down illegal listings when notified by the city. The agreement is effective immediately and is expected to be fully implemented by the end of January 2020.

“After years of uncertainty for our host community in Santa Monica, the new settlement agreement provides our hosts the clarity they need to continue sharing their homes,” said Matt Middlebrook, Airbnb’s public policy chief for California.

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