Airbnb Hosts Could Owe L.A. Taxpayers Millions of Dollars, Study Suggests

Venice canals
Venice canals

Are Airbnb hosts taking you, the L.A. taxpayer, for a ride?

A recent study by the Pennsylvania State University School of Hospitality Management says Yes. It says that by operating outside the city's 14 percent hotel tax structure, Airbnb hosts are robbing us of millions of dollars.

Ouch. This is a city, after all, that's having trouble filling potholes and fixing sidewalks.

Pennsylvania State researchers found that if Airbnb hosts paid hotel taxes in the Greater L.A. region, they'd be worth $41 million a year.

The study found that hosts who listed properties every single day of the year accounted for nearly one-third (30 percent) of Airbnb revenue in the city of Los Angeles — $80 million worth.

More than one out of five hosts (22 percent) had their homes available for half the year, accounting for 70 percent of L.A. Airbnb revenue (more than $180 million), the study says.

"The overwhelming majority of Airbnb’s L.A. revenue comes from hosts renting units 30 days or more," a summary says. "Eighty-four percent of operators listed properties for rent more than 30 days per year, accounting for more than $250 million or 98 percent of Airbnb’s L.A. revenue."

The study found that the ZIP code with the most Airbnb units up for stays was 90291 — Venice. "This ZIP code’s nearly 1,100 operators earned almost $33 million in one year alone," the summary says.

Not coincidentally, the city councilman who represents the area has proposed banning Airbnb rentals by hosts who don't actually live at the addresses being listed. He also would subject Airbnb stays to the hotel tax.

"In Los Angeles, a greater percentage of Airbnb’s revenue is tied to hosts who run unregulated — and often illegal — hotel businesses, listing one or more residential units for rent in the same metropolitan area to short-term visitors for a large portion of the year, if not the entire year," said the study's director, John O’Neill, head of the Center for Hospitality Real Estate Strategy at Pennsylvania State University. "The growth of these commercial operators in the Los Angeles area is even more acute because they continue to expand into additional neighborhoods, from Venice Beach all the way to Hollywood Hills."

The Travel Technology Association, a trade group that represents Airbnb, points out that the study was commissioned by a hotel owners' collective, the American Hotel & Lodging Association (AH&LA), a fact that the study's summary points out immediately.

The technology association argued that the study includes tainted and massaged numbers.

"AH&LA continues to make misleading claims with respect to short-term rentals, overtly manipulating data in order to tell a partial story," said Matt Kiessling, leader of short-term rental policy for the group. 

He said short-term rentals of the type listed at Airbnb are "creating new economic opportunities throughout California."

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