real-estate-blog

New Vacation Rental Rules Proposed for Los Angeles

According to the Los Angeles Times, City councilmen Bonin and Wesson are proposing new regulations to bar vacation rentals that are not the owner’s primary residence. The proposed new regulation would still allow property owners to rent out spare rooms and to rent out their homes when they are out of town.   Property owners, however, could not rent out any home that is not their main residence.

The obvious goal of the proposed new regulation would be to limit the practice of commercializing residential property – where a company or an individual acquire desirable residential property for the purpose of running a vacation rental business.   The same concerns (long term housing shortage) that spawned the recent harsher Santa Monica regulations are reportedly behind the proposed new regulations.

My view is that the bright line rules banning vacation rentals are rather harsh. While I understand the need for long-term housing is Los Angeles and the apparent housing shortage that need has to be balanced against a current property owner’s rights. Think about current vacation rentals in Venice that may have been in place for years if not decades now being banned.   Outlawing non-primary residence rentals for these long-established vacation rentals would be quite unfair and could negatively affect tourist income that the City of Los Angeles would be wise to continue to collect. It is one thing to change the rule going forward for people who are not currently registered with the city and paying the transient occupancy tax but it is a much harsher rule for vacation rentals already in place. Perhaps a model similar to that in the City of Napa where Napa banned new vacation rentals but allowed the old vacation rentals to remain in place and made their approved status non-transferrable would be a better model.

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