Report Finds Illegal Vacation Rentals Jump 25% In LA, With Less Enforcement From The City

Mar 24

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Three years after the city of Los Angeles enacted new regulations for vacation rentals on websites such as Airbnb, the city’s enforcement of the law has declined — even as researchers say the number of illegal listings is growing.

Better Neighbors Los Angeles published a report Friday that found non-compliant listings increased an estimated 25% from November 2021 to October 2022 compared with the same period a year earlier.

While the number of illegal listings grew, the city issued 54% fewer warning letters to non-compliant hosts and levied 85% fewer fines, according to the report.

The city has “actually identified more non-compliant listings… but the rate of enforcement went down," said Allison Kirste, a policy analyst and advocate with Better Neighbors L.A. "Despite this program being in place for several years now, enforcement doesn't seem to be increasing and non-compliance does.”

Better Neighbors Los Angeles published a report Friday that found non-compliant listings increased an estimated 25% from November 2021 to October 2022 compared with the same period a year earlier.

While the number of illegal listings grew, the city issued 54% fewer warning letters to non-compliant hosts and levied 85% fewer fines, according to the report.

Airbnb took issue with aspects of the report’s methodology and offered this statement via a spokesperson:

“Airbnb’s first-of-its-kind compliance system has helped the City enforce its home sharing ordinance, and we will continue to work closely with city staff to ensure its effectiveness and to support efforts to encourage more platforms to adopt similar tools that promote compliance.”

Advocates say illegal vacation rentals sap affordable housing

Better Neighbors L.A. — a coalition including tenant advocates, housing nonprofits and a local hotel workers union — says its goal is to bolster the city’s short-term rental law. The group cites affordable housing losses, neighborhood nuisances caused by scofflaw hosts and harms to hotel industry workers as reasons to crack down on illegal vacation rentals.

The new report drew on data collected by a city contractor tasked with monitoring short-term rental platforms. Airbnb has entered into a data-sharing agreement with the city, but other companies have not. The city attorney’s office sued Vrbo last year over routine flouting of the city’s home-sharing ordinance.

Officials with the city’s planning department did not comment on the report’s findings, but said when they find apartments violating the rules, they refer the case to the city’s housing department for enforcement. We reached out to the housing department, but did not receive an immediate response.

L.A. city councilmembers have expressed frustration with the apparent lack of enforcement. Councilmembers Bob Blumenfield and Marqueece Harris-Dawson filed a motion late last year calling on various departments to report back on plans to investigate and fix any shortcomings.

How Airbnb hosts allegedly break the law

Under the city’s rules, hosts must register with the city and display their registration number in online listings. But researchers have found that often, those registration numbers are expired or don’t match any valid number in the city’s system.

Hosts use a number of strategies to evade the law, researchers say. For example, hosts may falsely claim to live in the home they’re renting out (hosts can only list a primary residence under the city’s rules). Or they may falsely advertise their city of L.A. listing just across city borders, such as in West Hollywood, where the law doesn’t apply.

In some cases, hosts list their unit on Airbnb as a “long-term” rental, only available for stays of 31 days or longer. Such listings are not subject to the city’s law. To circumvent the rules, hosts sometimes direct travelers who inquire about shorter stays to book through other platforms.

Less than $10k in fines paid last year

Hosts who break the law can be fined $500 per day. But the Better Neighbors L.A. study found the city levied just $57,128 in fines last year, and hosts have paid only $9,827 of those fines.

Prior to this report, Airbnb officials have said the company is in close contact with the city and acts swiftly to remove non-compliant listings flagged by the city.

Recently, a separate study from a McGill University researcher found that nearly half of short-term rental listings on platforms such as Airbnb and Vrbo were likely breaking the city’s home-sharing ordinance.

The McGill study estimated that 2,500 apartments have been removed from L.A.'s long-term rental market and converted into short-term rentals. The study concluded that this loss has driven rents up across the city by about $67 per month for the average L.A. renter household.

Improving enforcement

The Better Neighbors L.A. study recommends the city improve compliance by imposing more fines, investigating complaints (the study finds most calls to the city’s home-sharing hotline last year were ignored) and hiring staffers dedicated to enforcement of the law.

Officials with the city’s planning department have said 12 staff members are dedicated to home-sharing ordinance compliance, and that the program is “under-resourced.”

Better Neighbors L.A.'s Kirste acknowledged city officials are stretched thin, but she said they could be taking a smarter approach to enforcement.

“Improving their data collection is a really big one,” Kirste said. “If Airbnb can enter into this data-sharing agreement with the city, where they're providing live data about which hosts are non-compliant, that's something that every other platform can do too.”

Hillary Andrews