The recent deal between the City of Los Angeles and short-term home rental company Airbnb is seen as a “massive step forward in the right direction,” by at least one local host. Starting next month, Airbnb has agreed to collect lodging taxes from its hosts and pass them along to the city. (Note that hosts have always been asked to pay the taxes, but the city has struggled to collect them.)
Starting in August, the city is expected to net $5 million from short-term rental taxes, which it has already committed to spend on homeless programs. But Airbnb estimates the city could have actually netted more like $23 million. In materials sent to the Buzz recently, the company says it “initiated conversations with the City over eighteen months ago to reach a tax agreement. We have wanted to pay our fair share and worked with the City to reach an agreement to collect and remit on behalf of our hosts.”
“These agreements allow cities to rightfully benefit in the economic impact of home sharing while also making it easier for Airbnb hosts, the vast majority of whom are middle class people sharing their own home, to comply with local tax laws. We are pleased that this process is moving forward and will benefit Angelenos,” said John Choi, Public Policy Manager for Southern California.
Local host Suzan F., who lives in Hancock Park, told the Buzz that she thinks “The city needs funds to address the homeless and Airbnb is a great outlet for garnishing those funds… along with keeping homeowners and local merchants prospering…I am thrilled.”
But there are still plenty of unresolved issues with short-term rentals. Current city law prohibits renting out your home for less than 30 days at a time in much of Los Angeles, and City Administrative Officer Miguel Santana, L.A.’s top budget official, was quick to point out in a recent Los Angeles Times story that the new agreement merely collects the required taxes — it doesn’t do anything to legalize short-term rentals.
“There is going to be a lot of debate about how this industry is regulated,” Santana said in that story. “We just want to make sure that while that conversation is taking place, the city is not missing out on millions of dollars in revenues.”
Recent Buzz stories reported that some homeowners’ groups and housing advocates have opposed the proliferation of short term rentals, arguing they worsen the city’s housing shortage. As the same time, though, local hosts say renting rooms in their homes actually helps middle class residents keep their homes and benefits the local economy by bringing in visitors who would not come otherwise. It’s a conversation that will continue as the city moves closer to legalizing at least some forms of short-term rentals.
