Los Angeles STR operators must obtain police permits under new law

Short-term rental (STR) operators in Los Angeles, California, will be required to obtain a police permit under a new law approved by the City Council. The measure, designed to cut down on large parties and illegal behavior at STRs, is part of a larger regulation package related to hotels.

Several different types of businesses are already required to obtain the permits to operate in the city. Applicants must pay a fee, submit business and tax details, and divulge previous criminal history. They may also undergo background checks and fingerprinting. The requirements for STRs to get police permits have not been set yet, but a report by the Los Angeles Police Department suggests initial fees of $260. 

“My goal is to make [obtaining a police permit] as easy and painless and nearly automatic as I can,” City Council President Paul Krekorian said. “The idea will be that if someone applies for it, unless there’s some complaint from someone, that it would be routinely granted.”

An amendment to the law directs officials to explore alternatives to the police permit requirement and report back to the City Council in 45 days. The new law will go into effect July 1, 2024.

Under the city’s STR law, which passed in 2018, STR operators must register with the city and include a valid registration number in short-term rental listings. Currently, around 6,725 STRs are registered with the city, according to the city’s Planning Department.

STRs may only operate in the host’s primary residence, defined as a property where the host lives for at least six months of the year. Hosts may operate one short-term rental at a time and are generally limited to operating their properties for 120 days a year, unless they meet certain requirements. Short-term rentals are banned in all rent-stabilized apartments.

Hosts are also required to:

• 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

The ordinance prohibits STR marketplaces such as Airbnb and Vrbo from processing bookings for short-term rentals that are not registered with the city or have exceeded the number of annual permitted rental days. Violating these rules can result in daily fines of $1,000. Marketplaces must provide information on hosts to the city.

All short-term rental hosts in Los Angeles must also register for a city Transient Occupancy Tax (TOT) Registration Certificate, collect the transient occupancy tax from guests, and remit the tax to the city. However, if all an operator’s transactions go through a short-term rental marketplace that collects TOT from the guest at the time of payment, the TOT registration requirement is waived. 

Airbnb 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. They must file occupancy tax returns with the city no matter which marketplace they use.

Avalara 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 vacation rental tax guide.