The Brief

Los Angeles officials are considering a pair of Airbnb-backed proposals that would temporarily loosen city regulations on short-term rentals and allow the company to pre-pay a portion of the lodging taxes it collects from tourists.

If approved by the City Council, the first proposal would allow Airbnb hosts to rent second homes and investment properties on the platform through 2028 — something the home-sharing giant has long sought, but the city of L.A. has prohibited since 2018.

The second proposal would involve Airbnb paying some portion of the transient occupancy tax it collects from tourists to the city of Los Angeles ahead of time to assist with the city’s budget troubles. That could generate tens of millions of dollars more for the city per year, according to the company.

"Airbnb is a committed partner to Los Angeles and its long-term prosperity with not just words, but with action,” said Justin Wesson, Airbnb’s senior public policy manager in California. “That’s why we have offered to provide tax revenue we already collect on behalf of hosts up front to help fund essential city programs millions of Angelenos rely on."

Both plans appeared in Mayor Karen Bass’ budget proposal for the next fiscal year, which starts in July, and were first reported by L.A. Material. Both were initially suggested by Airbnb, according to the company.

Bass’ budget proposal instructs the city’s Planning Department to develop a limited vacation rental program that would sunset by Dec. 31, 2028.

It also instructs city staff to report back with recommendations “to allow the pre-payment of transient occupancy tax in advance of the 2028 Olympics from any payer that wishes to assist the City in accelerating critical infrastructure projects.”

Councilmember Monica Rodriguez, who opposes expanding short-term rentals, told LAist she has concerns about the prepayment plan.

"I don’t know anyone in the country running to prepay their taxes, especially any corporations, and it begs the question as to why,” Rodriguez said.

Pre-paying TOT

Airbnb has discussed this pre-payment concept with city officials, but has not settled on specific terms, a company spokesperson confirmed to LAist.

The company told LAist it would work with city officials to come up with the amounts and timelines for any potential prepayment after the City Council approves the mayor’s budget.

Bass’ office did not respond Thursday to questions about the proposal.

In the current budget year, the city will collect about $297 million in transient occupancy taxes, including $34.5 million from short-term rentals and $262.9 million from hotels, according to the L.A. city controller’s revenue forecast.

The Hotel Association of Los Angeles told LAist that hotels, the main driver of bed-tax revenues, have not been part of any conversations about possible pre-payment.

“City leaders have not engaged hotels on the concept of pre-paying transient occupancy taxes in advance of the 2028 Olympics,” Jackie Filla, the association’s president and CEO, said in a statement. “We learned of this issue for the first time while reviewing the proposed budget.”

The Mayor’s Office first briefed members of the City Council’s Budget and Finance Committee shortly before the Monday release of Bass’ proposed budget, according to one member’s office.

According to the mayor’s budget proposal, the prepaid tax revenue would be used for curb and sidewalk repairs, park maintenance, street cleanliness and tree trimming.

Airbnb entered into an agreement with the city of L.A. in August 2016 allowing the company to collect and pay the transient occupancy tax on behalf of Airbnb hosts. The company said it has collected and paid more than $370 million in lodging tax to the city of Los Angeles between 2016 and the end of last year, for an average of about $39 million annually.

Before L.A.’s 2018 law restricting Airbnbs, there were nearly 29,000 estimated active short-term rental listings in the city of L.A., according to the city’s Planning Department. L.A.’s transient occupancy tax revenue totaled nearly $319 million in the 2018 budget year, according to the city administrative officer. That total includes tax remitted by hotels and it’s unclear how much was generated from short-term rentals specifically.

Last budget year, there were fewer than 5,000 homes officially listed on short-term rental platforms, according to the city. L.A. collected $305.8 million in transient occupancy tax. About $272 million of that came from hotels. The other roughly $33 million came from short-term rentals, according to the city controller.

Bass’ budget proposal projects $313.5 million in transient occupancy tax in 2026-2027.

More Airbnbs? 

Airbnb has long sought to change L.A.’s short-term rental rules to allow more homes on the platform.

Last year, Airbnb launched a public campaign for its "Vacation Rental Revenue Plan.” The company argues that increasing L.A.’s short-term rentals will generate more tax revenue from tourists and expand housing options during the Olympics.

L.A.’s current short-term rental regulations allow homeowners to list only their primary residences on platforms like Airbnb. It also prohibits housing units protected by the city’s rent stabilization ordinance from being listed.

But existing Airbnb laws are rarely enforced. There were 7,500 properties illegally operating as short-term rentals in Los Angeles, according to the city’s Housing Department’s 2024 estimates. Since 2021, L.A. has issued an average of 125 home-sharing citations per year across all enforcement departments, according to city planning records.

Airbnb estimates that lifting restrictions on second homes could generate more than $100 million annually for the city in additional revenue from transient occupancy tax and other tourist spending. The company did not provide a further breakdown of those projections or indicate the exact number of new listings it expects would follow.

There are currently about 5,500 units already operating on home-sharing platforms under the existing rules and thousands more operating illegally, according to city officials.

