L.A.'s Airbnb crackdown leaves some unable to make their rent

We learned recently that Los Angeles is preparing to vote on a new set of government regulations designed to significantly crack down on Airbnb hosts, similar to the regulatory passage enacted in Boston this year. The proposed rules include limiting the number of nights that hosts can rent out a room or other space, limiting rentals to properties where the host actually lives and possibly a minimum number of nights per stay. All of these are designed to make it nearly impossible to act as a host with the gig economy service.

Residents attended a meeting last week to express their concerns, with some of them describing how Airbnb was the only way they were able to continue living in one of the most expensive cities in the country. Rather than some group of greedy real estate “cheaters,” these were families who probably will have to leave the city, if not the state if that source of income is cut off. (CBS Los Angeles)

There was a hearing Thursday where both sides got to speak. About 100 people showed up and, at times, it got heated. Chloe Prentoulis and her husband use Airbnb. For the past seven years they’ve rented out a small back house behind their Venice home and the money is desperately needed.

“It’s money that pulled my husband and I through,” Prentoulis says, “when we lost our incomes at the same time. It’s helped me afford medical treatment.”

Cooper Bates also turned to Airbnb when he changed jobs and his daughter went to college. He rented out two rooms in his home at least four nights a week. He says it’s changed his life.

“It made it absolutely possible to pay the fees for college,” Bates says.

Having written about this topic before, I’ve received quite a bit of feedback from both sides. And I’ll confess that some of it has changed my outlook over time. It’s clear that some people are not using the service as it’s normally advertised, buying up (or renting) apartments, condos, and houses for the sole purpose of renting them by the night. This has led to understandable consternation among neighbors who move into one of these buildings with the expectation that they will have, well… neighbors. People who are there for extended periods of time, if not permanently, and may turn out to be good neighbors or even friends. Tourists coming in for a couple of days don’t fit that description.

But there remain a much larger number of people like the ones who spoke at that meeting in Los Angeles who have found Airbnb to be a lifesaver. They’re not the only ones. We previously looked at the stories of teachers (always a notoriously lower income profession in large, expensive cities) who similarly couldn’t get by without being able to rent out a room or guest house.

But none of this addresses the question of whether or not the previous class of high volume renters are actually doing anything “wrong” or whether it merits government regulation. There are leases available for apartments which are rented out for six months or even one month at a time. Why is it any different if the rental period is a week or even a couple of nights? Yes, that may not be what the other tenants in the building thought they were signing up for, but the space is still serving as a rental.

The excuse being used by opponents (which is eerily similar to what we’ve heard in every other city doing this, almost as if there is an agenda being passed around) is that Airbnb is “taking rental properties off the market” and raising rent prices. That’s because there is a demand for rental space, both short term and long term. The market is responding to that demand. If there aren’t enough apartments available to meet demand, prices go up. But it also opens the door for people to construct more buildings and create rentals to meet the demand. But that’s only assuming that the state and municipal government haven’t imposed so many regulations that nobody wants to take the risk.