The debate over Airbnb legalities has waged on in Los Angeles for well over a year. There has been widespread debate over things like unpaid rental taxes, improper zoning and question over whether these types of rentals can be limited in certain areas. Last June, the city council met to discuss these and many other issues related to short-term rentals.
Their first finding upheld the previous ruling on the matter. Airbnb and other methods of home sharing are illegal under the letter of the law in Los Angeles. When a homeowner rents a unit for less than 30 days they are committing a crime. The exception to this being units previously zoned for use as a hotel or bed and breakfast.
Despite the legality of Airbnbs, thousands of residents throughout the city are knowingly committing this crime. The website Inside Airbnb continuously pulls data from a variety of home-sharing sites, and they found that there are over 20,000 listings on Airbnb alone in the city of Los Angeles. What has been posed by the city counsel is to create a new law that legalizes and regulates short-term rentals. This might sound like a win for Airbnb, but that might not be the case.
The new regulations being proposed by the council are, in fact, very strict. The biggest part of these new regulations comes in the form of collecting previously missed tax revenue by the city. Angelenos renting their home or even one room in their home for short stays must, by law, pay the same lodging taxes as hotels. In the past city tax officials have been unable to designate who is renting and not paying. Airbnb proposed a deal where they collect these taxes and hand them over to the city of Los Angeles.
It has been suggested that the city of Los Angeles could generate as much as $5 million in tax revenue just from this one revenue stream. Los Angeles has outlined their plan to use that money to help pay for homeless programs.
The relatively new industry of short-term home rentals is one that has created debate throughout the country. Many cities are taking steps to ensure that home sharing is safe, legal and profitable. Los Angeles is one of the largest cities trying to create regulations that are equitable. Critics of Airbnb rentals argue that when cities like Los Angeles take money from the rental companies they are essentially validating the illegal activities of un-zoned short-term rentals.
In August Los Angeles lawmakers decided to delay the negotiation of an official tax deal with Airbnb, even though Mayor Eric Garcetti had already included the proposed $5 million in revenue in the city budget. It is anticipated that, during the 2017 calendar year, city officials will finalize negotiations with Airbnb and other home sharing services to collect the 14 percent tourist tax owed to the city by renters.
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