On April 2, the city of L.A.’s Planning Department recommended in a report that the city reject the Airbnb proposal to allow second homes, finding it was unlikely to generate much revenue and likely to remove long-term housing from the market.

On April 15, the department released another report, reversing its earlier position. It clarified that the previous report had only only analyzed a permanent program but that a temporary program tied to the Olympics was worth considering.

Officials react

Councilmember Bob Blumenfield, part of the Budget and Finance Committee, said Airbnb has been talking to members about vacation rentals for years. He said he opposes the company’s desired changes and wants to see more enforcement of illegal Airbnbs.

“I didn't support vacation rentals when it was before us years ago because I feared it would take long-term housing units off the market,” Blumenfield said. “I'm still concerned about it. I still haven't seen a proposal that I would support.”

Councilmember Tim McOsker, also on the budget committee, did not say whether he would support the Airbnb-backed proposals.

A spokesperson from his office said in a statement that Osker “will evaluate the entirety of the proposal, including the pre-payment mechanism, within the budget hearings process before taking a position.”

Councilmember Nithya Raman, who is running for L.A. mayor against Bass, said the city needs to properly consider the impact of the proposals from Airbnb.

“The idea that the City would entertain speculative tax prepayments tied to expanding short-term rentals, while we are in an acute housing affordability and availability crisis, needs to be properly vetted to consider its full ramifications,” Raman said in a statement.

Airbnb’s political opponents tied to the hotel industry, including hotel workers’ union UNITE HERE Local 11, have consistently fought against efforts to expand Airbnbs. Now they’re also crying foul on the company’s pre-payment plan.

“ This is just a ruse to to build a larger short-term market, which means less housing for Angelenos in our city,” said Kurt Petersen, co-president of UNITE HERE Local 11.

Noah Suarez-Sikes, an organizer with Better Neighbors L.A. — which advocates for stronger limits on short-term rentals — said even if the change is temporary, renters will be permanently displaced.

“ I would hope that council would see that this is a Trojan horse and take it out before it starts harming working class people,” he said.

Campaign contributions

Airbnb is the third biggest spender in L.A. city elections so far this year, after the Los Angeles Police Protective League, which represents officers, and UNITE HERE Local 11.

A committee funded entirely by Airbnb spent nearly $300,000 in support of Jose Ugarte, a former aide to Councilmember Curren Price who is now one of six candidates running to replace him in District 9.

The committee paid $298,832.00 to a company called Street Level Strategy LLC for “canvassing, consulting, doorhangers, data, and office supplies,” according to records filed with the city.

"Across the country and at all levels of government, we back causes and candidates that champion home sharing and tourism and Los Angeles is a top focus for us," Justin Wesson of Airbnb told LAist.

Meanwhile, a committee sponsored by UNITE HERE Local 11 has raised $515,000 and spent more than $440,000 in independent expenditures opposing District 11 Councilmember Traci Park and supporting her challenger, civil rights attorney Faizah Malik.

“ We want to support candidates who want to raise wages so that people can live in Los Angeles and lower rents so that people can afford to live in Los Angeles,” said UNITE HERE 11 co-president Kurt Peterson.

What's next?

The City Council will begin budget hearings Friday. The panel is expected to hold its first vote on the budget May 21.

A bipartisan majority in the Republican-led House voted on Wednesday to end the war with Iran, the clearest rebuke yet of President Donald Trump's handling of the conflict and the subsequent economic fallout.

The war powers resolution passed by a vote of 215 to 208, with four Republicans joining Democrats in support.

The resolution had originally been set for a vote two weeks ago, but Republican leaders sent House members home early for a May recess when it appeared the largely Democratic-backed measure had enough Republican votes for passage. However, the extended break didn't shift GOP support to kill the measure.

Ahead of the vote, House Speaker Mike Johnson, R-La., defended Trump's decision to attack Iran.

"Remember … Iran declared war on us 47 years ago. They chant 'death to America.' The president is trying to keep the people safe," Johnson told reporters.

The vote is mostly symbolic. Democrats, despite multiple attempts, have been unable to pass a war powers resolution through the Republican-led Senate. Even if the measure passed in Congress, it would almost certainly be vetoed by President Trump, whose administration has questioned the constitutionality of the War Powers Act.

Still, Senate Democrats have been inching closer. Last month, they won support on a procedural measure to set up a war powers vote after a handful of Republicans broke ranks to join them. A final vote has yet to be scheduled.

The administration has furiously pushed against the effort in both the House and Senate. Wednesday's vote signals his support for the war may be slipping even among some members of his own party.

Now more than 90 days into the conflict, some Republicans have expressed frustration that the war does not appear to have a clear end in sight. Talks to end the war have yet to gain clear traction, casting doubt on a fragile ceasefire. Just hours before the vote, Iran and the U.S. traded strikes in the Persian Gulf.

The conflict began on Feb 28 with strikes by U.S. and Israeli forces on Iran. Under the 1973 War Powers Act, the president has 60 days to end hostilities if there has been no congressional authorization – though he is able to seek a 30-day extension. The same law also gives Congress the ability to end hostilities by voting on a resolution to end military action, subject to presidential veto.

