Ross Chapman rents his three restored 1920s Venice bungalows to tourists hoping to get a taste of life as a local
More than 1,000 Westside homes have become short-term vacation rental properties, letting tourists live like locals while regulators worry about zoning and taxes
By Gary Walker and Joe Piasecki
A luxury waterfront master suite overlooking Marina del Rey harbor, $150 per night.
A cheery one-bedroom apartment near the Venice canals and ultra-hip Abbot Kinney Boulevard, $125.
A bungalow with a private garden just a block from Santa Monica beach, $89.
More than 1,000 such listings exist throughout Westside destination neighborhoods, but these aren’t hotel rooms the way hotels are traditionally defined.
These are private homes in residential neighborhoods, with owners renting rooms to tourists through mutually beneficial but largely unregulated — and in some cases technically illegal — transactions brokered online as part of a multibillion-dollar “sharing economy.”
Much like rideshare services Uber and Lyft, which have disrupted the taxi industry by using smartphones to connect drivers with spare time to those in need of a ride, short-term vacation rental websites like AirBnB and HomeAway have set up a thriving peer-to-peer economic network connecting private individuals with spare housing to consumers seeking a more personalized travel experience.
“That’s the whole concept: Living like a local,” explained Ross Chapman, a Santa Monica information technology specialist who owns three painstakingly restored 1920s Venice bungalows on Grand Boulevard that he rents for days or weeks at a time.
“It puts people in an area they’re seeking to explore … right in the middle of all the local color,” he said. “The guests adore staying here. It’s been a blast.”
Chapman’s participation in the global vacation rental network has been a socially and economically rewarding win-win-win for him, his guests and the local economy.
His formerly rundown bungalows, renovated by previous owners for use as short-term vacation properties, rent for $250 a day, $1,500 per week or $5,000 per month — with Chapman paying the city a 14% transient occupancy tax on each transaction, the same as commercial hotels pay.
Share and share alike
One big issue for local governments, however, is that many vacation rental providers aren’t nearly as honest, the Internet platforms that connect owners to renters are absent from the tax equation, and regulators are pretty much totally out of the loop.
In May, Los Angeles City Councilman Mike Bonin and Council President Herb Wesson filed a motion calling on their colleagues to form a task force charged with bringing city codes and regulatory agencies up to date — and equipped to collect revenue.
“The ‘sharing economy’ is redefining the ways that goods and services are being exchanged. Residents are now fulfilling new roles and performing new tasks that have normally been carried out by businesses. … Companies like AirBnB, recently valued at $10 billion, bring in hundreds of millions of dollars in the shared tourists trade but do not charge hotel taxes, depriving cities of millions of dollars in tax revenue,” the motion reads.
If those numbers sound staggering, they are. AirBnB currently lists more than 1,000 short-term vacation rental properties in the Venice, Santa Monica and Marina del Rey area. Home Away lists 341 in Venice, 270 in Santa Monica and 96 in Marina del Rey. VRBO (Vacation Rentals By Owner), another site, lists 355 in Venice, 295 in Santa Monica and 87 in Marina del Rey as well as six in Playa Vista and 15 each in Playa del Rey and Culver City.
Like Los Angeles, Santa Monica’s hotel tax is 14%. Unincorporated Los Angeles County communities, including Marina del Rey, charge 12%.
Some cities have pushed online vacation rental advertising networks to collect hotel tax receipts from users and deliver them to local coffers.
“We’ve launched a program to collect and remit taxes in Portland and San Francisco, and we’re working to expand this initiative,” said Nick Papas, a spokesman for AirBnB.
Whether Los Angeles would be part of that rollout, Papas wouldn’t say.
Laws are ‘behind the times’
Taxes aren’t the only issue, however. In residential neighborhoods, zoning codes don’t allow property owners to rent homes, condos and apartments as temporary accommodations rather than leasing them as permanent dwellings.
In Los Angeles, the response to the zoning conundrum has been relatively nonexistent.
