Why Are Airbnb Regulations Taking So Long in L.A.?

In the summer of 2015, the Los Angeles City Council rolled up its collective sleeves and began crafting an ordinance to regulate short-term rentals, a market dominated by Airbnb. Two years later, the bill is still being kicked around in the council's Planning and Land Use Management Committee and remains very much a work in progress.

So, uh, what's taking so long?

"This is very complicated," says Councilman Mitchell Englander, who sits on the council's Planning Committee. "It's uncharted territory for L.A. We’ve never regulated short-term rentals like we have now. We want to make sure we get it right."

As to when he expects to have a bill to vote on: "I think we’re close. I think the end is near. Possibly the end of the year, or the beginning of next year."

Critics of the short-term rental market include hotel owners and employees, who see Airbnb as unfair competition; homeowners annoyed that their neighbors have been replaced by a rotating cast of itinerant tourists and, in some cases, party animals; and housing advocates, who say that the Airbnb craze has taken thousands of rental units off the market, exacerbating L.A.'s housing shortage.

"We’re losing something like 5,000 units a year to the short-term rental market," says Cynthia Strathmann, executive director of Strategic Actions for a Just Economy. "I’m just really exasperated at the role the short-term rental market is playing in the housing crisis and the lack of movement to regulate it in an appropriate way."

Airbnb spokeswoman Connie Llanos (formerly the spokeswoman for one Mayor Eric Garcetti) says short-term rentals have had a "minimal impact" on L.A.'s housing market. She notes that according to Airbnb data, the number of entire homes available for rent most of the year amounts to just .18 percent of the city's housing units.

But short-term rentals affect different neighborhoods differently. According to a 2015 study by the Los Angeles Alliance for a New Economy, there were 1,137 Airbnb listings in Venice Beach alone, amounting to what the study called "as many as 12.5 percent of all housing units" in the seaside neighborhood. (Airbnb claims the report relies on "inaccurate data.") Indeed, stroll through a random residential street in Venice and you'll notice a plethora of number-pads next to doorknobs, the unmistakable calling card of an Airbnb rental.

Renting a room or apartment for fewer than 30 days is technically illegal in the city of Los Angeles. It's a rule that is hardly ever enforced and was a non-issue until Airbnb burst onto the scene, providing tourists cheap places to stay and homeowners an opportunity to make a little extra cash.

In July of 2016, Airbnb and the city of L.A. signed a deal in which the platform agreed to collect a 14 percent transit occupancy tax — the same kind levied on hotel guests — from its users.

But City Council has continued to struggle to find the right balance between Airbnb's dedicated users and its ardent critics.

"There’s a lot of stakeholders," Councilman Englander says. "Some people don’t want any in their neighborhoods, and some people need it to make their mortgage payment. ... There’s definitely an impact on the housing market. To what degree, I don’t know. If you read five different studies you get six different answers."

Under the current draft of the ordinance, short-term rentals would be limited to a host's primary residence. Renting out a second home or half an apartment building or anything like that would be forbidden. And even renting out a primary residence (which includes a back house or accessory dwelling unit) would be limited to 180 days out of the year.

The 180-day limit appears to be the biggest bone of contention. Keep Neighborhoods First, a group that's been fighting Airbnbs, is pushing for a 60-day cap. Its members argue that the 180-day cap would still allow hosts to rent out their homes on every weekend and all throughout the summer — and then some. They say a 180-day limit wouldn't be enough of an incentive to put the homes back onto the long-term rental market.

Airbnb, meanwhile, is pushing for no such cap.

"We really believe that if someone is sharing the home they live in, they should be able to do that as many days as they want," Llanos says.

Since the beginning of 2015, Airbnb has spent $617,500 lobbying the city, according to the city ethics commission website. But its power to influence legislation goes beyond that. Airbnb has filed lawsuits against a number of cities that have passed short-term rental regulations, including New York, Santa Monica and its hometown of San Francisco.

"We have been looking at what’s worked and what’s failed in other cities, what’s been legally challenged and what’s been upheld," Englander says.

Says Llanos: "We are at the table. We are here to work with the city to create the best possible policy. Legal action is not our preferred course of action."

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