Los Angeles No. 1 in country for Airbnb, other short stay rentals
Study comes amid Airbnb crack down
Los Angeles ranks No. 1 in the country both in the number of short-term rentals and the proportion of short-term rentals compared to hotel rooms, a rapid rise that has come amid city legislation cracking down on Airbnb and other short stay platforms.
The numbers come from a fourth-quarter, 2019 snapshot that Los Angeles-headquartered CBRE Group Inc. took of the total number of active units on the websites of Airbnb and other short stay platforms including HomeAway and Sonder, among others.
Los Angeles County homeowners and renters actively subleased 23,413 units for short-term stays, a 9.0 percent leap from 2018, according to the study.
The sheer number of actively rented short stay units surpassed that of the New York City market, which CBRE tallied to have 20,972 units, a 1.8 percent nudge from quarter-four 2018.
Los Angeles (and New York, for that matter) has sought to curb short-term rentals, whose reputed ills include skewing local rental markets and thereby diminishing affordable housing, and causing safety (and nuisance) concerns for neighbors who never bargained on living by a rotating cast of travelers.
A Los Angeles city law went into effect on Oct. 31 after four years of legislative debate upped reporting requirements for those using Airbnb and other short stay platforms, and prohibited secondary residences and rent-controlled units being used as short-term rentals.
But the CBRE numbers follow a McGill University study from December that also found the legislation has no effect on a growing L.A. short-term rental market.
It is an ongoing question how the short-term rental economy’s increasing volume has impacted the hotel industry.
Of the 30 biggest U.S. hotel markets, Los Angeles has the largest proportion of short-term rental units compared to hotel rooms, 22.3 percent of the total 105,038 hotel rooms recorded in L.A. County.
By contrast, for every 100 hotel rooms in New York, there are about 17 short-term rental units.
CBRE notes that the Los Angeles hotel economy appears in okay shape, with a gradually climbing room rate, which was $180 at the end of 2018. However, the report cautions that Airbnb could make developers leery about building more L.A. hotels. Short-terms rentals have, “evolved from catering to the adventurous, millennial traveler to targeting core hotel guests like the business travel,” the reports notes.
This landmark change in consumer behavior has yet to firm up Airbnb’s bottom line. The company, which may opt to trade publicly this year, reportedly lost $322 million in the first three quarters of 2019 after making a $200 million profit in the initial three quarters of 2018.