Benjamin Reznik, a prominent Los Angeles land use attorney, said a big part of the problem of regulating short-term rental arrangements stems from the city’s outdated community planning guidelines.
“Our codes do not keep up with the times. Short-term vacation rentals are a new phenomenon, and our planning codes are not designed to deal with them. The Internet has taken what was underground and brought it aboveground,” Reznik said.
Keeping up with the times is also important in the long run, he said, to prevent large-scale building owners from taking rental units out of the permanent housing stock to chase more lucrative short-term contracts.
“They have to find a way to regulate their density in order to keep [short term rentals] from becoming full-scale hotels in residential areas. And as cities begin to grapple with regulations, certain homeowner groups, large hotels and unions that represent hotel employees may soon pressure city leaders on how these regulations are designed,” Reznik continued.
In Santa Monica, the law is much less muddy — short-term vacation rentals are against the law in residential neighborhoods — but enforcement has been more reactive than proactive.
Despite the hundreds of Santa Monica vacation rentals available online, the city has prosecuted just two related cases in the past four years.
In 2010, the city prosecuted the owner of a single-family home on Navy Street that was used for short-term rentals and, through a plea agreement, ordered him to pay thousands of dollars in fines, said Santa Monica City Atty. Yibin Chen.
City officials moved after receiving numerous noise, traffic and safety concern complaints from neighbors who said the residence had essentially evolved into a commercial hotel.
“Short-term rental operations are essentially the operation of a hotel. In order to operate a hotel, you need a permit,” Chen said. “Engaging in short-term vacation rentals is no different than any other business.”
The new ‘Range Wars’
Some who live near short-term rental properties and others concerned that having new neighbors each week erodes the character of neighborhoods have sought an outright ban on the practice.
William Ballough, a resident of Playa del Rey for 20 years, owns two duplexes adjacent to a property used for short-term rentals. He and his long-term tenants now deal with a constantly changing cast of neighbors who bring with them noise, traffic and other disruptions.
“You never know who’s walking by your residence or down your street, and you don’t know what they’re up to,” Ballough said.
Carl Lambert, who owns the Venice Breeze Hotel, is supportive of city efforts to collect hotel tax revenue from short-term rental operators and would like to see more operational guidelines as well.
“They should also verify that housing is safe, and it’s important to ensure that the neighbors living near these rentals are respected,” Lambert said. “It’s also incumbent that there be responsible people available who are able to respond to neighborhood complaints.”
An effort to ban short-term rentals in Los Angeles arose last year in Silver Lake, a hip and artsy neighborhood with similar demographics to Venice where the phenomenon has also taken off.
A land use committee of the Silver Lake Neighborhood Council put forth a resolution calling for a ban that was, however, ultimately defeated after a group formed in support of sharing economy commerce organized against it.
A town hall meeting held to discuss the resolution was dominated by members of Peers, an organization that supports short-term rentals and ridesharing, said Silver Lake Neighborhood Council member Anne Marie Johnson, chair of that committee.
“People are concerned about the use of single-family homes as businesses,” said Johnson, who took the position that short-term vacation rentals are illegal. “Peers infiltrated our town hall and several people left the room because of them. They are not a community group. To me, they are a lobbying group.”
The resolution went down in defeat in December. Johnson, an actress who starred in TV’s “In the Heat of the Night,” said Peers also mounted a challenge to her reelection in April.
Late last year, the Venice Neighborhood Council also considered but ultimately defeated a resolution that would have asked the City Council to investigate the proliferation of short-term vacation rentals in Venice and to draft a city ordinance that would regulate the practice.
That resolution, also heavily opposed by Peers, lost on a vote of seven to three, with two members abstaining.
Venice Neighborhood Council Vice President Marc Saltzberg, who drafted the resolution, fears that the ultimate conclusion of the sharing economy is its exploitation by big business.
“This could become the equivalent of the range wars of the 1870s,” he said, referring to territorial skirmishes over water and grazing rights in the days of the Old West.
