Garcetti's Airbnb tax plan does little to increase affordable housing

Airbnb declined an interview request but issued the following statement about Santa Monica: "While we've responded to the city's notices, we continue exploring all options and remain hopeful that the city will revisit these misguided rules that harm middle-income Californians."

Mayor Eric Garcetti, in his State of the City speech, called for taxation of Airbnb in order to pump more money into the city's Affordable Housing Trust Fund

Airbnb has been criticized for worsening LA's affordability's crisis, but could the short-term rental site actually help the situation?

Mayor Eric Garcetti hopes so. In his State of the City address, he said he wants to use taxes from Airbnb to help replenish the city's depleted Affordable Housing Trust Fund. He hopes to inject $10 million into the fund, half of which will come from Airbnb taxes.

But the money generated from Airbnb would not have much of an impact on affordable housing. The $5 million would only build about 12 houses a year.

"If we break it down the typical house in Los Angeles costs about $400,000 to build so you're looking at maybe 12 or 13 houses a year that could be built with a fund like this," said Richard Green, Director of the USC Lusk Center for Real Estate.

"Fundamentally, Los Angeles doesn't have the resources in order to provide the kind of subsidies that we would need to solve the problem. That would have to come from the federal level and there just doesn't seem to be a lot of willingness in Congress to do things like increase funding for the section 8 voucher program," said Green.