The Los Angeles City Council voted — unanimously — in December 2018 to impose new rules on Airbnb and other online platforms that help property owners rent out homes and apartments to vacationers, and tenant activists cheered the move.
The vacation rental platforms were less happy about the new law.
The Council had debated solutions to the vacation rental problem for more than three years, and finally approved an ordinance that prohibits Short-Term Rentals (STRs) in second homes or investment properties, and allows home-sharing only in a property owner’s “primary residence.” The ordinance is partly an attempt to prevent apartment buildings from being bought up and run like hotels — a process that has been worsening the LA housing crisis.
The new law was scheduled to kick in this past July, requiring Airbnb, HomeAway and other online services to share rental information with the city either by building a computerized tracking system or by submitting spreadsheets. When the online services protested that they didn’t have enough time to build the new systems, the city agreed to hold off until November, to allow the online platforms more time to register their systems.
Airbnb is pushing the city to extend the delay. Late last month, Airbnb expressed support for LA’s new registration law, but complained that “the city is asking platforms to comply with a system that does not yet exist and won’t exist” by the November deadline.
The LA ordinance, which you can download here requires STR platforms to regularly hand over information about their bookings, to help the city enforce its new rules.
From an October 2 article in Governing magazine:
Yeghig Keshishian, a spokesman for the city’s planning department, said that the computerized system was “one method” of compliance — and likely the most efficient one — but the companies “also can share with us a spreadsheet with the relevant information.”
Airbnb argued in its letter that it would be “an excessive burden” to comply with the city’s rules in another way while simultaneously building the computerized system.
Keshishian said that whether or not they reached an agreement with Airbnb, the city “will be prepared to enforce the ordinance come November 1.”
Since Airbnb launched back in 2008, the short-term “home-sharing” model has utterly changed the hospitality industry. Travel industry experts Skift estimated that the global short-term rental market would be generating $169 billion in annual sales by the end of 2018. But the industry is forcing community leaders and elected officials to ask a driving question: Shall we regulate STRs more strictly to preserve local culture and keep local residents from being priced out of housing… or allow STRs to thrive and reap the benefits of increased tourism?
For many communities, the “benefits of increased tourism” are getting harder to identify, while the stress placed on local housing markets becomes ever more clear.
Numerous cities have put strict STR regulations in place over the past decade. In New York, the rental hosts must be present during the rental stay — much like the management staff in a hotel. In San Francisco, city residents may host short-term rentals in the same residential unit where they also live as a permanent resident — in a dwelling unit where they are present at least 275 nights per year. If a property features multiple residential units, an owner may host short-term rentals only in the same residential unit where they also live as a permanent resident. Denver likewise limits legal rentals to the host’s “primary residence,” as do Boston and Washington DC.
What these cities continue to struggle with — as evidenced by the enforcement delays in Los Angeles — is finding effective ways to enforce regulations for an industry that is both relatively new and widely dispersed.
Here in Archuleta County, about 85 percent of the residential homes are located in the unincorporated county — under the jurisdiction of the Archuleta County government. Currently, the County government has placed no “primary residence” restrictions on vacation rentals offered through Airbnb, HomeAway or other online platforms, nor has the County placed a cap on the number of STRs allowed in any given neighborhoods, or in the county as a whole.
The Town of Pagosa Springs likewise has no caps on the number of STRs allowed, within the Town as a whole or within given neighborhoods. The Town does not require a vacation rental to be the owner’s “primary residence.”
Over the past year, both the Town government and County government began requiring STRs to obtain a permit, and pay an annual permit fee. Beyond those requirements, any owner of any residential property is free to convert that dwelling unit into a mini-hotel — unless the property is within a homeowners association that has chosen to regulate vacation rentals.
There may be as many as 1,500 residential homes operating as vacation rentals in the Pagosa Springs area. That would appear to be about 15 percent of the total number of residential dwelling units in the county.
Whether our local governments here will soon come to the realization that an uncontrolled vacation rental industry is ultimately a danger to the overall Pagosa Springs economy — as the city council in Los Angeles did, last year, and as many other communities have done over the past ten years — or whether that realization will come too late, after the damage becomes irreparable, we will have to wait and see.