More than three years after a motion was introduced to the Los Angeles City Council by Council Members Mike Bonin, Herb Wesson and Paul Koretz, proposing a new scheme to regulate short-term, AirBnB-style rentals in the City of Los Angeles, the Council finally passed the new ordinance yesterday, by a unanimous 15-0 vote.
According to the new rules:
- Short-term rentals will be allowed only in hosts’ primary residences (where they must live for at least six months of the year)
- Rental hosts will have to register their units with the city, and pay an $89 registration fee
- Only one registration per host will be allowed
- Platforms such as AirBnB will be required to display a valid registration number in each rental listing
- Rental will be capped at 120 days per year
- Hosts who have been registered for at least six months, or who have rented for at least 60 days, without any violations or citations, can apply (for an additional fee of $850) for “extended home sharing” status, which would allow rentals up to 365 days per year.
- No rentals are allowed in rent stabilized (“RSO”) units.
- Renters in non-RSO units may conduct short-term rentals in their units only with their landlord’s permission.
- No short-term rentals will be allowed in non-residential or temporary structures (garages, sheds, trailers, tents, etc.)
- Rentals at the 120-day level can be suspended if a host receives more than three citations or rental-related violations during their one-year registration period, or two violations at the 365-day level.
- Suspensions can be reviewed and possibly removed through a discretionary review process, which will carry full cost recovery fees of $8,500. (Those who do not wish to pay the fee or go through the review process can just wait out their suspensions and reapply for a new permit the next year.)
Before voting on the final version of the ordinance, the Council did make one amendment – to remove a provision added at a Plannng and Land Use Management Committee meeting last week, that would have tied the effective start date for the new rules to the enactment of a separate new ordinance on short-term rentals in second or vacation homes. That ordinance has not yet been drafted or discussed in public and committee hearings, however, so the Council Members heeded a large number of public comments begging them not to delay action on the basic rules for residential properties, and removed all references to vacation properties from the new ordinance before approving it. The new rules for short-term rentals in primary residences will now take effect on July 1, 2019 (the beginning of the city’s fiscal year).
Finally, in several recent council and committee meetings on the short-term rental rules, there has been some discussion of whether or not such rentals should be allowed in Accessory Dwelling Units (“granny flats”). An earlier draft of the ordinance would have allowed the activity in ADUs only if the ADU is the host’s primary residence. A homeowner with an empty ADU in his or her back yard, however, would not have been allowed to use the unit for short-term rentals (to discourage owners from taking such units off the market for long-term residents). Later in the discussions, there was also a proposal to allow homeowners to conduct short-term rentals in older ADUs, which had been permitted before new ADU rules were passed in January, 2017…but at yesterday’s meeting, Council Member Mike Bonin said he didn’t see any reason to treat older units differently from newer units, and successfully lobbied to refer the discussion of ADU rental rules back to committee for further discussions.
In the end, several of the Council Members spoke just before the vote to thank the Council, Council Members, city staff and stakeholders for working so hard for the last three years to come up with an ordinance that takes into consideration the needs of both individual rental hosts, their neighbors, and the city, which is facing a severe housing crisis and needs to preserve as many housing units as possible for long-term residents instead of short-term visitors.
City Council Member David Ryu, speaking just before the final vote, seemed to sum up the feelings of most of the Council Members when he said the new ordinance “is not a perfect solution, but it’s the right step to take.” Both Ryu and others stressed that because short-term home-sharing is a new and evolving industry, it will be very important to review the new rules about six months after they take effect, to make sure they’re working in the way the city intends, and to make any necessary changes in a timely manner.