The top Democrat on the House Foreign Affairs Committee, Rep. Gregory Meeks, D-N.Y., warned ahead of the May recess when the vote was delayed that the plan was sure to pass.

"Let's be clear: Republicans pulled this vote because they knew they were going to lose it," Meeks said. "They know this war is a political and strategic disaster."
Copyright 2026 NPR

Electric vehicles offer many opportunities to save money: on gas, on oil changes, on engine maintenance. But, it turns out, insurance isn’t one of them. In fact, the latest data shows that EVs typically cost $3,159 per year to insure — nearly $1,000 more than gas-powered cars. It’s an added burden that could make the payback period on EVs significantly longer.

On average, the insurance gap between electric and internal combustion engine, or ICE, vehicles was 42%, according to a report released by the insurance-comparison marketplace Insurify. But it varies drastically by state and model. The most expensive locale was Washington, D.C., where coverage cost $6,394 versus $4,124 for ICE cars. Maine was the cheapest at $1,476, just $184 more than a conventional car. The difference was most pronounced in Rhode Island, which has a 73% spread.

Generally speaking, luxury brands like Tesla, Mercedes-Benz, and Audi are particularly expensive to insure, with premiums on many models topping $4,000. Volvo, Chevrolet, Ford, and Hyundai offer cars at the lower end of the spectrum. Insurify wouldn’t disclose which insurers had the most expensive rates, but did say Lemonade, Root, and GEICO offered the most affordable EV coverage.

“Insurers were charging those higher premiums to balance their risks,” said Julia Taliesin, an economic analyst and insurance agent at Insurify, who wrote the report. It is based on more than 235 million quotes in Insurify’s proprietary database. Seven states — Alaska, Hawai‘i, North Dakota, New Hampshire, South Dakota, Vermont, and Wyoming — are excluded due to lower quoting volume. But high insurance expenses means it can take more driving before an EV pays for itself through lower fuel and operating costs. Even if electricity were free and gas stays at $4 per gallon it translates to at least 5,800 more miles a year compared to a car that gets 25 mpg.

A primary reason for the disparity is that EVs cost more to fix.

“We do see that there is a delta in the cost of repair for electric vehicles compared to ICE,” said Ryan Mandell, a vice president of strategy and market intelligence at Mitchell, a company which provides data and software related to car repairs. He pegs the difference at about 15%, noting that batteries are relatively expensive to fix and for mechanics to work around and that EVs have complicated electronics. But there are more fundamental factors as well, like the lack of an engine.

Mandell gave the Ford F-150 as an example. From 2022 to 2025 an electric version of the pickup truck, called the Lightning, was available alongside gas-only and hybrid versions. When Mitchell subjected the gasoline and EV models to a front-end crash test the engine in the traditional model actually absorbed quite a bit of the impact. Because it doesn’t have that additional structure, Ford designed the Lightning with additional reinforcement that cost around 30% more to fix.

“The Lightning had more crash parts on the front of the vehicle,” said Mandell. He also noted that Ford requires removing the battery before doing any work, which increases labor costs. “It adds up.”

Repair costs, however, are not the only factor insurers consider. Insurify’s data showed insurance rates for the two trucks are roughly the same, which Taliesin said suggests driver demographics and behavior play a role, too. “One of the most significant is personal driving history and credit history,” she said. Given the Lightning’s much higher cost, the credit scores of owners could potentially be higher. And Insurify’s data shows that the ticket and accident rates for Lightning drivers are about half that of traditional F-150s.

“Factors like climate risk, vehicle theft rates, population density, insurance regulation, repair infrastructure, and EV adoption levels contribute to regional cost differences,” the Insurify report stated. In several states it cited climate-driven extreme weather, such as hurricanes and flooding, as drivers of high costs.

This EV insurance story isn’t unique to the United States. In 2024, BloombergNEF found about the same spread in the United Kingdom and Germany. France saw double the disparity. Overall, though, American EV owners still paid 87% more for insurance than Europeans.

“Several model-specific factors have driven the wider cost gaps in the large and SUV segments,” said Aleksandra O’Donovan, head of electrified transport at BloombergNEF, pointing to the Tesla Model Y as a particularly extreme example. “[The U.S. price] is nearly triple the insurance rate for the same vehicle in Germany.”

From 2023 to 2025, the EV insurance gap in the U.S. grew from 29% to 49%. But this year, it came down slightly, which Taliesin said is among a few good signs for EV drivers. Another is that the disparity among cars made in the last two years was only 18 percent — compared 42% across all years.

That drop is partly because auto insurance prices fell across the board in the last year. But Taliesin also said that ICE cars are catching up to EVs in terms of how complicated and expensive they are to fix. The cost of EV batteries is also trending downward, too. As EV sales have grown, there is more data for companies to base their prices on and more incentive for them to court EV owners.

”We’ve been seeing a ton of insurance-shopping behavior as insurers have been dropping their rates to compete for business,” said Taliesin, who is bullish for consumers. “That’s definitely a welcome reprieve.”

This article originally appeared in Grist at https://grist.org/transportation/the-hidden-cost-of-owning-an-ev-expensive-insurance/.

Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org