Los Angeles City Council passes new Airbnb rules

After more than three years of deliberations, the Los Angeles City Council unanimously voted to approve new rules that regulate short-term rentals in the city. The law goes into effect in July.

The new regulations only allow short-term rentals in the operator’s primary residence, defined as a property where the host lives for at least six months of the year. Hosts may only operate one short-term rental at a time and will generally only be able to rent out their properties for 120 days a year. However, operators will have the option to apply for an exemption that would allow them to rent their homes out for short terms beyond the 120-day cap.

Hosts are also required to:

• Register with the city
• Have permission from landlords to home-share if they are tenants
• Keep records for city inspection
• Make sure they meet safety requirements such as working smoke detectors, fire extinguishers, and information on emergency exits

Short-term rentals are banned in all rent-stabilized apartments under the new law.

All short-term rental hosts in Los Angeles are already required to register for a city Transient Occupancy Tax Registration Certificate, collect the transient occupancy tax from guests, and remit the tax to the city.

Airbnb, HomeAway, and VRBO collect and remit transient occupancy tax on behalf of their Los Angeles hosts. However, hosts are still responsible for collecting taxes for rentals made on platforms that don’t collect lodging taxes, and for filing occupancy tax returns with the city and deducting any amount collected on their behalf — no matter which platform they use.

MyLodgeTax can help short-term rental hosts automate and simplify short-term rental compliance. For more information on short-term rental tax obligations, see our California Lodging Tax Guide.

The new Los Angeles ordinance also places requirements on short-term rental platforms such as Airbnb, HomeAway, and VRBO. They are not allowed to process bookings for rentals that are not registered with the city or that have exceeded the annual number of permitted rental days. Violating these rules can result in daily fines of $1,000 for platforms. Platforms must also provide information on hosts to the city.

The latest short-term rules may not be the final word in Los Angeles. A proposal has been introduced to the council requesting staffers to draft an ordinance that would allow short-term rentals in properties that are not primary residences, with a citywide cap on the number of those rentals. The council will also discuss exemptions to the ban on short-term rentals in rent-stabilized apartments.

Several larger cities around the country have recently tightened short-term rental rules, including Las Vegas, Baltimore, and Washington, D.C.

However, Airbnb and other short-term rental advocates have also fought back against such restrictions. In Boston, the city has agreed to delay enforcement of parts of its new short-term rental rules in the face of a lawsuit by Airbnb. And in San Diego, the City Council recently repealed its new short-term rental law after an Airbnb-supported referendum seeking to repeal the law received enough signatures to qualify for a ballot.