Here’s the short-term rental dilemma: Websites like Airbnb and VRBO have made vacation rentals and house-sharing incredibly popular by making it easier for travelers to find homey, affordable lodgings and for homeowners to earn extra money by renting out all or part of their dwellings. But short-term rentals are not only illegal in Los Angeles’ residential communities, they can create nuisances in neighborhoods and take much-needed housing off the market.
Cities in the U.S. and abroad have struggled to manage the resulting boom in short-term rentals. Some cities, such as Hermosa Beach and Ojai, have decided to ban short-term vacation rentals (those less than 30 days) altogether. Mayor Eric Garcetti and members of the City Council have rightfully recognized that the “sharing economy” offers real benefits to residents and the city. That’s why L.A. is following the lead of Santa Monica, San Francisco and other big cities that have attempted to legalize and control short-term rentals. So far, however, those cities have found it’s easy to adopt regulations on short-term rentals; it’s far more difficult to actually enforce them.
Hosts would have to register with the city, display a valid registration number on their advertisement and pay L.A.’s 14% hotel tax.
On Thursday, the Los Angeles Planning Commission will consider a proposed “Home-Sharing Ordinance” that seeks to set the rules and tries to fix the enforcement problem. The law would dramatically scale back the number of short-term rentals in the city — currently estimated at 20,000 active listings — and give authorities more power to penalize both the hosts and the websites that violate the new rules.
The law would only allow people to rent out their primary residence, and for no more than 90 days a year. Hosts would have to register with the city, display a valid registration number on their advertisement and pay L.A.’s 14% hotel tax, which could generate millions of dollars a year for the city. The ordinance would bar short-term rentals of second homes or investment properties, as well as apartments covered by the city’s rent-stabilization law. This is to discourage property owners from turning long-term rentals into short-term rentals, which can change the character of a community, tighten the housing supply and make neighborhoods less stable. Yes, limiting home sharing to primary residences will remove an option for people who have vacation homes and for real estate investors. It will also probably diminish the availability and affordability of temporary rentals. Still, this is a necessary trade-off in a city with too few apartments and too high rents.
The Times Editorial Board has shared those concerns in the past, noting that, in general, government shouldn’t force private companies to monitor customer behavior on its behalf. Yet there is no escaping the fact that cities cannot effectively regulate short-term rentals without a measure of cooperation from the booking websites. At the moment, these websites are facilitating illegal transactions; short-term rentals are against the law in L.A. If the city is going to legalize home sharing and allow this new branch of the hospitality industry to grow — bringing great financial benefits to Airbnb and other booking websites — then these companies must recognize and embrace their role in carrying out the new regulations.