UPDATE, JUNE 23, 6:51 P.M.: In a 5-4 vote, the Planning Commission today approved the short-term rental regulations, with a few notable exemptions. The cap was raised from 120 days to 180 days, which means that Angelenos would be able to rent their primary residences for nearly half the year. The commission also added a clause allowing people to rent out their secondary residences for up to 15 days of the year.
The ordinance now goes to City Council, where it likely will see further changes. The story below originally was published June 22.
Los Angeles is about to put the “short” back into short-term rentals.
Fun fact: Airbnb and other methods of home sharing are illegal in Los Angeles. Anytime someone rents out a unit for less than 30 days, unless that unit is zoned to be used as a hotel or bed and breakfast, they are committing a crime.
Of course, thousands of Angelenos are committing that crime every day. According to the website Inside Airbnb, which collects data on the popular home-sharing site, there are more than 20,000 listings on Airbnb inside the city of Los Angeles.
That's all about to change, as City Council is poised to enact a law that both legalizes and regulates short-term rentals. That's sort of good news for Airbnb. But it's also sort of bad news — the proposed regulations are rather strict.
The current draft of the ordinance, which goes before the City Planning Commission on Thursday, would limit which homes can be rented out on a short-term basis and for how long. If the law passes as currently written:
• People could only rent out, on a short-term basis, their primary residence or rooms within that home, and only for a maximum of 120 days per year. No back houses, second units, vacation homes, etc.
• Renters would have to obtain landlords' permission before short-term subleasing.
• No renter with a rent-stabilized unit could rent out their unit on a short-term basis.
• Anyone who wants to rent their home on a short-term basis would have to register with the city, pay a registration fee and pay both a business tax and a “bed tax” (which all hotels are subject to). Sites like Airbnb would be forced to ask would-be renters for their registration number.
According to Inside Airbnb, about 45 percent of Airbnb hosts in L.A. have multiple listings, which would be illegal under the new ordinance.
The ordinance is still very much a work in progress and is likely to be amended by either the Planning Commission or the full City Council. The law, however, is expected to be approved by both bodies.
Critics of home sharing say the practice takes thousands of homes and apartments off the market, inflating rents.
“We’re in the middle of an extreme housing crisis right now,” says Larry Gross, executive director of the Coalition for Economic Survival. “Airbnb is one of the biggest culprits that makes our housing crisis even worse.”
Despite the proposed ordinance being fairly strict, some Airbnb opponents are hoping for something even stronger. An earlier version of the ordinance had short-term listings capped at 90 days; it was recently amended to 120 and could change again on Thursday.
“A 120-day cap means rentals in some neighborhoods every single weekend,” says Judith Goldman, co-founder of Keep Neighborhoods First. “It is simply too high.”
Others question the need for such a cap.
“I have a friend who’s 81 and rents out an extra room, and it has completely transformed her life,” says Heather Carson, who's co-chair of the Silver Lake Neighborhood Council but is speaking as an individual and not for the council. “So I don’t understand the 120 days. If it’s your home and you're renting a room, I don’t think there should be a limit.”
Airbnb is open to some type of regulation but is opposed to the current proposal, especially the 120-day limit. According to its press release:
Airbnb expands the economic pie for residents of Los Angeles. In 2015, the typical Airbnb host in Los Angeles earned $7,000 from hosting. This income is an economic lifeline for everyday people in L.A. that are looking to make ends meet. In a survey of Airbnb hosts in Los Angeles, 13% said that their income from hosting has prevented them from losing their home to foreclosure. And another 10% of hosts said that their income from hosting has saved them from losing their home to eviction. At that rate, nearly 3,000 Los Angeles hosts have avoided foreclosure or eviction and kept their home due to the supplemental income they make from hosting on Airbnb.
Airbnb also claims it has generated $670 million in economic activity for the city of Los Angeles.
What's clear is that Airbnb affects different neighborhoods differently. A vast majority of short-term rentals are concentrated in neighborhoods such as downtown, Silver Lake and, above all, Venice. According to the Planning Commission staff's report, “Venice (an area with about 21,000 homes) had approximately 1,500 short-term rental listings available, meaning almost one in 15 homes there is available for short-term rental.”
On Monday, the city attorney filed criminal charges against the owners of two apartment buildings (one in Venice, the other in Hollywood) who allegedly evicted all their tenants and listed every unit on Airbnb.