Thousands of listings violate LA’s new short-term rental law

Tenant activists celebrated when Los Angeles introduced new rules to crack down on short-stay home rentals, saying the city had to stop landlords who operated apartment buildings as hotels.

But more than a year after that law entered into force, many web hosts seem to ignore it. Thousands of illegal rentals are still being advertised online, according to city officials and a Times analysis of the ads on the popular Airbnb platform – and only a fraction have been fined.

The new law restricts Angelenos from hosting short-term rentals in their “primary residence”, not a second home or investment property – a rule meant to ease the housing crisis. It also requires hosts to register with the city, which verifies that they meet these and other requirements. Advertising an unregistered ad might be one way to try to sidestep these rules.

The Times analysis found that at the start of June, nearly 5,000 Airbnb listings for short-term rentals in Los Angeles lacked city registration numbers. The city, in turn, estimated that on Airbnb, more than 6,000 ads are non-compliant – a number equal to about 42% of active ads across all Los Angeles platforms.

So far, city officials have been able to identify around 2,600 properties in Los Angeles on multiple platforms, including Airbnb, that have not complied with the order because they did not include a valid registration.

To combat the problem, LA sent out two sets of warning letters and issued more than 650 citations to rental hosts, imposing one-time fines of $ 500 each. City officials say most scofflaws lined up after receiving the warning letters, and there has been a 62% drop in rental listings since LA began enforcement efforts last November.

“These cuts are in large part the result of staff spending an enormous amount of time helping hosts sign up, clean data and remove illegal listings,” the planning department spokesperson said. , Yeghig Keshishian. “At the end of the day, our goal has always been to resolve these issues and achieve compliance. “

But the city has not imposed permanent fines of $ 500 per day for illegal registrations, one of the enforcement tools included in the new ordinance. Keshishian said when the app started in November, they didn’t want to issue the equivalent of “weeks of fines when the end goal was always to protect our building stock, not to charge fees.

It also did not penalize online platforms that host such lists, as LA law allows. Keshishian said they focused on the hosts because it was easier to prove violations. To enforce the rules against the platforms, he said, the city needs additional evidence to show that they “knew or did not know that their hosts were not in compliance.”

Los Angeles entered into a agreement last year with Airbnb, which forced the platform to remove “categorically ineligible” ads identified by the city, including those for apartments covered by rent stabilization rules. But Airbnb didn’t have to remove more until it rolled out a new system to make it easier to share data with the city and remove illegal ads.

“People called our office, complaining that the city had told residents Airbnb was immune,” said Nancy Hanna, partner at the Hadsell Stormer Renick & Dai law firm, who has sued Airbnb on behalf of tenants.

In May, the Hadsell Company sent a letter complaining that the app was “woefully inadequate” and questioning the city’s claims of success, highlighting a huge increase in the number of non-compliant rentals in Los Angeles between December and February. , based on reports. of a city entrepreneur.

Keshishian said the increase was the result of thousands of previously “unknown” compliance rentals verified and deemed unauthorized.

Airbnb, which said it spent more than $ 280,000 on lobbying and related expenses in Los Angeles in the first half of this year, said it had not fought the application process.

“Our desire is to make sure the rules work,” Airbnb spokesperson Christopher Nulty said, adding that the planned system “puts the enforcement tools in the hands of the city.”

“There was never any intention on our side to drag our feet,” Nulty said. “Our goal has been to develop a system that works. And to this day, he added, the system is “ready to go.”

In June, Airbnb announced that it was launching this system to help with the app. Then the city abruptly suspended it: Planning officials said Mayor Eric Garcetti’s office told them to wait until the department prepared a report on its financial effects.

Crackdown on illegal rentals could affect accommodation tax revenues as LA faces a budget crisis. Planning officials, however, argued in a report that most guests would simply book legitimate rentals or hotels, with little effect on tax revenue. The mayor’s office did not comment on the matter.

The decision to suspend the new system is making some residents worse. “The city is dragging its feet to force Airbnb to adhere to the deal they made,” said Judith Goldman, one of the co-founders of Keep Neighborhoods First, who has been pushing for the new rules amid concerns about “marketed” rentals.

Venice residents, advocates and supporters of affordable housing rally in 2015 to demand regulation of short-term rentals.

(Christina House / Los Angeles Times)

In February, Goldman said she was dismayed to learn from the planning department that more than 10,000 possible violations of the order had been identified – but no citation had been issued. Fines began to be imposed at the end of February, but tenants who complained about illegal rentals remain unhappy.

“If you fined someone $ 500, they could cover that cost in two or three nights,” said Brian Averill, a tenant in Venice whose building, the Ellison, has been embroiled in a battle. legal about overnight rentals. . “It seems incredibly ineffective. People will just see it as the cost of doing business and happily pay for it. “

Nulty, the Airbnb spokesperson, retorted that for the majority of hosts on their platform, “five hundred dollars is a lot of money … and certainly sends a very clear message that the city of LA does not. will not tolerate people staying illegally “.

Some argue that the new rules have had a marked effect.

Chani Krich, co-founder of Homeshare Alliance Los Angeles, said most of the hosts her group represents have been forced to stop because the city has banned short-term rentals in rent-stabilized apartments. Other owners who rented additional accommodation in a duplex or triplex have also been thwarted.

“There was a mass exodus in November,” Krich said. “Basically, they just shut it down.”

Others say they have seen little change under the new law.

Another Venice tenant, Yvonne Sjostrand, said she was frustrated her landlord was not cited for a rental revolving door in her rent stabilized building. Strangers come and go, block the aisle, leave trash and bring in a lot of guests, she complains. Other tenants left frustrated with this and other issues in the building, Sjostrand said.

“We’ve been reporting this for years. Nobody is doing anything, “she said. Planning officials said they received calls regarding this building and referred the issue to another department for possible application.

Another apartment building on the outskirts of Venice was cited for illegal rental in April, but that fine had yet to be paid by the end of July, and two residents said problems with night visitors only served to get worse. A representative for that building, called Westerly on Lincoln, did not respond to requests for comment on the quote.

Keshishian said more than 9,000 announcements prompted warning letters from the city, but about 2,600 still appeared to be non-compliant after receiving those initial warnings and were being further investigated for further possible quotes. At the end of July, Hollywood led the city for properties identified as in violation (167), followed by Venice (147) and downtown (144).

Although more than 600 properties have been fined so far, the majority had not paid those fines by the end of July, according to data provided by the city’s prosecutor’s office. Nearly 250 appeals were filed against the citations.

In addition to the thousands of unregistered listings, the Times analysis found that more than 400 hosts listed at least two entire LA homes or apartments as short-term rentals on Airbnb in June. This raises questions as to whether they violate the rule that limits each host to renting their own primary residence.

LA planning officials have warned, however, that hosts often use third-party managers to list their homes on Airbnb, so the phenomenon doesn’t necessarily show building owners are breaking the rules.

The Times analysis is based on information collected by Inside Airbnb, a tech start-up that collects data from Airbnb listings. The data is a snapshot of the LA listings that appeared on the site on June 10.

A spokesperson for the Airbnb company said not all of the listings on the site are “active” and noted that the information on Inside Airbnb does not take into account that multiple listings could advertise the same property.

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