As the Olympics approach, LA considers crackdown on illegal vacation rentals

The City Council’s housing and homelessness committee is considering adding inspectors, imposing stiffer penalties and requiring websites like Airbnb and Booking.com to use an electronic system already in place in New York City that would automatically reject bookings at properties that aren’t approved for short-term rental.

A July investigation by Capital & Main and ProPublica found more than 60 rent-controlled buildings with units advertised on booking sites despite LA’s Home Sharing Ordinance, which prohibits such stays in rent-controlled apartments. In some cases, entire apartment buildings were listed as boutique hotels on reservation sites.

Rent-controlled units make up nearly 75% of the city’s rental market; the designation caps annual rent increases at about 4% and is intended to preserve affordable housing for city residents.

The number of buildings with illegal listings is likely far higher than the news organizations found because most booking platforms mask the addresses of the properties. The LA Housing Department now estimates that 7,500, or about 60% of the city’s short-term rentals in multiunit buildings, are illegal, according to a memo sent by the agency’s interim general manager, Tricia Keane, to the City Council.

“I think having the capacity to do stronger enforcement is the big missing piece,” said Councilmember Nithya Raman, who chairs the housing and homelessness committee. She said very few violators were receiving citations and fines “because of how broken the process is.”

At a committee hearing in early December, the proposals faced opposition from several property owners, who urged the committee not to impose stricter rules. “I have become absolutely reliant on Airbnb to make ends meet,” said Joni Day, a freelance TV producer.

Airbnb and Booking.com representatives didn’t answer emails requesting comment on the city’s enforcement proposals. Airbnb previously told the news organizations that it works closely with city staff “to address Hosts who try to evade the rules.”

For more than a year, the housing and homelessness committee has been looking into the growth of home-sharing in LA. It has convened representatives of key city departments and the city attorney’s office to learn about enforcement of the 2019 home-sharing law against unapproved listings and what can be done to improve it.

Raman said the dysfunction in the city’s home-sharing enforcement system is a matter of “priorities and staffing.” Additionally, she said, “There are real breakdowns of communication between departments.”

In addition to spotlighting the misuse of rent-controlled apartments, Capital & Main and ProPublica documented how those breakdowns hobbled enforcement as cases were passed between the planning department, whose computer system flags potential home-sharing violations, and the Housing Department, which is tasked with actually citing violators.

Raman has asked city officials to draft plans to establish a single home-sharing task force to streamline the process.

However it’s organized, Housing Department Director of Code Enforcement Robert Galardi said he simply needs “boots on the ground” to investigate what he argues is an “underground” of illegal vacation rentals, which are often disguised as legal monthly rentals by some hosts to evade enforcement.

Capital & Main and ProPublica’s investigation found that relatively few property owners have been cited under the ordinance and that some of those who had been cited continued to offer short-term rentals after paying minimal fines or while their cases awaited appeal hearings.

In one case, residents and neighbors of 1940 Carmen Ave., a 21-unit apartment building in Hollywood, had repeatedly complained to the city about illegal vacation rentals. But the owner had never been fined for home-sharing. However, after the investigation, the owner was fined, and the building appears to no longer accept reservations on booking sites.

Building owner Alexander Stein didn’t return calls seeking comment.

Currently, the city imposes a $587 fine on first-time violators, but the department is proposing higher penalties that would escalate from $1,000 for first violations on the smallest properties to $64,000 for a third violation on the largest.

Another proposal from City Councilmember Bob Blumenfield would give any LA resident the right to sue property owners who offer illegal short-term rentals and to reap some of the damages if they win.

Activists who monitor home-sharing applauded the city’s efforts to strengthen the Home Sharing Ordinance. “Now, the problem is the city still has to develop the will to actually enforce this law,” said Noah Suarez-Sikes, an organizer for Better Neighbors LA.

As the housing and homelessness committee pieces together its proposals, a process that will likely continue well into 2025, it has asked city departments to report back on how the city could put them into effect.

The committee has also ordered the Housing Department to provide annual reports on its enforcement of another law aimed at preserving some of the city’s lowest-cost housing — in LA’s residential hotels, which typically provide single-room dwellings with shared bathrooms.

The Housing Department was granted five new positions this year to enforce the Residential Hotel Ordinance, which prohibits the conversion of residential hotels to tourist accommodations.

The budget allocation came in response to a 2023 investigation by Capital & Main and ProPublica, which found that lax enforcement of the law had allowed the loss of nearly 800 housing units to tourist rooms.