L.A. takes step toward loosening rules on renting out homes for short stays

Worried about apartment buildings being run like hotels through websites like Airbnb and VRBO, Los Angeles leaders decided last year to ban people from renting out a home for short stays if it isn’t their main residence.

Now, just weeks after the city started enforcing those rules, L.A. is exploring whether to ease its ban and allow people to host travelers in second homes, which the city has dubbed “vacation rentals.”

The City Planning Commission, whose members are appointed by Mayor Eric Garcetti, voted 5 to 2 on Thursday to recommend passing a new law that would legalize and regulate vacation rentals.

Doing so has been a goal for Angelenos who host travelers in a second home or other property, many of whom lamented this fall that L.A.’s newly enforced rules were going to land them in financial hardship. But when the new proposal to regulate such rentals was first unveiled by the planning department, rental hosts complained it was practically a ban.

“These are people that are not bougie, yacht-owning billionaires…. We are tirelessly doing it to literally stay in our homes,” said Chani Krich, a rental host and one of the leaders of Homeshare Alliance Los Angeles, at Thursday’s meeting. If the proposed rules were not loosened, Krich said, “we will be added to the homeless crisis.”

Tenant activists, neighborhood groups and hotel workers worried about short-term rentals in turn were alarmed at the idea of loosening the rules, which were meant to prevent L.A. from hemorrhaging rental housing and to eliminate incentives for landlords to push out longtime tenants so they could make more money off tourists.

Many questioned why the city was pursuing the idea at all, arguing that it should instead focus on cracking down on hosts violating the existing law.

In the face of the housing and homelessness crisis, “it is absurd your commission is discussing a loophole for people lucky enough to own two houses,” said Liliana Hernandez, who works as a hotel housekeeper.

“People who live here need a first home,” said Matthew Berger, a Mid-City resident who testified against the proposal. “Why is the city giving a handout to people who have second homes?”

Under the proposed ordinance, Angelenos could host travelers in a property other than their own primary residence only if it is a home they own and live in occasionally.

They could host only one vacation rental each. And they could not offer up such rentals in granny flats, affordable housing, rent-stabilized units or apartments recently pulled from the rental market under the Ellis Act.

City officials have estimated that as of this spring, more than 7,800 units were being used in L.A. as vacation rentals. Planning officials had suggested that L.A. would permit up to 3,625 vacation rentals across the city, limit the number by building and geographic area, and set a 30-day annual cap on how often they could be rented to travelers.

In a divided vote, the planning commission backed a plan that loosened some of those proposed rules, recommending that the city allow around 14,500 vacation rentals across the city and permit each of them to be rented out for as many as 90 days a year. The Los Angeles Vacation Home Rental Alliance called the revised proposal “a good start.”

Two commissioners — Karen E. Mack and Dana Perlman — balked at the plan.

Perlman said he didn’t understand why the city would take any step that would allow more units that could be permanent homes for Angelenos to be run as night-to-night rentals. Other commissioners countered that such rentals were a long-standing and legitimate part of the economy.

“I don’t want to penalize or punish ways that people are making a living by restricting things too tightly,” said Caroline Choe, one of the commissioners who voted for the proposed rules.

The proposal now heads to the Los Angeles City Council, where it is likely to spur more debate: Representatives of three council members — Mike Bonin, Paul Koretz and Monica Rodriguez — came to Thursday’s meeting to oppose it. Rodriguez planning deputy Paola Bassignana said the proposal “reopens the loophole we just spent years closing.”

The debate at City Hall has revolved chiefly around how such rentals affect the housing market. Planning officials said they had recommended a 30-day cap on vacation rentals after calculating that renting an L.A. unit for short stays would reap as much in roughly 77 days, on average, as leasing it all year to an ordinary tenant.

The goal, senior planner Phyllis Nathanson said, was to set the number “well below” the point at which people would have a financial incentive to convert housing units into short-term rentals.

Commission President Samantha Millman said that she was nonetheless comfortable with setting a higher limit of 90 nights because the requirement that such rentals be only in homes that are used at least part time by their owners means “they are units that would never be on the traditional market anyway.”

Airbnb has argued that the tipping point is much higher.

Critics contend that permitting vacation rentals would make it harder to enforce the existing rules on renting out homes for short stays.

Before the Thursday meeting, a coalition that includes tenant activists and hotel workers held a news conference lamenting that illegal listings had persisted on platforms such as Airbnb despite the new rules.

The coalition cited an analysis by a McGill University researcher that found that listings he deemed likely to violate the city rules — including entire homes being rented out most of the year — had fallen only from 10,800 to 7,935 from mid-October to early December. Based on that analysis, there has been “more or less no progress on targeting commercial operators,” said McGill assistant professor of urban planning David Wachsmuth.

The report was funded by Hadsell Stormer Renick & Dai, a law firm that lodged a complaint with the city Thursday on behalf of a Miracle Mile resident, citing more than a dozen listings believed to be in violation of city rules. An Airbnb spokeswoman, reacting to the report, said it relied on “cherry-picked analysis.”

Los Angeles City Planning Department spokesman Yeghig Keshishian said the city had sent out two rounds of warning letters since it began enforcing the rules in November and would start issuing citations in January.

Keshishian said that the overall drop in the number of such rentals was “a testament to the city’s efforts to enforce the rules.”