Currently, home sharing is not technically permitted in Los Angeles, and that has landlords pushing for a home sharing ordinance that would change the law. Such an ordinance was drafted in 2018, but isn't close to passing any time soon. We sat down with Andrew Starrels, a partner with Holland & Knight LLP and a member of the firm's West Coast Land Use and Environment Group, to talk about home sharing activity in Los Angeles and to get an update on the potential for a city ordinance.

GlobeSt.com: Tell me about home-sharing activity in Los Angeles.

Andrew Starrels: This issue has received a lot of attention, partly because home-sharing companies like Airbnb have been aggressively lobbying the City for permission to operate, and there are wide variances of opinion on all sides. As of now, home sharing activity like that offered on Airbnb is not permitted in most areas of Los Angeles, and the home sharing companies very much want to be able to operate legally in all areas of the City. While the City wants the tax revenue generated by home sharing and also recognizes that some of its citizens need the income from home sharing to offset their housing expenses so they can stay in their homes, residents in many neighborhoods, especially those with high tourist activity, generally object to home sharing. They believe that it will diminish the quality of their neighborhoods with more tourists and temporary occupants, more disruptions, traffic, noise, etc., and worry that home sharing guests will not take care of properties as well as permanent residents would. Most of these issues apply to single-family neighborhoods. Home sharing in apartment buildings raises other issues. And, a good deal of the hospitality industry is concerned about home sharing activity that competes with hotel properties, where for example an entire building might be used by a building owner as a hotel alternative, marketed solely on Airbnb-type platforms.

GlobeSt.com: Do believe the city will pass an ordinance this year?

Starrels: The City has been contemplating a home sharing ordinance for several years, and the Mayor and several Councilmembers have been attempting to address many of the various concerns. A draft of a proposed ordinance was prepared late in 2016, and has been considered by the City Council's Planning and Land Use Committee at several hearings this year. The most recent hearing was in October, and the Committee continued the matter to another date yet to be announced. I don't expect any final ordinance to be passed this year.

GlobeSt.com: Are landlords supportive of an home sharing activity in the city and a home sharing ordinance?

Starrels: Actually, people in favor of platforms like Airbnb and City leadership have driven the discussion of an ordinance. Remember, at present, home sharing like Airbnb is not permitted in the City. So in this case, it's the people arguing for home sharing and the City that wants additional tax revenue that are arguing for a new law. Most multifamily landlords are concerned about two things: first, increased short term rentals at their properties increase move-ins and move-outs, potentially disturb long-term residents, and potentially increase maintenance costs. The second objection from apartment landlords comes when a tenant puts a unit on a home sharing site without the landlord's approval. Most apartment leases prohibit subleasing without the landlord's consent, and the ease of sharing platforms causes apartment owners to fear that home sharing would be done without their consent to get around the sublease prohibition, potentially allowing a “host” to profit off their rented housing and preventing the landlord from knowing who the occupants of a unit really are.
In response, the City's proposed ordinance attempts to address several of these concerns. First, a host would have to get his landlord's approval, would have to register with the City, pay all required taxes, and list the City registration number on all sharing platforms. Also, a host would only be allowed to do home sharing in his primary residence, and could only home-share one unit within the City at a time. Lastly, home sharing would be capped at 180 days per year for any property. The City believes that this will prevent commercial, “wholesaling” of entire buildings to home sharing. Also, the proposed ordinance will prohibit home sharing in rent-controlled, rent-stabilized, or affordable units.

Many neighborhood and community groups remain concerned about disruptions and disturbances to neighborhood quality and have asked the City to consider lower maximum night limits for home sharing. They point to other cities in the region that limit home sharing to 60 or 120 days per year. On the other hand, Airbnb and other sharing platforms have resisted some of the proposed restrictions and seek changes to the ordinance that would give them greater freedom. They prefer no limits on maximum nights or, at a minimum, a greater number of maximum nights and object to the requirements for landlord consent.

GlobeSt.com: How will the ordinance affect home-sharing activity?

Starrels: That remains to be seen. We still don't know what form a final ordinance will take, or when or whether it will be passed. If I were to make a prediction, I'd say the City will pass something, and will allow home sharing in some form. There has been a significant effort by homeowners to allow the practice, so they can supplement their income, which they say will help them stay in their homes. There is support for the practice in this sense. From a broader policy perspective, though, communities in highly touristed areas—Hollywood, or Venice, for example—fear that home sharing platforms using single-family residences or apartments will become a hotel alternative for visitors, and point to increased use of sites like Airbnb as effectively reducing the supply of long-term housing when the region is suffering from a dire housing shortage and extremely low vacancies

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