“I’m sorry that our board did not pass our motion, but in terms of what the city is planning to do, I’m 100% behind it,” Saltzberg said. “My hope is that the task force will define areas of economic activity that they want to examine, including Uber and participants from both sides of short-term vacation rentals.”
Regulation does not necessarily mean contraction, however.
The Bonin-Wesson motion also contemplates how the city might reduce barriers to broader public participation in sharing economy activities while also building in public protections, following a similar recommendation issued last summer by the U.S. Conference of Mayors.
The city “should also explore the feasibility of expanding its sharing infrastructure, promoting existing sharing enterprises, incubating sharing economy startups, utilizing idle public resources and what are the advantages in doing so,” the motion reads.
The facts in this article are INCORRECT! IN FACT, the Motion passed at the VNC meeting last week. The tide is turning….stakeholders are now aware that the over-saturation of short-term rentals in popular destination areas of Los Angeles is creating safety, noise, traffic and sanitation problems; these illegal transient rentals are destroying the very fabric of our neighborhoods; weakening the affordable housing market and threatening the very existence of rent control.
Truth,
The Venice Neighborhood Council did recently vote to support Bonin’s current LA City Council motion, but in the story we were talking about a different VNC resolution by Saltzman last year that happened before Bonin took action on his own this year. Thanks for the opportunity to clarify.
A few clarifications:
No motion regarding short term rentals have been presented to the Silver Lake Neighborhood Council. The motion presented to its Urban Design and Preservation Advisory Committee was not voted on. No motion went “down in defeat” in December or at any time with regard to the SLNC. Please post this correction.
I have lived in the same house for 19 years. It is an older duplex, split into two units: upstairs and downstairs. I live downstairs. Unfortunately for me, over the past two years, my landlord has begun renting the upstairs unit as a short-term vacation property.
My complaints are as follows. This activity is beyond disruptive. First, it creates more local traffic, which is already an issue in summer months. Parking, which is already horrific in the area, has become near impossible. If vacation renters cannot find parking, they block garages with rental cars. The amount of garbage created by vacationers is enormous. And the worst part is the constant and excessive noise.
Let’s start with the parties. I cannot blame the short-term vacationers. They pay a lot of money to rent the place. They want maximum value. Invariably, their friends visit. A few friends — turns into a few more friends — which leads to a full-blown party. Often the short-term guests or friends become drunk. On multiple occasions, I have experienced verbal altercations.
Short-term renters are usually on vacation. They do not have to work in the morning. They stay up late every night of the week. I, on the other hand, do have to work during the week. I need to go to sleep by 11:30 P.M. I cannot sleep with a constant party above me. Renters usually come in larger groups and often with children. Groups are inherently loud. Anyone who has spent time with children knows they can be loud, as well. And with children, not only do I hear screaming, crying, running, jumping but the kids wake up early, even on weekends (7 A.M. in many cases.)
The move-in/move-out process with the suitcases, camera equipment, computers, game consoles, toys, beach accessories and various other items is extremely disruptive. Check-in times can be noon, 3 P.M., or even 1:30 A.M. Every 5-7 days, I hear people dragging suitcases and belongings up a flight of wooden stairs. The move-in/move-out process takes anywhere from 20 minutes to an hour, depending on the size of the group. Next comes the constant grocery shopping. I hear them go up and down the stairs with all of their bags. This happens daily. When their 4-7 day vacation ends, I listen to them banging everything down flights of stairs, and a barrage of yelling from the garage to the house. Just when I think: ‘Ahhh, thank goodness. They’re gone. Finally, some peace…’ NO! Wrong! Following the move-out process, the landlord employ three maids to clean the entire house and serve as faux-property manager. The maids spend five hours cleaning (also very loud) so that the next group can enter the revolving door. It never seems to end.
