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 must arrest landlords who operated apartment buildings as hotels.

But over a year later right went into effect, many rental hosts seem to be unaware of it. Thousands of illegal rentals are still advertised online, according to city officials and a Times analysis of listings on the popular Airbnb platform – and only a fraction have resulted in fines.

The new law limits Angelenos to hosting short-term rentals in their “primary residence”, not a second home or investment property – a rule intended 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 list could be a way to try to circumvent these rules.

Analysis by The Times found that in early June nearly 5,000 Airbnb listings for short-term rentals in Los Angeles lacked city registration numbers. The city, in turn, estimated that over 6,000 listings on Airbnb are noncompliant, a number equal to about 42% of active listings across all Los Angeles platforms.

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

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

“These reductions are largely the result of staff spending an inordinate amount of time helping hosts register, cleaning data and removing 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 ensure compliance.”

But the city has not imposed ongoing fines of $500 a day for illegal listings, one of the enforcement tools included in the new ordinance. Keshishian said that when the app started in November, they didn’t want to issue “weeks of fines when the end goal was always to protect our housing stock, not to charge a fee.

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

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

“People called our office, complaining that the city told residents Airbnb had immunity,” said Nancy Hanna, a partner at law firm Hadsell Stormer Renick & Dai, 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, pointing to a dramatic increase in non-compliant rentals in Los Angeles between December and February, based on reports. of a municipal contractor.

Keshishian said the increase was the result of thousands of previously “unknown” compliance rentals being checked and found to be 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, says it didn’t fight the application process.

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

“We never intended to drag our feet,” Nulty said. “Our goal has been to develop a system that works.” And as of today, he added, the system is “ready to work”.

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

A crackdown on illegal rentals could hurt lodging tax revenue as Los Angeles faces a fiscal crisis. Planners, however, argued in a report that most customers would simply book legitimate rentals or hotels, which would have little effect on tax revenue. The mayor’s office did not provide comment on the matter.

The decision to suspend the new system annoys some residents. “The city is dragging its feet trying to force Airbnb to stick to the deal they made,” said Judith Goldman, one of the co-founders of Keep Neighborhoods First, which lobbied for the new rules amid concerns about the “marketed” rentals.

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

“If you fine someone a one-time $500, they could cover that cost in two or three nights,” said Brian Averill, a tenant in Venice whose building, the Ellison, was involved in a legal battle on nightly rentals. “It seems incredibly inefficient. People will just see it as the cost of doing business and happily pay it.

Airbnb spokesperson Nulty countered 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 Los Angeles will not tolerate people who harbor 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 were forced to quit because the city banned short-term rentals in rent-stabilized apartments. Other landlords who rented an additional unit in a duplex or triplex were also foiled.

“There was a mass exodus in November,” Krich said. “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 that her landlord was not cited for a revolving door of rentals in her rent-stabilized building. Strangers come and go, block the driveway, leave trash and bring in lots of guests, she complained. Other tenants left frustrated by this and other issues in the building, Sjostrand said.

“We have been reporting this for years. Nobody is doing anything,” she said. Planning officials said they received calls about this building and referred the issue to another department for possible enforcement.

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

Keshishian said more than 9,000 listings had prompted warning letters from the city, but around 2,600 still appeared non-compliant after receiving those initial warnings and are being further investigated for possible citations. . At the end of July, Hollywood led the city in properties identified as infringing (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 attorney’s office. Nearly 250 appeals were filed against the citations.

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

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

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

An Airbnb company spokesperson said not all listings on the site were “active” and noted that information on Inside Airbnb did not take into account that multiple listings may advertise the same property. .