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Planning Commission backs LA's first regulations on Airbnb

Airbnb, the online home-rental service, says it will start collecting hotel taxes in a few American cities.
Airbnb, the online home-rental service, says it will start collecting hotel taxes in a few American cities.
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Before a packed house Wednesday, the Los Angeles City Planning Commission approved a proposal to regulate the short-term rental industry by limiting the number of days properties can be rented each year.

The ordinance could become the city's first set of regulations on an industry that has grown dramatically as sites like Airbnb and HomeAway have become household names. If passed by the city council, a resident's primary residence could be used as a short-term rental for a maximum of 180 days per year. Owners would also be required to register and pay Transient Occupancy Taxes to the city. 

But it's unclear how any future regulations could be enforced. Airbnb and other online rental platforms keep the addresses of their listings confidential, making it difficult for city enforcement officers to identify and fine people who would potentially break the law.

In Wednesday's meeting, city officials said they would need rental sites like Airbnb to disclose the addresses of their hosts, something the online rental platforms have long resisted. Their spokespeople reiterated that stance in the commission meeting Wednesday. 

"One of the fundamental principles for us is protecting our hosts' privacy. Our hosts have made it clear to us that they don't feel their information should be made public," said John Choi, Southern California policy manager for Airbnb.

The commission also discussed whether they could rely on individual hosts to cooperate with the city, by paying taxes and self-reporting the number of days they rent out their properties.

Cities throughout the U.S. have wrestled with if and how to regulate the short-term rental industry over the past couple of years. Some cities have forgone regulations and instead worked to collect Transient Occupancy Tax on short-term rentals. Other cities, like Santa Monica have passed bans on most short-term rentals in an attempt to preserve housing for their locals and keep rents stable.

For more than a year, L.A. lawmakers have debated the issue, and taken public feedback. While some residents complain that short-term rentals create noise and disruption in their neighborhoods, others say renting their properties is a vital source of their income.

So many people attended Wednesday's commission meeting that City Council Chambers reached capacity, forcing officials to open an overflow room for attendees. Commission members heard an hour and a half of testimony from many people connected to the short-term rental industry.

Vanessa Johnson has rented her property full-time for four years. She told the commission that her income would be drastically reduced if the city restricted her to renting it for only part of the year. 

“This has been a lifesaver for me,” Johnson said. Renting out her home short term generates 60 percent of her livable income, she said. “This has given me an identity and a job in my later life.”

Johnson told KPCC that she’s not opposed to some parts of the proposed regulations, like the Transient Occupancy Tax. “I’ve been paying that tax since day one,” she said, “And I rent my house out 365 days a year.”

Housing advocates and low-income renters told the commission they support the proposed ordinance’s property restrictions. Cynthia Strathmann, executive director of Strategic Actions for a Just Economy (SAJE), said that she’s seen landlords evict longterm tenants in order to turn their properties into short-term rental properties, with little to no consequences.

Neil Budde said he was evicted from his rent-stabilized apartment two and a half years ago. His landlord then occupied that unit, and listed another unit in the building for short term rental. Budde said he couch surfed for 5 months after discovering a 240 percent rent increase in his neighborhood. 

“Our neighborhood was very close knit,” he said. “What’s happening with short term rentals and some of these landlords is that they’re forcing out viable members of the community.” He said he is one of 13 neighbors in a five-block radius who have been evicted to make way for short term units.

Speakers often turned back to the question of regulation, with stakeholders on all sides mentioning repeatedly that cities across the country have struggled with enforcement and regulation because the sites keep property addresses confidential. 

A proposed state bill would have changed that. It failed last June after intense opposition from Airbnb, who, among other groups, argued it violated the privacy of its users.

“To have a city government ask for information without any legal justification is really concerning to us,” Lauren Kimzey of the Internet Association said. “As of yesterday Chicago tried to pass a data sharing provision [as part of a similar regulatory ordinance],” she said. “But it was taken out because of the impact it would have on user and consumer privacy protection.”

Kimzey said Expedia, which owns VRBO and HomeAway, is in the very early stages of proposing a different mode of data gathering. “They’re discussing turning over anonymized data. Just metadata, so they can get the data they want— number of nights and properties— but no identifiable information.”

A correction was made to an earlier version of this story to clarify Budde's experience.