The Real Deal Los Angeles

City of LA sues landlords for operating illegal hotels on Airbnb

City Attorney Mike Feuer is going after landlords that evict tenants in order to make profit off short-term rentals

June 21, 2016 09:30AM

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Mike Feuer Airbnb Illegal hotel

City Attorney Mike Feuer and 500 North Genesee Avenue (credit: L.A. City Attorney, Google Earth)

The Los Angeles city attorney’s office has filed charges against the owners of four buildings, alleging that they unlawfully offered units for short-term rental on Airbnb after evicting long-term tenants.

The move is intended to send a message to other landlords violating rent control laws amid an affordability crisis in L.A., officials told the L.A. Times. 

City Attorney Mike Feuer said at a news conference Monday that his office has made it a priority to investigate other illegal short-term rentals in operation.

In addition to the lawsuits, criminal charges were brought against one of the landlords, Carol Alsman and LSJB Investments LLC, the owners of a Fairfax district four-unit building. After evicting tenants, they allegedly rented the units for more than $550 a night through Airbnb, according to the complaint. They were charged with six misdemeanor counts of violating rent control and zoning laws.

Under the Ellis Act, landlords of rent controlled apartments can evict their tenants only if they intend to take the units off the market. After doing so, they pay tenant relocation fees and notify them when the units are brought back onto the market.

“Obviously there is a great profit to be made if you could, on your whim, change your apartment unit into a nightly hotel rental,” Feuer said.

Three evicted tenants of the Fairfax building at 500 North Genesee Avenue sued the landlords last year in a civil suit.

Feuer’s office also sued the owners of three other rent controlled buildings for illegally operating them as de facto hotels. Two of the properties are located in Venice on Ocean Front Walk and the other is in Hollywood on North Van Ness Avenue.

An earlier analysis found that more than 1,000 rent-controlled apartments in L.A. were removed from the market in 2015 — nearly three times as many as there were in 2013. Evictions from these units doubled over the same time.

The City Council is now considering regulations that would curtail the abuse of platforms like Airbnb by imposing rental limits and fines.

Airbnb “strongly opposes real estate speculators who illegally evict tenants and abuse platforms like ours in search of a quick buck,” Airbnb spokeswoman Alison Schumer told the Times in a statement.

The city attorney’s office said it will send Airbnb a list of other properties that have evicted tenants under the Ellis Act to prevent them from becoming de facto hotels. [LAT]Cathaleen Chen