The Los Angeles Post

BETTER NEIGHBORS LA: CITY BACKSLIDING ON ILLEGAL SHORT-TERM RENTAL REGULATION AMID EVICTIONS AND PARTY HOUSE VIOLENCE

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Report shows enforcement of LA’s Home Sharing Ordinance declined in 2022 as violations increased, endangering public safety and worsening housing crisis

LOS ANGELES, CA (February 24, 2023) — Three years have elapsed since the City of Los Angeles passed the Home-Sharing Ordinance (HSO), an ordinance that, if properly enforced, would permit Angelenos to host travelers and earn additional income while protecting affordable housing and ensuring public safety.

 

And yet, as the advocacy group Better Neighbors LA’s (BNLA) 2022 Home-Sharing Ordinance Enforcement Report and Recommendations demonstrates, enforcement of the existing HSO saw a steep decline in 2022 as violations continued to increase. The results include higher rents, evictions from rent-stabilized apartments to convert housing to vacation rentals, and neighborhood disruption that includes violence and even homicide.

 

“This isn’t complicated—in the midst of an affordable housing crisis, the last thing we should be doing is be wasting time by allowing STRs to continue to violate a well-written, balanced regulation,” said Nancy Hanna, a partner at Hadsell Stormer Renick & Dai, LLP. “Better Neighbors Los Angeles has had to fill a gap where the City refuses to hold short term stay platforms and hosts accountable, but we can’t regulate a city of four million people, and the results are tragic.”

 

Enforcement by the Department of Planning of the HSO saw a steep decline in 2022 and an increase in violations. The BNLA report observed:

 

  • 54% decrease in warning letters

  • 85% decrease in fines

  • 25% increase in non-compliant listings identified by Granicus (a City contracting service that sends the City a monthly report monitoring 60 home-stay platforms)

 

In 2022, there were an average of 4,272 monthly STRs advertised on the 60 monitored platforms. More than half did not comply with the HSO. From the 2,228 non-compliant monthly listings found by Granicus, the City only fined and/ or sent warning letters to around 64 of those hosts per month—allowing roughly two-thirds of violators to operate with impunity.

 

“This failure to enforce the HSO is endangering city residents and guests,” said BNLA Spokesperson Allison Kirste.  The city has the tools to shut down party house rentals like the one in Benedict Canyon and lets them continue without regard for the consequences.”

 

On January 28, 2023, three people lost their lives and four more were wounded outside of a short-term rental (STR) at 2799 Ellison Street in Benedict Canyon. This was not unique: 2022 alone saw shootings at STRs in Studio City and Encino. The Ellison house in particular highlights the multiple violations that could have triggered enforcement under the HSO:

 

  • It is an unregistered unit: BNLA submits regular records requests, but records for 2799 Ellison were never found, nor do its listings on rental sites display the legally required registration number.

  • It is not a primary residence: an analysis of AirBnB data shows that the listed host “Joy” manages 17 other properties in the LA area and is not the primary owner of the property. The owner is a family trust registered in Florida, and neighbors reported that the home was sublet or rented out frequently. This directly violates the HSO, which requires the host to be the primary owner and prohibits the host from operating more than one STR.

  • It is a geographical bait and switch: listing platforms determine neighborhood location, but the host entered a fake West Hollywood address instead of the Los Angeles address in order to flout the HSO.

 

Other listings illustrate how lax enforcement makes the region’s housing crisis worse.

 

In 2022, McGill University Professor David Wachsmuth studied the effect of STRs on affordable housing in LA. He found that STRs have removed 2,500 homes from the long-term rental market and are responsible for more than 5,000 extra people experiencing homelessness each night. The failure to enforce the HSO worsens the twinned housing and homelessness crises in the City of LA.

“If we enforce the laws on the books, we can prevent the rent-stabilized housing that families need to stay in Los Angeles from turning into illegal hotels,” said Nancy Hanna. “Unfortunately we see the opposite happening: whole buildings emptied of residents so property management companies can get into the illegal hotel business, while venture-capital-backed platforms profit.”

 

One unit of the rent-stabilized duplex at 6349 Orange Street contains long-term residents while the other is operated as an illegal vacation rental. Reported to the Planning Department and the City Attorney by BNLA, this property shows multiple ways that hosts and platforms are violating measures in the HSO:

 

  • It is being operated in a rent-stabilized building: the HSO strictly prohibits operating STRs in rent-stabilized housing. Rent-stabilized housing is essential to ensuring that affordable housing available to Angelenos and the host of the Orange Street Property, “Alex,” is in direct violation of this.

  • It is an unregistered unit: since this STR is operating illegally in rent-stabilized housing, it is not legal to operate as a STR. This means the host is not able to apply for permits and cannot receive a registration number for this STR.

  • It is not a primary residence: The host has multiple STRs. One benefit of the primary residence requirement is to limit multi-unit buildings such as 6349 Orange Street from becoming de-facto hotels.

  • It is another geographical bait and switch: the host at the Orange Street Property is avoiding detection by claiming their property is in Beverly Hills when it is in fact in the city of Los Angeles.

 

These violations would be easily detected if the City enforced the requirement that all platforms must send monthly data, and if the City enforced other measures in the HSO such as requiring up-to-date registration numbers and the street address of the home-sharing property.

 

“Illegal short-term rentals hike up rents, creating a cascade that pushes people out of their neighborhoods and pushes those on the verge of homelessness into homelessness,” said Executive Director of Better Neighbors LA Randy Renick. “It’s time that the City crack down on HSO violations and protect its citizens. The city of Los Angeles can’t afford to lose any more affordable housing.”