A judge has upheld Santa Fe's right to have an ordinance regulating short-term rentals in the city's neighborhoods. However, a recent ruling by state District Judge Valerie Huling of Albuquerque also orders the city to revisit the fees it charges for short-term rental permits.

Huling's decision partially affirms and partially denies claims made against the city by a group of rental property owners who said new 2008 rules were arbitrary, capricious and unlawful.

City Attorney Frank Katz told city councilors on Wednesday that the governing body should soon resume work on the issue.

"My hope is that now we have much more experience with how much the regulation has cost, and we will be able to bring it back to the council and adjust the fee to the appropriate amount," he said.

The city charged $1,000 each for each permits issued last year, which likely raised more cash than it needs to administer the program.

Staunch opposition to the regulations came from property owners and property management companies. But neighborhood activists pushed for city regulation of the short-term rental industry, which is pervasive in older residential areas.

Attorney Tom Simons, who represented plaintiffs Kokopelli Property Management, The Management Group and other individuals, said there are still unresolved issues that he is likely to ask the court to consider, such as whether those who have already paid the fee would get some kind of relief.

"This is a significant decision in our favor as to what we considered to be the exorbitant amount of fees that were charged for short-term rentals," he said late Wednesday, noting that the judge's denial of the other claims wasn't good news for his clients.

Contact Julie Ann Grimm at 986-3017 or jgrimm@sfnewmexican.com.