City to Consider Airbnb Regulations

LOS ANGELES–A Los Angeles City Council committee that has been examining the hotly contested issue of how to regulate Airbnb and other short-term rentals is set to pick up the debate again today.

The Planning and Land Use Committee has been working on a proposed ordinance to regulate the short-term rental industry for over two-and-a-half years and is attempting to craft a policy that pleases both short-term rental hosts who say their livelihood depends on the practice and those who say it is contributing to the city’s housing shortage and impacting quality of life issues in some neighborhoods.

One of the central issues is how many days hosts may be limited to renting out their homes or parts of their homes. The committee is considering a proposed ordinance that would limit the number of rental days per host to 180 days a year.

The city does not have an ordinance regulating Airbnb, which connects travelers with hosts looking to rent out their home or a bedroom in their home, but struck a deal with the company in 2016 for it to pay hotel taxes on behalf of its hosts under a three-year agreement.

Los Angeles projects it could collect about $30 million annually from Airbnb in taxes, but the company has warned that capping rental days would significantly cut into that number.

The committee last met in October and asked city staff for a number of reports, including on the option of creating a surcharge fee of around $4 per rental per day to go into the Affordable Housing Trust Fund to aid the construction of affordable housing, and on the option of not having a cap on primary residences.

Councilman Paul Koretz is not on the committee but spoke before it in October and advocated a 90-day cap policy on rentals where it is not a primary residence of the renter, but said no cap would be necessary for a primary residence.

“If you are having commercial second homes, multiple homes, there are corporations buying up dozens of units and I think the place where it remains profitable for the mom and pops but not profitable for the giant corporations is around 90 days,” Koretz said.

A January 11th report from the Department of City Planning in response to the committee’s requests said that removing the cap for primary residences could result in the continued loss/conversion of about 1,500-2,500 units of housing per year to full time short-term rental activity, and a proliferation of short-term rentals and potential nuisance impacts in areas popular with tourists such as Venice, Hollywood and downtown.

The report also said that the establishment of a surcharge on hosts of short term rentals to go toward affordable housing would be limited by Proposition 26 and the California Mitigation Fee Act. The surcharge could be established under Proposition 26, but must go to the specific costs of administering the home-sharing program, otherwise voter approval would be required to enact the fee, according to the report.

Proposition 26 is a 2010 state ballot measure that says charges for government services must be linked to the cost of providing the service.

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