Los Angeles Passes New Regulation for Short-Term Rentals Like Airbnb

The Airbnb app logo is displayed on an iPhone on Aug. 3, 2016. (Carl Court/Getty Images)

An ordinance regulating the short-term rental business including those with Airbnb was approved by Los Angeles City Council on Dec. 11, marking the end of a marathon debate and discussion on the topic that has lasted three and a half years.

The ordinance sets a limit of 120 days for the hosts to run their home-sharing business during one calendar year. In addition, hosts are required to only rent their primary residence and must pay $89 for the registration, which will need to be renewed every year.

If the host wants to rent out their place beyond the 120 days limit, they need to meet several requirements including that the property has not been the subject of too many nuisance violations. They will also have to pay $850 for an extended registration without which hosts could face a daily fine of $2,000 or two times the nightly rent charged, whichever is greater.

The Los Angeles City Council voted unanimously passing an ordinance to regulate the short-term rentals like Airbnb in Los Angeles, Calif. on Dec. 11, 2018. (Screenshot/LAcity.org)

Hosts may be suspended for 30 days if they have two violation notices at a time. They also could lose their eligibility if they receive three violation notices within a year.

Although the ordinance is “far from perfect,” it is “as close as we can get,” said Councilman Mike Bonin at the council meeting. He indicated that the ordinance is a measure to keep a balance between all the competing interests.

The ordinance acts to protect housing stock by curbing the conversion of long-term housing units to short-term rentals, which is more profitable for the hosts, after critics argued that the home-sharing business further fueled the city’s housing shortage.

“In some cases, large numbers of housing units within a building, or even entire buildings, have been effectively converted to short-term rentals,” the ordinance read. “Short-term rentals in property other than a primary residence create unfavorable consequences, including negative impacts on the residential character of surrounding neighborhoods and increased nuisance activities.”

On the other hand, many hosts of short-term rentals showed up at the city council meeting to express their concern that the fees imposed under the ordinance as well as other limitations could push them out of business, which in some cases meant unemployment.

The ordinance also prohibits units that fall under the city’s Rent Stabilization Ordinance to be rented out. The Housing Committee recently asked for a report exploring the feasibility of allowing some low-income residents who live in rent-stabilized units to be home-sharing hosts. However, the details about who would qualify and under what conditions were not clear.

Councilman Mike Bonin said the ordinance will be reevaluated six months to a year after it takes effect on July 1, 2019.

Currently, there are about 23,000 homes and units that are offered as short-term rentals in the area of Los Angeles, according to a report from the Curbed Los Angeles.

Last month, Washington D.C. also passed a similar legislation to regulate the short-term rental business. In comparison to Los Angeles’s 120 day limit, D.C. hosts are given only 90 days for renting out their primary residence. But the hosts in D.C. are also given 30 days for renting out any homes other than their primary residence, which is prohibited in Los Angeles.