City Council PLUM Committee Approves Short-Term Rental Rules; Next Stop is Full Council

Last Tuesday, April 10, the Los Angeles City Council’s Planning and Land Use Management Committee voted to have the City Planning Department draft a new ordinance outlining rules for short-term AirBnB-style rentals, and send it forward to the City Council Housing Committee and then the full City Council.  The matter has been under discussion among city bodies for three years now, and this was the fourth agendized hearing at the PLUM Committee.  The Committee’s approval of the Planning Department’s most recent set of recommendations represents a major step forward for the issue, and the full Council hearing should be the last stop before final approval.

At last week’s hearing, PLUM committee chair Jose Huizar noted that there are currently about 22,000 short-term rental units operating in the Los Angeles, with as many as 6-10,000 of those converted from standard long-term rentals to short-term “hotel” use.  That kind of conversion, he said, represents “a threat to housing affordability in the area,” and “undercuts our ability to literally live in the city.”

Huizar acknowledged, however, that while the goal is to prevent further loss of long-term rental units, the council also wants to protect short-term rental activity by those who actually live in their homes and just rent out a spare room for critically needed extra income.

While the best indicator of positive vs. negative rental behavior is often whether the property owner/host actually lives in a unit and is present while the short-term rental takes place, Huizar said that  research has shown it’s extremely hard to verify whether or not a host is on site with each particular rental. So most cities, he said, have found it easier to approach the problem by setting a cap on the number of days a property can be rented.  And 120 days seems to be the “tipping point” limit, he said, under which absentee owners will find it more lucrative to return units to full time residential occupancy rather than continue to hold them open for short-term rentals.

At the last PLUM discussion, in February, the committee considered different options for rental day limits, most likely a 120-day cap, and requested that the Planning Department return with information on a possible process to allow responsible, on-site operators to exceed the limit under certain circumstances. So at last week’s hearing, Planning Department representative Matthew Glesne returned with guidelines for a potential system instituting a 120-day short-term rental cap, along with a two-tiered plan to allow responsible individual resident operators to apply for the ability to exceed the 120-day limit.

Under the newest version of the plan, short-term rental operators could apply online for a simple administrative approval to exceed the rental limit as long as they had no nuisance (noise, parking, DBS, etc.) violations filed against them within the past three years.  When such an application is filed, neighbors within 100 feet of the property would be notified and, if none of those neighbors objected, the operator would be granted a simple administrative approval to rent for more than 120 days per year.

If an operator did have any nuisance violations filed against them, however, or if any of the notified neighbors objected to the extension beyond the 120-day limit, the application would move to a discretionary review process, much like that which restaurants go through to obtain a liquor license.  That process could include a possible/optional public hearing and a formal set of findings by the city before an extension could be granted.  Also, any facility operating under an extension of the 120-day rental limit would need only two “strikes” (citations) against it for its permit to be revoked, while sites operating under the 120-day cap would have a three-strike limit.

During an hour of public comments at the hearing, discussion was pretty evenly divided – as it has been at most recent hearings on the topic – between individual, live-in property owners who depend on short-term rental income to maintain their homes and lifestyle, and people who live near properties where absentee landlords have allowed excessive short-term rentals that have adversely affected neighborhoods and neighbors’ quality of life.  The first group argued strongly against caps of any sort on the number of days they can rent their units, while the second group – many of whom live in neighborhoods, such as Venice and the Hollywood Hills, where large numbers of units have been turned into “de-facto hotels” by absentee owners – argued strenuously for the most strict rental caps possible.

Following the comments, Huizar moved that the committee recommend that the city attorney’s office draft a new short-term rental ordinance, including the 120-day rental limit, with the two-tiered process by which owners could apply to exceed the cap.  Other provisions he recommended included an option for landlords to opt-out of short-term rentals by tenants, annual renewal requirements for all registered short-term rental units, a per-night surcharge on all rentals (to help fund enforcement costs), the institution of a 24/7 short-term rental complaint hotline with real-time outreach to hosts, a requirement that short-term rental platforms such as AirBnB and VRBO remove all listings that do not comply with city regulations, a requirement that platforms also maintain their own internal review panels, and that all rental units abide by city rules for collecting and paying Transit Occupancy (hotel) Taxes.

During discussion of Huizar’s motion, committee member Curren Price suggested that even with an extension, rentals be allowed for somewhat less than 365 days, and also that the definition of nuisance violations, when considering applications to exceed the 120-day cap, include citations by LADBS, HCID or LAPD.  (And committee member Marqueece Harris-Dawson later requested that LAFD citations be added to that list.)

Committee member Bob Blumenfeld recommended that units approved for more than 120 days of short-term rental activity also be held to higher safety standards, including things like the installation of fire sprinklers, required for hotels, instead of the lesser standards that apply to homes…but this issue was not resolved during the discussion.  Blumenfeld also recommended that a 15-day comment period be required with the neighborhood notifications for applications beyond the 120-day limit…and asked whether just one objection by a neighbor might derail an extension application, or if there would have to be objections from a majority of the neighbors within the notification distance.  Finally, Blumenfeld requested that even if just one citation had been issued against a short-term rental operator, it would have to be cleared before they could be granted an extension of the 120-day reental cap…and he asked that any new ordinance undergo a city review a year after enactment to make sure the new rules were having their desired effects.

In the end, the committee approved Huizar’s original motion, with the amendments that any outstanding city citations would need to be cleared before an application to extend the 120-day rental cap could move forward, and that 10% of Transit Occupancy Taxes collected remain in the area in which they were collected.  Huizar asked the Department of City Planning (DCP) to prepare an Ordinance with the various new rules and amendments, with a couple of additional questions continued until the Planning Department could report back at a later date.  Huizar also noted that the matter would be reviewed by the Housing Committee before going to the full City Council for a final vote.

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About Elizabeth Fuller

Elizabeth Fuller was born and raised in Minneapolis, MN but has lived in LA since 1991 - first in the Sycamore Square neighborhood, and since 2012 in West Adams Heights/Sugar Hill. She was long-time board member of the Sycamore Square Neighborhood Association, currently serves on the board of the West Adams Heights/Sugar Hill Neighborhood Association, spent 10 years with the Greater Wilshire Neighborhood Council, volunteers at Wilshire Crest Elementary School, and is the co-owner/publisher of the Buzz.

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