The Big Airbnb Question

 To Airbnb or not Airbnb, that is the question.  AND also if it’s legal.

Airbnb

Image courtesy of airbnb.com

Seems like everyone we talk to these days either wants in on the Airbnb action or has a strong opinion about it.  Certainly it’s been a hot button topic locally where it played a recent role in elections for the Silver Lake and Echo ParkNeighborhood Councils.  With so much chatter lately, we wanted to get the skinny on what was kosher and what was prohibited in the City of Los Angeles… And immediately fell down the Airbnb rabbit hole. From what we discovered, it’s a tricky question to answer.

Alan Bell, the Deputy Director of Planning, released a memo back in March outlining the complexities of the short term rental (30 days or less) and basically said there are three commercial zones where a short term rental “may be” allowed.  They are the RAS4, residential accessory services zone, and the R4 and R5, higher-density multi-family residential zones.  He goes on to say the “rules are complex” and in “some cases” they are allowable with a Conditional Use Permit.  Oy vey!  So much for getting to the bottom of that!

I would hazard a guess that very few of the Airbnb properties out there fall inside those zones but what actual enforcement looks like is hard to tell.  The conversation around Airbnb is further complicated by the rent control aspect in the City of LA.  Residential buildings occupied prior to 1978 with two or more units fall within the ordinance… ie: you can’t boot a tenant without good cause.  Ever.

So, we called the Los Angeles Housing & Community Investment Department (nice name) to get some guidance and were told that properties which were covered under the rent stabilization ordinance would not be subject to rent control laws until the term hit 30 days or more.  Then, we called a second time and were told it didn’t make a difference if the term was under 30 days, if money is exchanged for residential housing that is covered by rent control, it would fall within the rent stabilization ordinance.  Uh…  Ok, thanks for the conflicting information?

Next step?  I started reading through the actual ordinance and it looks like the 30 days thing is a thing but maybe only for properties that aren’t normally subject to rent control and… Clearly, I’m no attorney.  So, we searched further and found this article by an actual attorney, Anthony Marinaccio, and here is what he had to say…

“Some particular issues may also arise in cities with rent control, such as Los Angeles. Although single family homes are not subject to the Los Angeles Rent Stabilization Ordinance, if you rent your home by the bedroom, rent control could apply if residents live there for more than thirty days. This could have an unintended consequence that a landlord of a short term rental could not actually evict a tenant without cause.

Also, you should check your insurance policy to see what may or may not be covered when renting on a short term basis. Your insurance carrier may find that your home is not owner occupied or that you were running a business out of your home, in which case, your insurance policy would need to be modified.”

So, basically, it’s a probably-not-legal, very-likely-prohibited, rent-at-your-own-risk kind of situation. Which is a bummer for many people we know who love Airbnb.  It’s going to be interesting to see how the Airbnb conversation develops so, stay tuned!