Short-term renters are renting a home for a “short time,” thus the name. These people never return. They have no vested interest in the hardship they cause the neighbors. They have no interest in keeping the area quiet, clean, peaceful or safe. They hold parties, yell, scream, “borrow” items (boogie boards, beach chairs, bikes, etc.) and never return them or return them in a horrific state. My shared trash bins are constantly full. I cannot remove garbage from my house in a timely manner. The short-term renters leave shared doors, gates and fences open or unlocked. Often, I will find our security gate propped open with a rock. What is the point in having a security gate if anyone can enter?
Often the short-termers do not speak English. (Yes, I am a stupid American who only speaks English.) Ergo, I cannot hold a simple conversation with these diverse groups. I cannot ask that they return my flip-flops or request they keep the noise down.
Another huge problem is, I never know when to expect the cacophony. It would be nice if my landlord and/or neighboring landlords would inform me to expect the arrival of vacation renters. That way I could avoid my house at the typically loud times. Clearly, that consideration is too much to expect. If 6-7 people show up at 1:30 A.M. and begin the move-in process, I am woken and cannot sleep for hours, until they quiet down. I stayed in a hotel a few months ago – just for one night – because I needed refuge from one particular group of renters who partied every night. That is ridiculous. I pay a lot of money in rent yet left my own home to get a decent night’s sleep.
I am also concerned about how these vacation renters are screened. I am constantly worried for my safety and my belongings. My landlord is rarely on the premises. The monetary exchange must happen on-line. As I noted above, there are various sites that handle these transactions. The screening process (or lack thereof) is extremely troubling.
I cannot keep calling the police with nuisance complaints. The LAPD is too busy to deal with these situations. Further, I cannot predict when the nuisance issue will occur or how long it will continue. I’ve witnessed law breaking on a consistent basis: trespassing, stealing (borrowing?) of property, littering, public drunkenness, illegal parking, excessive noise, drug use, improper recycling, and twice – not joking – public urination on the front lawn. This is all unacceptable.
The Marina Peninsula is not zoned for this type of activity. To whom should I address my complaint? My landlord ignores my complaints. The L.A. Housing Authority opened a complaint but explained, ‘while this activity is indeed illegal, it is too difficult to catch or enforce.’ I’m sorry; that is insane. If the activity is illegal, the city MUST enforce the law.
This is a much larger problem than my one unit. Short-term/vacation rentals are ‘popping up’ all over Venice and Marina Del Rey. Clearly, these landlords are operating as illegal commercial entities. Why doesn’t the city enforce the law?
The upstairs unit may be a rent controlled. If so, it is, and there is an exclusion from control based on owner occupancy, there is a continuing violation of the Rent Stabilization Ordinance.
Hi Chris, I am currently going through the same thing. My landlord is making my life a living hell and has doubled my rent so I will move out. He refuses to fix things in my apartment (i.e. torn carpet, broken dishwasher, etc.). I am being constantly harassed by the property manager and feel like I am living next to a hotel. For the high rent that I now pay, it is hardly worth it being I have to listen to people coming in and out and all hours. I recently received a flyer stating that Mark Lipman is running for VNC Vice-President to end this problem. I would highly recommend you vote for this guy. You can read more about it at Marklipman.blogspot.com/p/vnc.html. I hope someone restores our neighborhoods and stops this greedy hotel madness. I also hope that it stops people from getting evicted (or harassed like me) ruining people’s lives.
The Los Angeles Short Term Rental Alliance is an organization founded by people just like you, involved with short term furnished rentals. We are a community of professional vacation and corporate rental managers, AirBnB hosts, property owners who list their homes on sites such as VRBO and Homeaway, property managers, management companies, and members of the Los Angeles business community.
Our mission is: to organize and unify the vacation and corporate rental community with the purpose of being able to influence new developments in laws and regulations regarding short term furnished rentals, discuss progress in the field and serve as a resource to the short term vacation and corporate rental community.
