City Hearing on Proposed Home-Sharing Ordinance Highlights Deeper Issues

As home-sharing via short-term rentals (often through online booking sites such as AirBnB) booms in the City of Los Angeles, city officials have responded to complaints from angry neighbors with a new effort to regulate such businesses. It’s an effort that walks a “delicate balance” between protection of owners’ rights to profit from their properties, and the rights of neighbors to maintain the quality of life in the communities where they live.

In April, in response to a request from City Council Members Mike Bonin and Herb Wesson, the Department of City Planning introduced a draft of a new ordinance that aims to address many of the most pressing issues presented by short-term residential rentals. One of a series of public hearings on the draft ordinance was held on Saturday, May 21…and impassioned community members representing several different points of view turned out in force to speak up on the subject, completely filling the Ronald F. Deaton Civic Auditorium in downtown Los Angeles (and leaving up to 150 latecomers to listen in via speakers in the outside courtyard.)

Provisions of the Home-Sharing Ordinance Draft

At the meeting, Matthew Glesne, from the Department of City Planning, briefly introduced the proposed ordinance.  He noted that currently, short term rentals of less than 30 days are illegal in the City of Los Angeles, but the new ordinance attempts to both legalize shorter-term rentals in some forms, and to better regulate the overall practice of short term-rentals to prevent abuses.

The major provisions of the proposed ordinance would allow short-term rentals with the following provisions:

• Rental units must be part of a property that serves as the owners’ primary residence
• Owners must register the short-term rental unit with the City (and include the registration number in all advertised listings for the propperty)
• Owners would have to pay a Transient Occupancy Tax (i.e. hotel tax) on rental income
• Owners could register only one rental unit
• Short-term rentals of registered units would be limited to 90 days per year
• Short-term rentals would not be allowed in rent-stabilized buildings
• Short-term rentals by tenants would require landlord approval
• Short-term rentals by owners in areas governed by HOA rules would require HOA approval
• All rentals must be in officially habitable spaces (no unfinished garages, storage areas, rec rooms, tents, etc.)
• There must be no current outstanding Orders to Comply for the property
• All rentals must have required smoke and carbon monoxide detectors
• Guest houses and Accessory Dwelling Units could be rented only when the main unit on the property is occupied as the owner’s primary residence
• Short term rentals could not be used for the sales or promotions of any product, display of any product, or any sort of event that charges a fee
• Owners would be responsible for any nuisance violations of their renters
• Rental services like AirBnB would have to actively monitor listings to make sure all contain legal registration numbers (and remove any non-compliant listings), and provide periodic logs of listings to the city

According to Glesne, the new regulations would provide a roadmap for effective enforcement, using tools such as tickets, fines, and action by neighborhood prosecutors.

Glesne also said that in addition to regulating specific rental provisions, the ordinance also aims – via the 90-day limit – to prevent conversion of traditional, reasonably-priced long-term housing units – of which the city is in desperate need – to short-term rentals…something that is happening with increasing frequency, despite the city’s dire shortage of affordable housing.

Public Comment Divisions

After the brief introduction, Saturday’s meeting was opened to public comments, which fell clearly into two very strongly impassioned camps, each with their own set of deep concerns. Neighbors of short-term rental properties (often owned by absentee landlords and often characterized as “party houses”) argued in favor of the proposed (and sometimes even stricter) regulations…while homeowners who currently rent their properties to short-term tenants tended to support some, but not all, of the proposed provisions.

Neighbor Issues

A number of people who live in neighborhoods (such as Venice and Silverlake) experiencing large proliferations of short-term rentals spoke up emphatically in favor of the proposed ordinance.

This group, including one Venice resident who said there are now more than 2,000 illegal short-term rentals in the area, including six on his own block, contended that short-term rentals have had a negative impact on the stability of their neighborhoods (including the loss of long-term neighbors), as well as the supply of long-term housing.  The rentals, they also said, are often unsupervised and used as “party houses,” which creates additional problems with traffic, congestion, noise, and other nuisances.

One speaker, who lives in Topanga Canyon, said a large number of hillside and fire zone homes in her neighborhood are rented as many as 40 weekends per year for parties and other gatherings….and that neither the people who rent those homes nor those who attend parties there know or abide by the local fire rules, which creates a very real public safety hazard.

Several neighbors of AirBnB properties who spoke at Saturday’s hearing also said that while they support the basic provisions of the ordinance, they are also afraid that it doesn’t yet adequately addresses enforcement issues – such as funding and city staff – or provide a clear set of directives and paths for reporting and escalation – which would be necessary to ensure compliance.  They also said enforcement of rental service roles in compliance were neither clear nor specific enough in the current draft.

Owner/Host Concerns

By far the biggest – and best organized – contingent of speakers at Saturday’s hearing, however, was the hundreds of owners of short-term rental properties, many of whom were associated with groups such as the Los Angeles Short-Term Rental Alliance.

Clearly eager to be understood as separate from multi-property absentee hosts, many of the individual property owners wore stickers with slogans such as “I’m not commercial – I’m middle class!”…or held signs saying, “Home Sharing Supports You!”

Among this group, dozens of speakers testified that short-term rentals of spaces in their own homes saved them from losing their homes during economic downturns, periods of rising housing prices, or while living with conditions such as cancer, AIDS or Parkinson’s Disease. Many referred to their short-term rental units (either their own or their parents’ old homes) “my retirement plan” in an economy that no longer guarantees such things, especially to people who do not work traditional 9 to 5 jobs.

Interestingly, the vast majority of the owner/hosts who spoke at the hearing said they do support (even welcome) the majority of the proposed ordinance’s provisions (including the proposed tax payments).  What they vehemently objected to, however, were the proposed 90-day limit on short-term rentals, and the prohibition of short-term rentals in older, rent-controlled buildings…issues that drive to the very core of some of the major housing problems confronting Los Angeles at the moment.

The City’s position, expressed in a summary of the proposed ordinance, is that the 90-day limit and the prohibition of short-term rentals in older, rent-stabilized buildings, helps to prevent certain types of relatively affordable housing from being removed from the long-term rental market during the current housing crisis.

But the property owners at Saturday’s meeting called those restrictions “egregious” and “impractical,” and argued that they should be able to choose whether to rent to one long-term tenant or scores of much more profitable short-term tenants…which raised many questions about how the burden of providing affordable housing should be shared among various possible providers, from large-scale developers to individual homeowners.

Many of the speakers at the meeting rejected the idea that they should forego the greater potential profits of short-term rentals, as the city is pushing them to do with the 90-day limits “No other businesses are subject to 90 day limits,” said several speakers.

Several also said that the city should instead do more to change zoning and increase density in neighborhoods along transit corridors to provide more affordable housing options.  At least one speaker also suggested that the city use the taxes it will collect from short-term rentals to build other kinds of affordable housing.

Where Things Go From Here

For more information, including a brief summary of the proposed short-term rental ordinance, outlining both the intent and specific provisions, see http://planning.lacity.org/ordinances/docs/HomeSharing/HSOQuickGuide.pdf

The text of the full ordinance is available at http://planning.lacity.org/ordinances/docs/HomeSharing/STROrdinancePublicDraft.pdf

The public comment period on the current draft will be open until June 6.  (Send comments to Matthew Glesne at [email protected], 213-978-2666 After that date, the Planning Department will prepare and forward a new draft of the ordinance to the City Planning Commission, which is scheduled to conduct a public hearing on that draft on June 23, at 8:30 a.m. at the Van Nuys City Hall.