Los Angeles Cracks Down On Short-Term Vacation Rentals

Los Angeles city officials are proposing new rules as they contend with a housing shortage that activists blame partly on businesses that convert large swaths of apartments into short-term rentals, which can net more money per night.  The proposed plan would empower Los Angeles to fine homeowners for advertising illegal rentals as well as the sites that hosted the ads.

As it stands, short-term rentals are illegal in many residential areas of Los Angeles, but the city has struggled to enforce those rules as Airbnb, VRBO, and other websites have exploded in popularity, especially in tourist hot spots such as Venice and Hollywood.  Fans of these vacation rental sites say night-to-night rentals provide an economic lifeline for strapped Angelenos, some even claiming rental offerings have helped to make mortgage payments and avoid foreclosure.  Critics have largely focused their ire on commercial operators renting out a string of homes or apartments nonstop, not people offering a spare bedroom from time to time.  

After months research, the Department of City Planning released a draft ordinance regulating short-term rentals in Los Angeles that they hope will protect affordable housing while still allowing home-sharing.  Under the proposed regulations, registration of short-term rental units would be required.   Hosts would only be allowed to register their primary residence – defined as the place they live at lease six months of the year – as a short-term rental, and may rent their property for a maximum of 90 annually.  Hosts would not be able to register properties that are under affordable housing covenants or the city’s rent stabilization ordinance.  These short-term rentals would have to pay the same kind of lodging taxes as hotels, called Transient Occupancy Taxes, which would contribute to a city fund for affordable housing.  Registration would be made with the Department of City Planning, which would provide a registration number to be posted with the rental advertisement to show compliance.  Homeowners would also need to register with the Department of Finance to pay the Transient Occupancy Taxes.

Homeowners advertising short-term rentals without a registration number could be fined at least $200 daily, while the website could face fines of $500 a day.  Hosts who rent out a room or home beyond the 90-day maximum could be fined $2,000 per day.  Websites could be penalized $1,000 per day for refusing to turn over addresses of illegal rental units.

The plan drew praise from housing and labor advocates worried about how the rise of such rentals has affected housing availability.  They hope the plan will allow legitimate home-sharing without displacing rent-controlled tenants.

Airbnb and other companies have been reluctant to share data, arguing that doing so would violate the hosts’ privacy rights.  The LA Short-Term Rental Alliance, which represents hosts, predicted that privacy issues could lead to legal challenges from the likes of American Civil Liberties Union. 

Angelenos will be able to weigh in on the proposed rules at a hearing on Saturday, May 21st at 10:00am at the Deaton Auditorium (100 W 1st St, Los Angeles 90012).  The ordinance will then be considered by the City Planning Commission on June 23rd.