City Hall moves to regulate “short-term” rentals, but now “vacation rentals” are in question

By Gary Walker

Heather Santoro restocks toiletries and other essentials at a home on Rosewood Avenue in Mar Vista, one of several Westside vacation rental properties she operates
Photo by Gary Walker

It may have taken four years, but the city of Los Angeles is closing out 2018 with new regulations for short-term rentals that are expected to take effect on July 1.

The biggest change is that L.A. landlords will only be able to offer their primary residences to tourists via online brokerage websites such as Airbnb, and for a maximum of 120 days per year. With the cost of long-term leases continuing to rise for permanent residents, the city ordinance aims to prevent landlords from taking houses and apartments off the market to cash in on more lucrative short stays by visitors. That’s been a major issue in tourist-attracting neighborhoods such as Venice, and one of the main reasons that many Venice activists had been pushing the city to take action.

However, a new battle is emerging over what some in the home-sharing industry are now calling “vacation rentals” — i.e. second homes and investment properties that have long existed outside the standard residential housing market, which would include many of the beachfront single-family homes in lower Playa del Rey.

“There needs to be a [regulatory] pathway for these types of non-primary, second-home industries,” said Philip Minardi, director of policy communications for Expedia, which owns the online vacation rental brokerage HomeAway.

“Home Away is not a new platform. It has truly become a cornerstone of the economy’s mix,” said Minardi, citing a $2.5 billion annual economic impact of vacation rentals in Los Angeles.

L.A. City Councilman Mike Bonin, among those who led the charge to regulate short-term rentals, cites the need to preserve availability of residential housing. He argues that commercial landlords shouldn’t be able to convert apartment buildings into de facto hotels, but residents who need to generate extra income to stay in their homes should be able to rent out rooms.

When it comes to second-home vacation rentals, Bonin said it was premature to consider specific special exclusions related to the emerging second-home vacation rental question.

“We need to make sure that we can make this ordinance work before we can look at vacation rentals,” Bonin said.

A subcommittee of the council has also advised that a “vacation rental” ordinance be enacted before the new short-term rental rules are enforced this summer.

Heather Santoro, who owns vacation rental properties in Venice and Mar Vista, said she is appreciative of the city council’s “thoughtful and introspective” consideration of the complexity of home-sharing but is dismayed that vacation rentals like hers were apparently excluded from consideration.

“It seems like this ordinance only applies to one subset of rentals and leaves the others in the Wild, Wild West. I was really hoping that they would listen to hosts’ concerns,” said Santoro, who also owns the cleaning service Heather’s Angeles.

Apartments that are subject to the city’s Rent Stabilization Ordinance are excluded from the new municipal regulations, a late adjustment pushed for by Bonin and some of his more vocal Venice constituents.

“That was one of my key requirements. We want to protect people from de facto hotels, rogue operators and speculators that are taking affordable housing off the market,” Bonin said.

Two years ago, a proliferation of short-term rentals, many of them at property owners’ second homes, turned neighbor against neighbor in the traditionally tight-knit neighborhood of lower Playa del Rey known as The Jungle.

Playa del Rey resident Lucy Han welcomes the new ordinance, saying landlords with homes in her neighborhood that are not their primary residences were evicting residential tenants so they could offer those homes as short-term rentals to tourists.

“The new ordinance is good because it does not allow short-term rentals in rent controlled-apartments,” Han said.

Bonin acknowledged that lawmakers will likely revisit and possibly update regulations to tackle the emerging discussion of second-home vacation rentals.

“We’re going to need to tweak and improvise as we go along, as the technology changes and we get new information about how the ordinance is working,” Bonin said.

Meanwhile, Santoro vowed to continue renting out her homes.

“I’m going to continue to operate them until I’m told not to because I don’t believe any clarity has been defined,” she said.

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