LA’s ordinance to limit short-term rentals clears major hurdle in City Council

After three years of debate, a City Council committee on Tuesday approved a measure to regulate Los Angeles’ enormous and currently illegal short-term rental business and its biggest player, Airbnb.

The bill, which still needs approval by the full City Council, would cap the number of days Angelenos can rent out their primary residence each year at 120. It would also create a means for “qualified hosts in good standing with the City” to exceed that cap. The committee originally drafted the ordinance with a 180 day limit, but lowered it last month.

L.A.’s proposed home sharing ordinance would actually legalize the business. All forms of short-term rentals are technically illegal in the city, but a complete ban is almost impossible to enforce, officials said.

There were more than 16,000 rooms and homes listed in L.A. for short-term rental on Airbnb alone last month. According to the bill, short-term rental hosts would need the approval of all neighbors within 100 feet to exceed the ordinance’s 120-day limit, or otherwise prove to the city that exceeding the limit would not adversely affect the neighborhood.

Airbnb has faced significant pushback from smaller cities in Los Angeles, including popular spots like Santa Monica and West Hollywood. Tuesday’s approval by the Council’s Planning and Land Use Management Committee clears the way for a vote by the full 15-member Council.

Airbnb Policy Manager John Choi called the passage a “step in the right direction” because the ordinance would legalize home sharing, but signaled that Airbnb will continue to lobby city leaders to affect the ultimate regulations heard by the Council.

“We don’t need a system riddled with unnecessary fees and red tape,” Choi said. “We look forward to working with city leaders to find a balanced approach to a home sharing policy for Los Angeles.”

The bill is meant to cut down on so-called “bad actors” who abuse the home sharing model, according to a spokesperson for Councilman Jose Huizar, who chairs the Planning and Land Use Management Committee. It was first introduced in 2015.

Critics of platforms like Airbnb have accused landlords of renting out multifamily properties as de-facto hotels at high rates, taking vital housing off the market.

The bill has its critics, too. Some say that renting out rooms and apartments online is the only way they can pay rent in an increasingly expensive city. Losing that business could have a significant impact on Airbnb’s bottom line, enough that the company spent at least $1.9 million lobbying elected officials in L.A. last year and funded numerous pro-home sharing groups around the country, according to the Wall Street Journal.

Huizar said the ordinance strikes a balance, allowing the city to “protect our housing supply, as well as the quality-of-life of our residents from bad operators, while ensuring the home sharing rental industry is fairly regulated and contributing to Los Angeles’ economy.”