Business & Economy

Airbnb injected $312M into LA economy last year, company says

Airbnb, the online home-rental service, has released a new report claiming it injected $312 million into the Los Angeles economy.
Airbnb, the online home-rental service, has released a new report claiming it injected $312 million into the Los Angeles economy.
Chris Weeks/Getty Images

Airbnb, the home-sharing company that has become the focus of intense scrutiny even as it grows in popularity, has released a study claiming that it contributed $312 million in economic activity to Los Angeles in one year and supported 2,600 jobs.

"Airbnb creates a significant positive economic impact in Los Angeles by dispersing guest spending across neighborhoods and households throughout the city," said Bill Lee, Senior Partner at Land Econ Group, in a statement Thursday. "Many hosts are aspiring stars in the entertainment industry, and the additional income from Airbnb is what allows them to keep their L.A. dreams alive."

Here are some key findings from the report:

The study comes on the heels of a motion from the Los Angeles City Council to come up with new regulations for short-term rentals, asking analysts and lawyers to investigate what's being done in other cities, according to the Los Angeles Times.

"We need a regulatory model that will put neighborhoods first while paving the way for short-term rentals to thrive in an appropriate fashion in Los Angeles," Councilman Mike Bonin said, according to the Times.

Bonin introduced the motion along with Councilman Herb Wesson, the Times reports:

In the motion, Bonin and Wesson say that so many homes have been converted to short-term rentals that they have "begun to change the stable and familiar feel of many residential neighborhoods."

The motion also asks that new regulations allow the city to collect transient occupancy taxes, which are paid by traditional hotels.

In Portland, the city council is considering a proposal that would require hosts using Airbnb and other short-term rental companies to get a city permit first, according to the Portland Tribune.

For its part, San Francisco recently passed an ordinance that would effectively legalize certain Airbnb-style short-term rentals. According to Skift, the new law is scheduled to go into effect February 1, though an Airbnb competitor has sued the city, arguing the new ordinance is anti-competitive.

Airbnb has faced stiff opposition from some housing advocates, elected officials and community organizations.

An anti-Airbnb coalition known as Share Better has pushed back hard in New York and now says it will expand its presence to San Francisco, according to Mashable.

Housing advocates have said that Airbnb rentals take thousands of housing units off the market, exacerbating affordable housing issues, Mashable reports.

At least one property owner has come out against Airbnb. Related Cos., which owns luxury residential properties in New York, has reportedly warned its building managers to be on the lookout for tenants renting out their units, according to Crain’s.

A landlord's reluctance to look the other way should perhaps come as no surprise. New York law prohibits short-term rentals of fewer than 30 days. The attorney general has said the majority of short-term rentals there are illegal, Forbes reports.

In counterpoint to all of this negative press, then, comes Airbnb’s new study, which suggests that its business can have a positive impact on the local economy and which touts the positive experiences of its hosts and guests.

Airbnb claims that 62 percent of its Los Angeles-based hosts say that renting their home has positively affected the way they interact with their community.

Meanwhile, other companies looking to cash in on the trend could make it even easier to be a host. Peers, a company that advocates for workers in the sharing economy, is offering home liability insurance to hosts for $36 a month, protecting them from claims that might arise if, say, a guest is injured falling down the stairs, according to Forbes. It would also offer income protection of three months or $5,000 in the event a damaged home can’t be rented out.

Weigh in: Should short-term renting be regulated in L.A.? Why or why not? What's been your experience with Airbnb? Let us know in comments, on Facebook or Twitter