The Los Angeles Short Term Rental Alliance supports preserving the character of Los Angeles neighborhoods and protecting the quality of life of its residents. As advocates for property rights and neighborhood stability, LA-STRA maintains that homeowners also have a right to provide short term rentals, and encourage that all homeowners and businesses participate in safeguarding the right to do Short Term rentals by joining LA-STRA, educating guests on “good neighbor” code, and paying the City Transient Occupancy Tax.
The LA-STRA goal is to work with the city, county, and state government, the local community and neighborhood councils, and property owners to establish fair and effective regulations and tax compliance for property rentals of less than 30 days.
Working together, we can help Los Angeles formulate a fair and equitable regulation allowing vacation rental owners to thrive as important and responsible members of our communities.
Please go to our website at http://www.la-stra.org to join!
Raine Phillips
Alliance Coordinator
LA-STRA.org
Chris Leavitt, you are, literally, insane and a bold-faced liar. You are exactly the reason so many of us are moving our units to short term rentals. I have rented out an apartment on our property the past 8 years to various psychotic individuals like yourself and finally got fed up with them and their “I know my rights and will stay as long as I want,” attitudes. I’ll leave my unit vacant forever before I rent to a “permanent” tenant again. Let me restate this; I WILL TAKE MY UNIT OFF THE MARKET AND LEAVE IT VACANT BEFORE I RENT TO LONG TERM TENANTS.
First, Chris, you are completely off-base regarding short term renters. In fact, they tend to mostly eat OUT and spend very little time in the unit. Think about it, do you stay inside your hotel room when you go to Disneyland or other vacation destination? Of course not. Venice Beach is one of the greatest outdoor playground destinations in the world and all of our guests can’t wait to enjoy it. For the most part, they arrive quietly, drop off their bags, and head out to have fun. My neighbor has been renting through Air BnB and VRBO for almost 18 months and most of our neighbors don’t even know! As for parking, how is a short term renter any different than a “regular,” long-term occupant? Do long term renters suddenly not need cars or parking? In fact, most of my renters (thus far over the last four months I’ve been renting) have arrived in a single vehicle or dropped off from the airport, meaning FEWER cars and traffic. Oh, and they speak a da English just fine, dude. Of the two dozen guests we’ve had so far, every single one has been overly clean, courteous, and friendly in the extreme.
I’d love it if these discussions would address things like, oh, I don’t know, OUR PROPERTY RIGHTS? Like, for example, my two neighbors who lost thousands of dollars when their crazy tenants simply stopped paying rent, found some shady lawyers, and stayed for endless months for free before trashing their places on the way out? How my own nut job tenant moved her boyfriend in and adopted four pets without so much as asking and then refused to pay another dime? How they swapped out the water saving shower head and installed a fire hydrant that wasted hundreds of gallons a year? How they complained constantly about my slow internet connection that they didn’t pay for then tried to blackmail me about turning me into the city for doing some electrical wiring in my main house without a permit (the joke was on them – I did get the stupid permit).
The fact is, these short term rentals are subject to the same market forces as everything else. They are being rented because there is a demand – pure and simple. Eventually, there will not be enough demand to meet supply and short term renters will have to compete just like anyone else (lowering prices, offering better amenities, etc.) and many will find it more worthwhile to rent to residents at market rates. With every single new thing everyone gets riled up and predicts gloom and doom, but to try to slow or stop it will only cause more acrimony and resolve little.
Please contact Raine@la-STRA.org to learn more about the Los Angeles Short Term Rental Alliance.
Ian, clearly you need a vacation. Chris is right. Everything he says is logical. You, on the other hand, are very emotional for no reason whatsoever. You obviously feel you are above the law and your tenants have no rights whatsoever. I bet you even do construction without attaining permits and also go through your tenants mail – a federal crime. Chris is a long term tenant that has obviously been a good tenant but his landlord is disrespecting him in every way imaginable. I can’t wait for you to be fined and out on your own ass trying to find somewhere to live in your imaginary world of vacation rentals. Bad karma.