Is Airbnb Making L.A.'s Housing Crisis Worse?

A new paper published in the Harvard Law and Policy Review argues that short-term rentals, like the kind on offer at Airbnb, are exacerbating L.A.'s housing crisis. The paper's author, graduate student Dayne Lee, found that Airbnb "decreases the supply of housing and spurs displacement, gentrification and segregation."

Recent studies have said that L.A. is the least affordable city in the country for buying a home and has the ninth highest rents. Most people agree that the problem stems from demand for housing outstripping supply. And Airbnb, Lee argues, is making a bad situation worse.

One study (by LAANE, a union-funded advocacy group) cited in the paper suggested that short-term rentals in Venice Beach were hogging 12.5 percent of the market. The paper also points out that Airbnb listings "are concentrated in just seven of the city’s densest, most expensive neighborhoods: Venice, downtown, Miracle Mile, Hollywood, Hollywood Hills, Echo Park and Silver Lake" — and that in 2014 "rents in these neighborhoods were 20 percent higher, and increased 33 percent faster, than rents citywide."

According to Larry Gross of the Coalition of Economic Survival, many of the units that are taken off the market and turned into short-term rentals had been "rent stabilized," which generally would have made them more affordable.

"If we’re talking about how to address our housing crisis, it’s not enough to say we’re going to build affordable housing," Gross says. "We need to preserve our existing affordable housing."

Airbnb spokeswoman Alison Schumer emphatically rejects the notion that Airbnb meaningfully reduces the housing supply, writing in a statement: "Opponents have asserted that Airbnb is removing ‘thousands of housing units’ from the rental market, a statement that is both baseless and mathematically impossible."

She says that outside studies are based on "data scrapes," which are inherently unreliable. Roy Samaan, who studies Airbnb for LAANE, agrees the data scrapes are less than perfect — but that Airbnb won't release the real data, so the scrapes offer the best available estimates.

According to both Schumer and the website Inside Airbnb, only 20 percent of the "whole home" listings in Los Angeles are rented out for more than a quarter of a year. That would amount to a loss of roughly 4,000 units. Gross and Samaan argue that the number is much higher — between 7,000 and 10,000 units.

"By anyone’s standard, there are probably 11 units a day that are being converted into short-term rentals," says Judy Goldman, a Venice resident and co-founder of Keep Neighborhoods First, one of the organizations fighting Airbnb. "It’s turned neighbors against neighbors."

In December, five tenants sued Airbnb, alleging they'd been illegally evicted from their apartments in the Fairfax district so that the units could be rented out on Airbnb. 

It's not entirely clear if it's legal to evict a tenant in order to convert the apartment to an Airbnb rental. The Ellis Act allows for such evictions if the apartment is being taken off the market. Is Airbnb part of the normal rental market? Or is it some other thing? 

In fact, short-term rentals are technically illegal but generally accepted in the city. They're also unregulated and untaxed — unlike regular hotels, which are subject to a 14 percent occupancy tax.

L.A. City Councilman Mike Bonin introduced a motion in June 2015 to ban all short-term rentals except for those that are the landlord's primary residence. That way, you could still rent out your couch or spare bedroom on Airbnb, or even your whole house when you go on vacation, but landlords couldn't put whole units or even whole buildings on the site. 

But the ordinance has been moving at a slow pace. It's supposed to go before the planning commission sometime in the summer — about a year after it was first introduced. 

"I don’t know what the holdup is," says Becky Dennison of Venice Community Housing, an affordable housing developer and advocacy group. "The problem with the City Council is they’re just not making any of these affordable-housing issues important. I just don’t think there's the political will to do anything real yet."


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