Vacationing in Los Angeles can be pricey. Hotel rooms can cost hundreds of dollars, and living conditions at hostels — long the dominion of young backpackers– don’t appeal to all travelers.
Airbnb seems to offer a solution. The social networking site, which connects vacationers with short-term rentals, has exploded in popularity. There are 14,000 listings currently available in LA, up from 4,000 just two years ago.
But current laws governing the hospitality business are ill-equipped to deal with Airbnb. These rentals aren’t quite hotels, aren’t sublets, and aren’t even legal. “Short term rentals in residential zones are illegal in Los Angeles,” says City Councilmember Paul Krekorian.
San Francisco voted last month to legalize short-term rentals and to collect taxes. New York, however, has decided to aggressively shut down what it deems “illegal hotels.”
Here in LA, lawmakers say some people are taking advantage of the service by buying up property for the sole purpose of short-term renting — and skirting local tax laws.
“We’ve heard about instances where entire apartment buildings are being purchased and rented out as Airbnb, essentially, hotels,” Krekorian, who represents LA’s second district, says. “In many neighborhoods across LA, residents are pleading for help because particularly aggressive hosts are renting out their homes, and it’s definitely having adverse effects on the neighborhood — people’s sense of privacy, their sense of security.”
Many Airbnb renters don’t agree. For Russell Calkins, listing the second bedroom in his Mar Vista duplex on Airbnb isn’t a business venture. “I don’t consider myself a hotel,” Calkins, who works in the film industry, explains. “I guess because I’m not in the same primary service as they are. But at the same time, I’m providing the same service.”
The same goes for Joel Mandelkorn and Mandee Johnson. Their two bedroom apartment in Del Rey costs $2150 a month. Johnson says even if they rent the room out for just a week each month, it helps the self-employed couple pay their bills. “It’s purely economic, says Johnson, “We live in Los Angeles, its an expensive city, and we need a roommate.” She adds that even a one-bedroom apartment is expensive in LA.
Rather than shut down Airbnb rentals, the city says it will start taxing renters at 12 percent of their rate. City staff are currently in the process of identifying, and notifying, short-term renters that they owe the city tax dollars.