The Los Angeles City Council unanimously agreed Wednesday to move forward on a proposed policy for Airbnb and other short-term home rental services, although the ordinance still needs further fine-tuning before becoming law.
The proposed home-sharing measure was approved last month by the Planning and Land Use Management Committee after several years of debate, and the council moved the potential regulations forward on a 15-0 vote, although a number of amendments were added that could significantly alter what was ironed out at the committee level.
Some members expressed hesitation at various aspects of the proposed ordinance before the vote, but unanimously voted to move forward after Councilman Jose Huizar outlined all the future opportunities there would be to continue to alter it, noting the ordinance still has quite a few public hearings and meetings to travel through before becoming law.
“It’s not the last opportunity,” Huizar said.
The proposed ordinance that the council considered would limit homeowners and landlords who wish to rent out rooms or full homes to 120 days per year unless they petition the city for more time, but an amendment introduced by Councilman Mitch O’Farrell would direct city staff to report on establishing a 120-day cap for “non-hosted” stays — where the owner is not present — and no cap for “hosted” stays.
Another significant amendment that was introduced Wednesday would change the definition of a primary residence from a home where the host lives at least six months to at least 11 months, as the ordinance would only allow hosts to rent their primary residence in an effort to prevent properties from being purchased just to be rented out for short-term guests.
Huizar said the proposed ordinance would move on to the Planning Commission before coming back to the council and several City Council committees for further discussion. The City Attorney’s Office would also need to be directed to draft the official ordinance, which would also need to be voted on.
The city does not have an ordinance regulating Airbnb, which connects travelers with hosts looking to rent out their home or a bedroom in their home, but struck a deal with the company in 2016 for it to pay hotel taxes on behalf of its hosts under a three-year agreement.
Huizar’s committee worked for several years to craft a policy that balanced the wishes of rental hosts who say home-sharing is a vital source of income that allows them to keep living in their homes, and critics who say it is contributing to the city’s housing shortage while also leading to a proliferation of Airbnb “party houses” with loud and unruly guests.
“One of the reasons this legislation has taken so long is that we have worked very hard to balance those competing interests, and it ain’t easy,” Councilman Mike Bonin said. “It’s not easy at all. This is Goldilocks. Some of the legislative proposals have been too hard, some too soft, and we’re hoping this one is just right.”
Under the proposed ordinance before any amendments were introduced, a host wanting to go above the 120-day cap would have to meet certain criteria, including that the property has not been the subject of any recent nuisance violations.
The proposed ordinance also would set up a streamlined permitting process for good operators and define what constitutes a violation, which is any enforcement from an agency or department of the city of Los Angeles. After two violations, an operator’s home-sharing permit will revoked. The policy also would create a ban on home-sharing use in Rent Stabilization/Covenanted Affordable units.
The city’s Office of Finance estimates that the city will collect $46 million in Transient Occupancy Taxes from Airbnb this fiscal year, which ends in July, although there have been no limits on rental days and a 120-day cap would likely reduce that number in future years.
The proposed ordinance would require a home listed by Airbnb or a similar service to serve as the host’s primary residence, but last month the Housing Committee also voted to have a report drafted on a potential new ordinance that would regulate vacation rentals, although the panel did not give any guidance as to what it wanted the second ordinance to include.
A Department of City Planning report says there were about 456,000 nights booked on Airbnb alone in 2016, and an estimated 550,000 nights booked by all home-sharing companies in 2017. The department also estimated that removing the cap for primary residences could result in the continued loss/conversion of about 1,500-2,500 units of housing per year to full time short-term rental activity.
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