A Los Angeles City Council committee struggled Wednesday with the question of allowing rent-stabilized units to be offered on Airbnb, and asked staff to find a path that would allow certain low-income residents living in them the ability to be home-sharing hosts.
The issue of the roughly 640,000 units that fall under the city’s Rent Stabilization Ordinance continues to be one of the final hurdles the council is working to clear after roughly three years of meetings and debates on proposed regulations for short-term rentals through Airbnb or other sites.
The Economic Development Committee examined the latest version of a proposed ordinance that would ban RSO units from being available on the rental sites.
Councilman Marqueece Harris-Dawson pointed out that non-RSO units tend to be luxury and only available to high-income renters, suggesting that an RSO ban would benefit the rich while punishing low-income residents.
“So it’s an opportunity to add income, and we weigh it towards people who already presumably have a way of paying a high rent,” Harris-Dawson said.
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.
The City Council in May approved a potential set of regulations for the short-term rental industry that included a ban on RSO units, but also asked for more reports from staff and sent the regulations back to the Planning Commission. But the Planning Commission offered an opposite opinion, voting that RSO units should be allowed. The council’s Planning and Land Use Management Committee earlier this month approved a proposed ordinance that would ban RSO rentals.
Now the Economic Development Committee has directed staff to try to find a middle ground.
Councilman Gil Cedillo, who chairs the committee, said several times he had specific kinds of renters he was concerned about.
“I’m looking for a space that allows for us to exercise discretion and judgment in those circumstances,” Cedillo said. “I don’t want to make a policy around an anecdote. On the other hand, we should not be draconian in the design of the policy, to the extent that we cannot hear from this person whose got a fixed income, he’s a Baby Boomer, he’s disabled, he’s a veteran, and he has the unfortunate circumstance of being in duplex or a fourplex or a triplex.”
The city’s RSO was passed in 1978, meaning only units built after that date are not subject to rent stabilization. About 15 percent of the available multi-family units in the city are not subject to the RSO, city staff told the committee.
“I think we’ve always acknowledged this is a tough question, what to do with these RSO units,” Matt Glesne of the Planning Department said.
He added there was a concern that a single person would purposely rent an RSO three-bedroom apartment with the intention of renting the other two rooms out on Airbnb, which could prevent a family from renting the unit.
Glesne’s comments were in line with Councilman Paul Koretz, who spoke at the Planning and Land Use Management Committee and said renting RSO units for short term could lead to a loss of available housing.
“I think they are mistaken if they think it’s all right to open it up to rent-stabilized units. I think we can’t ensure that the privilege won’t be abused and that we will lose even more RSO units to full-time home sharing,” Koretz said.
The Economic Development Committee officially approved the same rules that the Planning and Land Use Management Committee approved — which includes a ban on RSO unit rentals — but with Cedillo’s direction that staff make some “tweaks so that we don’t have adverse results that are inconsistent with the goals of the general policy. And specifically to these smaller units and circumstances that have been brought to us.”
The proposed ordinance now goes back to the Planning and Land Use Management Committee.
The latest set of guidelines approved by both committees would allow qualified hosts to rent year-round, something industry advocates have been pleading for. Hosts could petition for more than 120 days by meeting certain criteria, including owning property that has not been the subject of any recent nuisance violations.
The proposal approved by both committees differed from the recommendation of the Department of City Planning, which called for a 240-day cap on hosts who petition for more time.
City leaders are attempting to craft a policy that pleases both short-term rental hosts who say their livelihood depends on the practice and critics who say it is contributing to the city’s housing shortage and affecting quality-of-life issues in some neighborhoods by allowing for rental “party houses” to overtake otherwise quiet neighborhoods.
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 to 2,500 units of housing per year to full time short-term rental activity.
The city’s Office of Finance estimated in May that the city would collect $46 million in Transient Occupancy Taxes from Airbnb for the 2017-18 fiscal year, although there have been no limits on rental days and a 120-day cap would likely reduce that number in future years.