What’s Happening in the Short Term Los Angeles Rental Market?

I am sure you have heard that Santa Monica has voted to ban rentals of less than 30 days in the City. Homeowners who live on the property can still have short-term renters but must be on-site, have a business license and will be subject to the 14% hotel tax. This new law is due to come into effect 30 days after passage by the Council.

West Hollywood is the next city rumored to attempt to pass a ban on these short-term rentals, but if the voting goes the way it did in the Silver Lake and Venice communities in 2013, it does not look good for the bill’s supporters.

Enforcing a bill like this city-wide would be impossible, and it is unlikely the movement to ban these vacation rentals will retain much steam. The majority of complaints are from neighbors worried about disruptive behavior and noise, not the hotel industry, which does not see companies like Airbnb as a huge threat. What they would like, and what makes total sense, is for the homeowners to be taxed, providing a new revenue stream for the city. Also this allows many struggling homeowners to stay in their homes and avoid possible foreclosure, a good thing for the economy.

Then we have potential home buyers who will not be occupying the property full-time and would like to derive income while the home is empty. They will think twice before purchasing, and this affects the higher end housing market.

Many condominium associations do not allow units in their buildings to be rented out for the first year or two after purchase and have a quota on the amount of rentals allowed. They also generally do not allow rentals of under one year, so there is a shortage of regular rental properties in Los Angeles. To this end, what definitely should be regulated is landlords who are in the regular rental business, holding rental properties open in order to get more money from short-term renters.

But the homeowner who is trying to make ends meet should not be prevented from doing what it takes to stay in their homes, and one can only hope that this is the side of the argument that is going to prevail.

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