Los Angeles Cracks Down on Airbnb With New Regulations

The city of Los Angeles has passed new regulations on Airbnb and other short-term rental platforms in an effort to crack down on "bad" hosts and alleviate the ongoing housing crisis.

The ordinance, unanimously passed by the City Council on Wednesday, Dec. 12, has been in the works since 2016. Host Compliance LLC reported that only 10,000 of the 23,000 homes and units listed as short-term rental units for rent in LA. This is part of a bigger issue for locals as these short-term rentals, while more lucrative, take housing opportunities away from those in need of long-term accommodation. This, in turn, feeds the housing crisis and causes tension in LA's neighborhoods.

So how exactly are the new policies going to combat the crisis? Well, first and foremost, LA is banning all rent-controlled units from Airbnb and other short-term rental platforms. Hosts will also only be permitted to rent out their "primary residences," or the place in which the host lives for a minimum of six months a year. Hosts will also only be allowed to rent their spaces for 120 days per annum, and it must be their only listed property. If they want to extend their list time, they'll have to pay the city an annual fee of $89 -- and that's just the tip of the iceberg.

Los Angeles City Council member Mike Bonin explained that these new regulations are meant to accommodate hosts who list their homes as their main source of income while eliminating "bad" hosts who turn living spaces into "rogue hotels." However, many Airbnb hosts disagree that these policies are beneficial to them at all. A few hosts even testified at City Hall that they need these rental platforms to pay off their mortgages as housing costs continue to rise.

"Homesharing and vacation rentals play an important role in allowing Angelenos to directly benefit from 48 million visitors who travel to Los Angeles every year," Mattie Zazueta, a spokesperson for AirbnbSan Francisco, said to CNBC. "The city needs a comprehensive short-term rental policy that regulates all short-term rental activity, including its long-standing vacation rental market."

The new rules official take effect in July 2019 and will apply to the entire city of Los Angeles.

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