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A new set of regulations that restrict how property owners can rent out short-term rental spaces on sites such as Airbnb and Vrbo went into effect in Los Angeles on Monday, kicking off a kind of policy experiment for the popular-but-sometimes-controversial practice of home sharing.
The new regulations, which were first approved in December, legalize short-term home-sharing in Los Angeles, but with some caveats.
First, property owners who want to rent out space on Airbnb, Vrbo or similar sites have to register their units with the city and pay a fee, which they can do online here. The most basic type of home-sharing registration will allow hosts to rent out their properties for a maximum of 120 days per year, and costs $89.
Hosts can, under some circumstances, get permission to rent out their properties for longer, but the fees for those registrations shoot way up: At a minimum, an extended-stay registration costs $850, but if the application requires “further discretionary review” the cost rises to $5,660.
Hosts have four months to complete the registration process, but can begin advertising their rental spaces online immediately after completing the application.
Second, the regulations also limit what types of properties Angelenos can rent out.
Perhaps most importantly, only primary residences are now eligible to become short-term rentals on Airbnb and other sites. This is a significant restriction given that in practice, a number of Airbnb hosts in Los Angeles were essentially operating properties as dedicated home-sharing rentals.
An apartment building in Hollywood where an Inman reporter rented a unit on Airbnb last year. | Credit: Jim Dalrymple II
The regulations define a primary residence as a home in which the host lives for at least six months of the year. Hosts also cannot use additional units on properties such as duplexes as short-term rentals, and will have to show identification and proof of residence in order to register.
Among other things, the regulations also prohibit listing any rent-stabilized units — which in L.A. includes most apartment buildings constructed before 1978 — and require renters to get written approval from landlords before posting their homes on short-term rental listing websites.
Rental spaces also have to be residential in nature, meaning hosts can’t list other spaces, such as semi-converted garages or storage facilities.
Violators who rent out spaces for short terms without registering or while flouting the new rules will be served an “initial notice of violation” that orders them to stop. And if they don’t, “a citation with fines may be applied.”
The new regulations come as Los Angeles grapples with a severe housing shortage, leading to skyrocketing home prices and growing homelessness, and as numerous cities deal with the growth of home-sharing. New York City, for example, has subpoenaed information on tens of thousands of Airbnb listings in an effort to crack down on the practice. Many of the rentals are technically illegal in New York thanks to a law that prohibits rentals for less than 30 days.
For its part, Los Angeles has “experienced a significant rise” in short-term rental activity, according to a city document on the new regulations.
And that poses challenges for the city’s “neighborhoods, its zoning regulations and already limited housing stock,” the document adds.
“The absence of a regulatory structure has inhibited the city’s ability to distinguish between the occasional sharing of one’s home and the full conversion of homes to hotels,” the document continues.
That explanation echoes the common criticism that Airbnb and other home-sharing services reduce the supply of homes that are available to longer term residents, thus exacerbating housing shortages and affordability problems.
The new regulations, then, represent an effort to bring some order to chaos and strike a balance between what property owners want to do and what city officials believe the overall region needs.
Though the new regulations could ultimately upend the home-sharing scene in Los Angeles, Airbnb itself has praised them in the past. In a statement to Inman in December, the company described the regulations as a “big step in the right direction,” adding that “we remain committed to working with the city to develop comprehensive, enforceable rules that are a model for cities around the world.”
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