The Los Angeles Post

AS LOS ANGELES LOSES HOUSING TO SCOFFLAW VACATION RENTALS, BETTER NEIGHBORS LA OFFERS SOLUTIONS

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Ordinance balances short term-rentals while preserving affordable housing, but city’s ongoing refusal to fully enforce is a broken promise to everyone affected by LA’s housing crunch

LOS ANGELES, CA — In the face of an unprecedented housing crisis, why is Los Angeles ignoring existing solutions that would return homes to neighbors, forgoing enforcement revenue, and failing to enforce its Home-Sharing Ordinance (HSO)? This is the question posed by the Los Angeles Home-Sharing Ordinance 2021 Enforcement Report and Recommendations from Better Neighbors Los Angeles (BNLA). Report link – PDF

 

“Los Angeles city government continues to turn a blind eye to the hundreds of unregistered and unregulated short-term rentals popping up around Los Angeles, and it’s cutting off the affordable housing supply to those who need it most,” said housing attorney Nancy Hanna, a spokesperson for BNLA. “Corporate vacation rental platforms should be held accountable with the tools that are in front of us. This starts by requiring every operating platform to collect data and issue fines large enough to deter future violations.”

 

Using data scraped from hosting platforms, information from the City, and its own investigations, BNLA identified 1,246 noncompliant listings on Airbnb in April 2021. AirBnB, however, is the only one of 31 platforms operating in the city that currently uses the City’s Application Programming Interface (API) to monitor short-term rental platforms and identify illegal listings. Implementation of the API in September 2020 led to a sharp drop in the percentage of noncompliant listings, as thousands of unregistered listings were swiftly removed. However, that drop was only partial: two months after implementation, the majority of AirBnB listings still failed to comply with the HSO, with only 48% compliance.

 

The City’s data suggests that for every one noncompliant listing on Airbnb, there are two additional noncompliant listings on other platforms. Accordingly, BNLA calculated that total fines could reach $59.8 million for a single month (enough to develop 100 units of supportive housing). Under adequate enforcement, this would come to about $19,936,000 in fines for AirBnB and its hosts, plus twice again as much for other platforms.

 

As identified by BNLA, noncompliance takes many forms:

  • Rent Stabilization Ordinance properties cannot be used as short term rentals, but  are widely offered, removing much-needed affordable housing units from the market.

  • Hosts claim bogus exemptions by self-identifying as hotel, motel, bed and breakfast, or Transient Occupancy Residential Structure (TORS) though not listed as such upon a public records check by BNLA. When flagged, listings that originally claim to be hotels often pop up later as bed and breakfasts.

  • About 20% of listings across platforms have fake, duplicate, expired or otherwise invalid registration numbers.

  • Hosts often falsely claim that a rental unit is their primary residence.

  • Some hosts of Long-Term Rentals rent to guests for shorter periods of time, which ultimately takes units out of the rental market.

  • After policymakers reduced red tape to allow homeowners to more easily create Accessory Dwelling Units (ADUs) and ease the housing crisis, many hosts turned their ADUs over to the short-term rental market instead.

 

Enforcement would have a noticeable effect on the housing crisis. The glut of vacation rentals has been found to raise rents citywide, and acutely in popular neighborhoods like Venice and Hollywood. Prior to the pandemic, short term rentals removed about 7,300 units from the city’s housing market. This dipped significantly during the pandemic, and returned to 2,420 units as of May 2021. Studies in other cities have estimated broad impacts on median city rents.  Failure to fully enforce the HSO translates into the loss of critical affordable housing units for struggling Angelenos.

 

Lack of enforcement also leaves Angelenos with nowhere to turn when illegal vacation rentals affect their own neighborhoods, increasing rents and decreasing quality of life. Better Neighbors LA has itself intervened in individual cases to demonstrate effective enforcement.

 

“The city has broken a promise to citizens by literally ignoring their calls for help,” said Hanna. “The Home-Sharing Hotline received 4,187 calls as of November 2021, but concrete action to respond to complaints is unclear.”

 

Mid-city resident Paula Yerman complained to the city on multiple occasions as her quiet, residential neighborhood turned into a nightmare when a nearby landlord converted a rent-stabilized home into an illegal hostel. When the city did nothing, she turned to BNLA.

 

“We saw an increase in crime, break-ins, noise, litter, and disturbances. Hostel guests regularly loitered and left beer bottles, cigarettes and used syringes on our lawns, ” said Yerman. “With the help of Better Neighbors we were able to get the city to finally take action after unresolved complaints. The neighborhood is safe again for kids to play in and the property is for rent again, perfect for a young family to move in and call home.”

 

While the HSO allows short-term rental of someone’s primary residence, it does not allow for the short-term rental of affordable housing such as rent-stabilized or covenant restricted units. These violators should be at the top of the list for targeted fines since they rob the city of crucial affordable housing units. Park La Brea resident Elden Rhoads has seen this in action.

 

“The quality of life for Park La Brea residents has been greatly diminished by unauthorized short-term rentals. Park La Brea is probably the most magnificent single instance of workforce housing west of the Mississippi River—for now. It’s rent stabilized property and ineligible based on the HSO. Yet people have found many ways to get around the law, such as claiming the rental is for more than 30 days, using fake registration numbers or addresses, and listing without the property owner’s authorization,” said Rhoads. “The short-term rental platforms often act as co-conspirators by failing to check the host’s claims and by shielding the addresses of the rental units. Reporting an unauthorized short-term rental is virtually impossible because of this lack of transparency.”

 

The city’s failure to enforce the HSO has resulted in a loss of a sense of community. It’s turned neighborhoods where neighbors know each other’s families into for-profit hotels where strangers come and go, and rent stabilized properties into “party houses.”

“The house next door was converted into a short-term rental and became a revolving door of parties and guest noise late at night, litter, including vomit and drug paraphernalia, lack of parking and partiers on the sidewalk. My dream home became a nightmare and a place I didn’t feel safe to raise my kids,” said Lily Taylor of Silverlake. “After numerous complaints to the City that didn’t solve the problem, I turned to Better Neighbors. They took action immediately, and the City responded and the property was removed from online platforms.”

 

LA City Attorney Mike Feuer’s lawsuit against platform HomeAway, which owns Vrbo, is one recent positive development, suggesting that comprehensive legal and regulatory action towards both hosts and non-compliant platforms would have a salutary effect.

 

“Targeting registration numbers from a single platform is an important initial tactic, especially when it comes to making sure we don’t lose rent-stabilized homes to vacation rentals,” said Hanna. “However, until we see day-to-day enforcement by both City Attorney and Planning on the range of violations by hosts and all 31 platforms that profit from them, we will continue in this game of whack-a-mole.”

 

Other solutions that can be taken immediately by the LA’s Department of City Planning (DCP) include: streamlining the hearing process, giving citations at the first offense, and better coordinating with other city agencies to stop hosts from capitalizing on delays.