Los Angeles proposal would impose new limits on vacation rental operators

Proposed legislation in Los Angeles could bring new restrictions on short-term vacation rental operators throughout the city.

The Los Angeles City Council Planning and Land Use Management Committee recently discussed the proposal, which would limit the number of short-term rental days to 180 per year for each host. It would also ban homeowners from renting out homes that are not their primary residence for short-term rentals as well as forbid short-term rentals in units covered by the Rent Stabilization Ordinance. The new rules would also require short-term rental hosts to register with the city.

The council did not vote on the proposal, but asked city staff to come back with more options for dealing with short-term rentals, including loosening rules to allow operators to rent out properties that are not their primary residences, but with a cap on the number of such rentals in the city.

Advocates of stricter limits argue that an unregulated market for short-term rentals pushes housing prices up and squeezes residents out in favor of tourists. In March, a group including the Venice Community Housing Corporation, the Coalition for Economic Survival, and the California Hotel & Lodging Association urged the city to limit short-term rentals to 60 days per year per host.

While short-term rentals are illegal in many parts of the city, the laws are rarely enforced.

This summer, the Department of City Planning produced a report estimating the number of unique short-term-rental listings within Los Angeles at 23,000. Around 15,900 of these are “entire home” listings, of which 11,400 have been rented for more than 90 days in the last year. Approximately 6,600 of these properties were rented for more than 180 days in the past year.

Last year, Los Angeles came to an agreement with Airbnb to collect a 14 percent lodging tax from Airbnb guests in the city. The deal with Los Angeles also allows the city to audit Airbnb and fine the company for listing rentals that are not registered. The city estimates that Airbnb taxes could generate $33 million for the upcoming fiscal year.

If you’re a short-term rental operator in Los Angeles, new regulations could have a big impact on your business. As it is, there are a number of rules for short-term rental operators.

Short-term vacation rental operators need to comply with city laws regarding business licenses and zoning. And, while Airbnb collects and remits Los Angeles’ 14 percent transient occupancy tax on behalf of its hosts, hosts are still responsible for filing monthly occupancy tax returns with the city on rental revenues made through any other online platform that does not handle these taxes for them. So if you’re listing your rental with another platform, such as VRBO, it’s completely up to you to file returns and collect and remit the occupancy tax yourself.

In addition, Los Angeles County applies lodging tax to short-term rentals in unincorporated areas within the county. Neither Airbnb nor other rental platforms collect these taxes on behalf of hosts; filing and paying these taxes are the host’s responsibility as well.