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LA regulated Airbnb. Now it might relax the rules.

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Hosts could rent out second homes under a new proposal

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Just as Los Angeles starts cracking down on Airbnbs, city officials are looking at loosening the rules to allow hosts to rent out a second home.

Right now, these types of rentals—referred to by the city as “vacation homes”—are banned in the city of Los Angeles. Under the city’s new short-term rental rules, a host has to live in their home for at least six months out of the year in order to list it on Airbnb, VRBO, or any other platform.

But the planning commission voted today to recommend that vacation homes could also be rented out—with hosts allowed to rent out one additional home in addition to their primary residence.

City leaders have heard over and over again from hosts who say vacation and short-term rentals help them pay their mortgages and save for retirement; they “need home-sharing to get by,” Jason Dilts, of the Homeshare Alliance Los Angeles, told the commission.

That’s especially true in the sharing economy, said commissioner Caroline Cho. She said she didn’t “want to penalize people who have invested in the city and want to make a living.”

Los Angeles is grappling with a housing shortage that has driven up housing costs, and that weighed on several commissioners.

“The constituency I’m most sympathetic to are the people living on the streets in tents,” said commissioner Karen Mack. “When I looked at the weather this morning, it was 47 degrees. Can you imagine being in a tent, and it’s 47 degrees? Our challenge as a city is to get those people housed.”

The proposal is aimed at homes that are occasionally occupied by their owners and might be used to house family members visiting or living temporarily in LA. “These types of units would, in theory, not be available for long-term rentals,” says a city staff report.

But not all second-home rentals operate this way. In a complaint filed with the city Wednesday over its enforcement of short-term rentals, the law firm Hadsell Stormer Renick and Dai LLP points to an Airbnb host who has nine apartments for rent in Silver Lake right now. The host’s profile says she lives in Tahoe City.

These are the types of apartment that might otherwise be available to long-term residents. Representatives from SAJE, a South Los Angeles-based nonprofit, and NOlympics LA urged the commission to prioritize long-term leases and more vulnerable populations over visitors and tourists.

Commission president Samantha Millman countered that “there’s no root one cause, no one solution to the issue of affordability.” That includes, she says, building “more housing inventory at every single income level” and enacting “fair and common and sense regulations of short-term rentals.”

Making vacation rentals legal could give the city “more teeth” to regulate them, said commissioner Helen Leung.

The commission’s recommendation is to put limits on vacation rentals, capping the number of days a host can rent to 90 days each year; banning them in rent-controlled buildings; and corking the number of vacation rentals that can be active at any give time, restricting them to 1 percent of the city’s overall housing stock

Only properties owned by individuals or trusts would be allowed. And a “significant” portion of fees and tax revenues would be put toward affordable housing programs.

Tenant advocates called the proposal a “loophole” in the city’s short-term rental ordinance and released a study this morning blasting the city for not “effectively” enforcing that ordinance.

Prepared by the Urban Politics and Governance research group at McGill University and paid for by Hadsell Stormer & Renick LLP, the study estimates that of the 24,600 short-term rental listings active in LA on October 15—before enforcement began—as many as 44 percent had a “high likelihood” of not being the host’s primary residence.

The city began enforcing its new short-term rental rules on November 1. Since then, the study found, “there has been a minimal reduction in the number of listings likely to be violating the city’s principal residence requirement.”

“Most of the commercial operations which the laws are also supposedly targeting appear to have avoided enforcement actions so far,” the study’s authors write. If the city wants to prevent short-term rentals from threatening housing affordability, it needs to step up enforcement, they conclude.

The city has sent warning letters to hosts who are not in compliance and will begin issuing citations and fines in mid-January, says planning department spokesperson Yeghig Keshishian.

“The city is sending out warning letters to any host that is not in conformance every couple of weeks,” he says.