Home-Sharing Ordinance Draft Passes PLUM Committee, Anticipated to Take Effect in July 2019

Posted by Lead Manager on Wednesday, December 5th, 2018 at 6:44pm.

After 3 years of debate, Los Angeles City Council Planning and Land Use Management committee approved a draft ordinance on December 4, 2018, pushing forward a proposed regulatory structure for home-sharing platforms such as Airbnb and HomeAway. Los Angeles currently has no enforced regulatory system for how residents home-share.

The committee's approval of the full ordinance means that the full City Council could vote on it soon and work out the smaller details in the future. The ordinance would not take effect until July 1, 2019, or until a separate ordinance regulating non-primary residences is passed.

The draft ordinance that went before the PLUM Committee on Tuesday would allow qualified hosts to rent year-round (in a program called “extended” home-sharing). Hosts could petition for more than 120 days by meeting certain criteria, including owning property that has not been the subject of more than 2 nuisance violations. Units under the Rent Stabilization Ordinance (RSO) will not be allowed to be participate under the proposed ordinance.

City staff are also planning to implement web-based systems for host registration and enforcement; the importance of which was highlighted by City Planner Matt Glesne. His office is currently searching for third-party company to help provide these services. The committee discussed the issue around citations, appeals, suspensions and costs involved in regulating short-term rental hosts. In the current draft, if a host is issued 2 citations (whether they are relevant to home-sharing or not), they suffer a suspension period and pay a hefty fee of $5660 in order to file for a discretionary permit. Committee members Mitch Englander and Gil Cedillo, Chair of the Housing Committee, both spoke out about the high price; ideally it would not be cost-prohibitive, even if cost recovery is to be prioritized.

The committee also directed the Planning Department to draft recommendations on short-term rentals for non-primary residences, as the approved ordinance only allows them in primary residences, and to develop regulations for owner-occupied residences smaller than four units subject to the RSO. City staff informed the committee that if it were to make specific allowances for rent-stabilized units, it could impact the California Environmental Quality Act findings on the regulations and require a new analysis. A new analysis could take months to complete, thereby further pushing out the ordinance's implementation.

While discussing this draft ordinance at the November 14th Housing Committee meeting, Councilman Cedillo said that he had specific kinds of renters in rent-stabilized units he was concerned about and wanted city staff to explore creating exemptions for them. The exact parameters of the exemptions were somewhat vague, but fellow committee members expressed hesitation at a blanket ban. Marqueece Harris-Dawson, recently appointed Chair of the PLUM Committee, pointed out that non-RSO units tend to be luxury and only available to high-income renters, suggesting that an RSO ban would benefit the rich while punishing low-income residents. Cedillo added, “I’m looking for a space that allows for us to exercise discretion and judgment in those circumstances. I don’t want to make a policy around an anecdote. On the other hand, we should not be draconian in the design of the policy, to the extent that we cannot hear from this person who’s got a fixed income, he’s a Baby Boomer, he’s disabled, he’s a veteran, and he has the unfortunate circumstance of being in duplex or a fourplex or a triplex.” No official report has been drafted yet.

City leaders are hoping to establish a policy that pleases both short- term rental hosts who depend on the extra income and critics who say it is contributing to the city’s housing shortage and affecting quality-of-life issues in some neighborhoods. A recent Department of City Planning report found 456,000 nights booked on Airbnb alone in 2016, and an estimated 550,000 nights booked by all home-sharing companies in 2017.

If you own a non-primary residence and use it as a short term rental the city wants to further regulate and dictate how you use your property.

If you don't want to deal with these new regulations, bureaucracy, permits and financial liability due to potential fines & fees and would rather just sell now while the market is at its peak...Get in touch with IET Real Estate today!

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