Airbnb in negotiations with Los Angeles over collecting occupancy taxes

File photo: The rental site is collecting occupancy tax in many cities, and says it's negotiating with L.A., where housing advocates complain apartments are being converted into short-term rentals.
File photo: The rental site is collecting occupancy tax in many cities, and says it's negotiating with L.A., where housing advocates complain apartments are being converted into short-term rentals.
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A spokesman for Airbnb said the company is in negotiations with the city of Los Angeles over collecting occupancy taxes for short-term rentals.

The statement comes as the city — dubbed the least affordable in America — struggles with how to regulate the short-term rental industry, which has grown dramatically, as affordable housing for residents has remained flat.

Many on the city council say Los Angeles should be receiving tax revenue from these vacation rentals, and that more regulations are needed to curb large concentrations of vacation rentals in some neighborhoods, like Silverlake. The issue came up in a forum Monday night for candidates for council district 4, which includes Silverlake.

"We are committed to working with Los Angeles policy makers to develop simple and fair regulations that help Angelenos share their homes while contributing to the community," Christopher Nulty, the company's public affairs manager, said in a written statement.

Los Angeles's hotel occupancy tax is 14 percent of the nightly rate.

Nulty said the popular short-term rental app has already reached agreements to collect occupancy taxes from customers who rent in six cities: San Francisco, Portland, San Jose, Washington D.C., Chicago and Amsterdam. The site passes that tax revenue to those cities.

The city of Los Angeles has sent letters to some property owners who rent their homes on Airbnb, reminding them they should pay tax. But it's unclear how many do.

Some who use the site told KPCC they shouldn't have to.

"It's just another form of control and robbery to tax people for renting what they already own and pay taxes on," said Taylor, who rents out a room in Silver Lake and isn't currently paying the tax, so asked to only be identified by a first name.

"Let's get it over with: add the tax, autopay the city, and move on with our lives," Taylor added. "I only hope someone on the council will consider the little guy not running a hotel-like situation. Owner occupied or single rental property ownership should pay less tax."

Jeff, who rents out his Silver Lake home when he travels and also asked to be identified by his first name, said paying taxes puts a wet blanket on the whole idea of short term rentals.

"I think Los Angeles and the state of California tax people enough," he said. "I don't know exactly how much it will deter people, but it doesn't make me happy to know that there will be a tax that will cost more money on both sides of it."

But others were more conflicted.

"The city clearly needs money, and personally I'm not that resistant to the idea of the tax," said Spencer, who rents out a home on the westside and, again, did not wish his last name to be published because he doesn't voluntarily charge and pay occupancy taxes to the city.

"There is a bit of a philosophical conflict for me in terms of not paying that," he said.

L.A. City Councilman Mike Bonin, who chairs the city council's transportation committee, said other regulations are also needed with regards to short-term rentals.

He and others say some landlords have found it more profitable to be in the vacation-rental business, so they're using the state's Ellis Act to evict tenants in rent controlled units saying they're going "out of business," then resurrect the building solely for vacation rentals.

Bonin said these "de facto" hotels are "significantly impacting our inventory of affordable housing - which is a crisis in Los Angeles to begin with - and we can’t allow it to get any worse."

He said the conversions have pushed middle-class residents out and is changing the character of some neighborhoods.

Officials in other cities, such as San Francisco, have raised similar concerns about landlords using the Ellis Act loophole to cut off rent-controlled units.

Airbnb said it opposes it.

"Airbnb supports legislation that would remove any incentive for a speculator to abuse the Ellis Act to convert housing intended for permanent residents into short-term rentals in Los Angeles," Nulty said in a statement.

Bonin authored a motion, which passed in December, to explore regulations on Airbnb. That work is still underway, and he said new regulations are not likely to come up for a vote for several months.

Another fix might include a zoning change for short-term rentals, he said.

"I'm not sure which neighborhoods or zoned areas should permit (short-term rentals) or not," he said. "But I certainly think we need to do something about an over concentration of units becoming short-term rentals."

This story has been updated.