The nine neighborhoods that make all of Airbnb’s money in LA

Residents of hip neighborhoods like Venice and Silver Lake have been complaining about Airbnbs for years. is completely prohibited by Los Angeles zoning codes and the codes of most adjacent cities). Airbnb has always refused to disclose exact information about its units, but now a study by the Los Angeles Alliance for a New Economy unearthed the facts and it’s more dramatic than one might have guessed: just nine neighborhoods in LA account for 73 percent money Airbnb earns in the region. And rents in these neighborhoods are increasing much faster than in other places.

LAANE’s work generally focuses on labor issues, and they set out to study Airbnb to find its effects on hotel workers in Los Angeles. Although they found evidence that the company is putting pressure on the jobs of high-paying hotel workers (replacing a fraction with low-paying domestic worker jobs), they found that it had a much larger effect on a much larger group: renters, who make up over half of LA’s population. Their report explains, “AirBnB has created a platform that allows homeowners to pit tourist dollars against renter dollars. Homeowners can potentially make a lot more money by converting the traditional rental stock to AirBnB units, as many seem to have done. “

Airbnb started out as a booking site that allowed owners or even tenants to rent rooms in order to generate a little extra cash, and this is one of the arguments used by the company to justify its disregard of the law. . (Airbnb takes three percent commission from each of its hosts and between six and 12 percent commission from guests.) The LAANE report found 8,400 hosts in LA with 11,401 units; about 90 percent of these were whole units, and in many cases landlords had several whole units to rent. Those 7,316 rental units, they say, are now outside Los Angeles’ incredibly tight rental market.

And the places where Airbnb is the most lucrative are, of course, the places where the market is tightest – vacancy rates in the most lucrative neighborhoods are on average. 3.5 percent.

Rents in these desirable neighborhoods are already high, but are being pushed even higher by pressure from Airbnb; LAANE found that median rents in these neighborhoods are on average 20 percent more than the city median.

Venice was particularly affected—12.5 percent of all units there are now Airbnb rentals, which translates to 360 units per square mile in the little hood. If they are not driven out by crazy rents, they are forced to live next to hotels de facto. In a historic building, The Waldorf, the owner changed units to Airbnbs as soon as they became vacant and residents “felt increasingly unwelcome in their homes [and] believe their landlord no longer performs basic apartment maintenance because they are not as cost effective as tourist service units. (The report compares this unattended conversion to a proposed hotel on Abbot Kinney, which has been the subject of a process review for more than three years.)

Rents across the region are already extremely unaffordable – the metro has the largest mismatch in the United States between rents and wages, and a shocking number of residents pay more than 50% of their income for rent. When Airbnb prices more high-income residents in these nine already expensive neighborhoods, it ripples throughout Los Angeles.

Airbnb is running a very successful lobbying operation based on cult, no-joke recruiting techniques, and the Venice branch has already foiled attempts to investigate the issue in Los Angeles. But they can’t stay so secret and so unregulated forever: Malibu used subpoenas to get information about the city’s Airbnbers; West Hollywood is considering banning the practice (although it’s already illegal); and Los Angeles is just starting to pull itself together to review regulations.
Airbnb-affiliated lobby group thwarts Venice attempt to regulate Los Angeles vacation rentals [Curbed LA]
21 signs 2014 was the year of the rental apocalypse in Los Angeles [Curbed LA]

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