Last week, we reported on the first lengthy discussion by the Los Angeles City Council PLUM Committee on a set of proposed new rules to govern short-term, AirBnB-style rentals in the city. The Committee held a public hearing last Tuesday, at which more than 100 stakeholders testified both for and against the currently-proposed regulations. They include:
- A cap of 180 rental days per year for each property
- No difference in rules for “hosted” (owners on site) vs. “non-hosted” (owners off-site) stays
- No short-term rentals allowed in RSO (rent-stabilized) units
- No advertising of any unit that does not have a city registration number
- Only one guest/party per property at any one time
- No commercial activity (such as advertiser-sponsored parties or sales events) at short-term rental properties
- Rental hosts would pay city taxes, be responsible for following all city health and safety regulations, and be required to obey all lease and HOA provisions when engaging in short-term rentals
- Rental platforms such as AirBnB would assist in removing non-compliant rental listings and providing the city with contact information for property owners
- The city would create a system of fines and other dedicated enforcement resources (e.g. 10% of the Transit Occupancy Tax paid by short-term rental owners)
- 90% of the Transit Occupancy Tax paid on short-term rentals would go toward the city’s Affordable Housing Trust Fund
During the discussion, the biggest point of contention was the proposed 180-day cap on short-term rentals at any one property. Speakers during the public comment period varied considerably on this point, with many advocating a much higher cap or no cap at all…while another large number advocated for the proposed cap, or an even lower, more restrictive one. There were also those, including a number of PLUM Committee members, who questioned the whole idea of a cap on the number of rental days and wondered whether another type of solution (such as a cap on the number of short-term rental properties allowed in a specific neighborhood) might be more effective in protecting neighborhoods and housing stock.
City Council Member David Ryu, who represents the majority of our general Greater Wilshire area, is not on the PLUM Committee, and did not speak at last week’s hearing…but the Buzz has learned that Ryu has taken a stand on the short-term rental issue, and did send a letter outlining his preferences to the PLUM Committee last week.
In his letter, Ryu expressed support for “an ordinance that provides reasonable and thoughtful regulations for the home-sharing and short-term rentals industry,” but said he also has some concerns about the currently-proposed rules, especially regarding hosted (hosts on site) vs. non-hosted (hosts not on site) stays, rentals of a host’s primary residence only, rules regarding use of rent-stabilized units for short-term rental activity, and the percentage of short-term rental fees to be used for enforcement activity.
Separately Regulate Hosted Rentals vs. Un-Hosted Rentals
In his letter, Ryu said the issue of hosted vs. non-hosted rentals is extremely important, and noted that in his council district, “whole-home rentals make up almost all of the complaints I receive.”
“There is a large difference between whole-home rentals and home sharing,” he writes. “Home-sharing where the host is on site is typically not an issue in terms of neighborhood nuisances or the loss of rental units on the market.”
At the PLUM Committee hearing last week, Planning Department representatives testified that other cities have had problems enforcing rules about hosted vs. non-hosted rentals, because it’s too hard to tell who is present at a property at any given time. But Ryu said, “I disagree with the Department’s assertion that it is “virtually impossible” to differentiate the two types of listings and treating all types of rentals the same will solve none of the problems in my district.”
Ryu asked the committee to distinguish between the two kinds of rentals in any proposed regulation scheme, and to set different rental day caps for the two kinds of rentals:
“…the CPC’s decision to further increase the number of days to 180 means that whole home rentals can be every weekend of the year or every day throughout the entire travel season, [which is] a large burden on neighbors and neighborhoods. I ask that the Committee split hosted home-sharing from un-hosted home rentals, limiting un-hosted whole home rentals to below 60 days (any more makes the property akin to a vacation rental), and allowing hosted rentals the ability to home-share year round. This would eliminate a majority of the problems in my district and reduce the regulatory burden on both the City and our many residents.”
Retain Primary Residence and Rent Stabilized Unit Requirements
Ryu did, however, advocate for restricting short-term rental activity to an owner’s primary residence (with vacation rentals specifically not covered by the new rules), and he agreed with the CPC’s recommendation to ban short-term rentals in rent-stabilized units.
“These requirements ensure that most available rental housing is used for long term tenants, a key facet if the City intends to make headway on its housing affordability crisis,” Ryu wrote. “This should include vacation rentals, which were not intended to be taken up by this ordinance and inclusion of which would hamper enforcement. I ask the PLUM Committee to continue keeping vacation rentals out of this ordinance and remaining with the original intent of short term rentals being allowed only in one’s primary residence.”
Maintain 10% Funding Levels for Proactive Enforcement
Finally, in his letter to the PLUM Committee, Ryu said he is “pleased” that the Planning Department has advocated using some of the revenue the city would gain from short-term rentals under the new rules for proactive enforcement (as he has previously requested), and that the CPC has even increased the proposed portion of revenue to be earmarked for enforcement from 5% to 10%. “We should maintain enforcement funding at no lower than this level,” he said. “We cannot approve yet another law with rules and restrictions that we do not adequately fund enforcement for.”
No specific mention was made of Ryu’s letter at last week’s hearing (the letter was dated the same day as the hearing), but several of the above issues were debated. In the end, no vote was taken, and PLUM Committee Chair Jose Huizar said the committee will continue its consideration of the new short-term rental rules in late July or early August.
