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The Real Deal Los Angeles

City committee unanimously backs short-term rental law

But rent-controlled units once again prohibited from home sharing sites
By Gregory Cornfield | November 07, 2018 03:00PM

Councilman Paul Koretz and Councilman Jose Huizar with LA City Hall

The struggle to legalize short-term rentals in Los Angeles moved one step closer this week. But a ban on the use of rent-controlled units by sites like Airbnb is back on the table.

At a meeting late Tuesday, a City Council’s Planning and Land Use Management committee unanimously approved a framework to legalize short-term rentals, but not before altering recent changes related to rent-controlled apartments.

The committee reinstated part of an earlier draft ordinance that prohibited rent-stabilized units from using short-term rental platforms like Airbnb. Lawmakers first approved the ban to reduce the incentive for landlords to convert apartment buildings into illegal short-term rental buildings.

That ban would have restricted 85 percent of the city’s rental stock that falls under the Rent Stabilization Ordinance (RSO) from using home-sharing sites.

Mayor Eric Garcetti and the Planning Commission changed the ordinance to allow home sharing in RSO units because they said it was unfair to exclude lower-income people from the home sharing economy, the Los Angeles Times reported.

“I think their mistake was to open this up to RSO units,” Councilman Paul Koretz, who is not a member of the PLUM committee, said at the meeting Tuesday. “We can’t ensure it won’t be abused, and we’ll lose more units to full-time home-sharing hosts.”

Koretz said the city estimates that Los Angeles already lost up to 10,000 RSO units from the market due to illegal conversions into “de-facto hotels.”

A representative from Councilman Mike Bonin’s office, whose district includes Venice – one of the most popular areas for short-term rentals – also urged the committee to return to the original approach that was approved before it was changed by the Planning Commission.

The committee on Tuesday also eliminated a study on a fee system for host registration, and they reduced the fee from $1,100 to $850 for those requesting to host beyond the 120-day limit.

If the ordinance is finally approved by the full Council, the guidelines would effectively legalize short-term rentals, but greatly limit the way it’s used now, especially for those who rent out space for the entire year.

The effort to regulate platforms like Airbnb in Los Angeles has faced persistent opposition since it started more than three years ago. Hosts have said they were being punished with tight regulations because of the ‘bad apples” who abuse the system and convert apartments into the illegal short-term rentals.

Others have argued home sharing is a source of income that allows them to make ends meet. They contest hosts should be allowed to rent short-term for more than the proposed 120 days per year.

In West Hollywood, their enforcements appear to have helped cut down on illegal short-term rentals. A new report there showed listings between May 2017 and October 2018 shrank 4 percent.

The only other city to have experienced a decline in short-term listings was Santa Monica, where strict laws and lawsuits have also worked to control the phenomenon. The drop there was 29 percent.