WEHOville

City Council Will Consider Allowing Short-Term Rentals Where Owner or Tenant Is Present

Sat, Jul 15, 2017   By Staff    18 Comments

airbnb, tripadvisor, expedia
The West Hollywood City Council will consider on Monday whether to amend the city’s strict ban on short-term rentals to allow them in homes where the owner is present and to impose the city’s hotel room tax on those rentals.

Allowing that practice, called “hosted home sharing,” would address the concerns of some residents who have testified before the council that they depend on the revenue they get from renting out spare rooms to visitors. It also would address the concerns of other residents who complain that travelers staying in homes where the owner or tenant is away make too much noise or otherwise disturb their neighbors.

The city’s Department of Public Works, whose Code Compliance Division enforces the ban on short-term rentals, recommends the change for a two-year period, after which its impact would be analyzed to decide whether to make it permanent. In a report to the City Council, Public Works recommends the following:

— Home sharing be allowed only for units that serve as the host’s primary residence. The host must live at the residence for at least 270 days per year.

— Hosts must occupy the residence during the guests’ stay and be able to respond in person within one hour of being contacted by city staffers or a law enforcement officer.

— Someone wanting to rent out a room in a condo or apartment must get permission from the property owner or the condo homeowners association. “Staff recommends allowing the applicants to self-certify that they have obtained the requisite permission. Requiring an applicant to submit a notarized document can be time-consuming and may deter participation.”

— Hosts be required to obtain a license or permit, renewable yearly, at a fee low enough to encourage participation in the program. The license could be revoked after two or more noise complaints.

— The host pay the same room tax as do hotels.

— Advertisements for rooms include a city license or permit number and the rooms must meet some minimum safety standards and include smoke and carbon dioxide detectors and a fire extinguisher.

— Hosts keep a log of all guests, dates of their stays and the rents paid by the guests for a period of three years. These logs should be made available to the city for inspection upon request.

— Hosts be held accountable for the actions of their guests and liable for all costs associated with the enforcement of the code.

— The number of people allowed to occupy a hosted apartment or house be limited to two people per bedroom and an additional two people. Thus a studio apartment could have only two occupants and a one-bedroom could house no more than four.

The ban on unhosted short-term rentals, which would be continued, is designed to prevent owners of housing from taking it off the city’s already small residential market and thus contributing to rising rents. That ban also is intended to restrict competition with local hotels by unlicensed property owners who don’t pay the hotel room occupancy text or necessarily meet the safety requirements of hotels.

In its report, Public Works defines the three types of short-term rentals (STRs), two of which typically lack on-site hosts.

“First, there are the vacation rentals,” the report explains. “Vacation rentals are listings for units that are used almost exclusively for short term rentals. The unit is not a primary residence for a long term tenant. These are the types of listings that generally cause the most consternation for neighbors, local hotels, and governments.

“The other type of STR listing is Home Sharing. These listings are for units or parts of units that serve as the primary residence for a long term tenant. Under the Home Sharing category, there are two subcategories; Hosted Home Sharing and Unhosted Home Sharing. Unhosted Home Sharing occurs when a host rents their primary residence to guests but does not occupy the residence during the guests’ stay. These listings are generally for the whole unit, where the guest has the entire dwelling unit to themselves. Hosted home sharing is where the primary resident occupies the dwelling at the same time as the STR guest.”

The City Council passed an ordinance in 2015 to make clear that all rentals for fewer than 31 days are illegal. The city’s short-term rental ordinance also bans advertising such rentals on sites like Airbnb.

airbnb, short term rentals

Despite that, the short-term rental market has continued to grow in West Hollywood. A study conducted for the city by Host Compliance, a firm that monitors online short-term rentals, says that as of March 2017 there were 1,012 short-term rentals available in West Hollywood. The city has roughly 24,500 housing units. That number was compiled by reviewing the 15 most frequently used short-term rental websites such as Airbnb, TripAdvisor and VRBO.

The study showed growth from May 2015 through March 2017 in the number of unhosted short-term rentals, which made up the majority of all short-term rentals. There was relatively little growth during that period of private rentals, in which a host rented out a private room in his or her apartment, or shared rentals, in which the guest shares a room with another person. “The difference between the two is like renting a bedroom versus renting a couch,” says the Public Works report.

The report cites a 2015 analysis by the L.A. Alliance for the New Economy, a group that lobbies for short-term rentals, that says WeHo ranked No. 6 on Airbnb’s list of top revenue-generating neighborhoods in greater Los Angeles. “An estimated $7 million in revenue was generated by STRs in West Hollywood in the past 12 months,” the report said, noting that about 86% of that revenue came from rentals of entire apartment or houses.

Public Works estimates 27% of short-term rentals generate almost 77% of all short-term rental revenue. “As of March 2017, this 27% of hosts are estimated to have generated $5.3 million in revenue out of the total estimated revenue of $6.96 million in the entire city,” the report says. “This is a substantial incentive for someone to convert long-term rental units into permanent short term listings.”

The advantage to a property owner of renting out an entire apartment or house is clear. “It only takes 81 days of whole unit short term rental use to generate the same amount of revenue as what a rent-stabilized tenant would bring in (over the course of a year),” the Public Works report says. “It takes, on average, 166 days to do the same (when) compared to a market rate tenant.”

The report says the nightly rates for STR listings have remained relatively stable, with the average for a whole unit about $180 a night. That average includes one-bedroom units at an average of $140 a night and two-bedroom listings at about $220 a night. “With West Hollywood nightly hotel rates averaging $262.00 in 2016 and $271.00 in 2017, it is clear that whole unit STR listings can easily undercut local hotels,” the report says.

It notes that applying the hotel room tax, which is 12.5%, would generate about $135,000 that could be used to pay for website scanning services that can identify illicit short-term rentals.

That service would be important, given the difficulty faced by Code Enforcement in identifying local short-term rentals on websites. There are a lot of those sites, and most make it difficult to determine where a property actually is located.

The report says that as of March 15, the city had received 272 online complaints about short-term rentals, several of which were for the same address and all of which were about unhosted rentals. “From the complaints received, staff has generated 191 cases and issued warnings for all of them. (Twenty seven) of these cases have been closed, either for compliance or because staff was unable to substantiate the complaint. (Twenty nine) citations have been issued for a total of $21,513.50. Of this amount, the city has collected $18,743.00, an 87% collection rate.

The City Council will consider the proposal at its meeting on Monday at the City Council Chambers, 625 N. San Vicente Blvd. south of Santa Monica. The first part of this Monday’s meeting, from 6 p.m. to 7:30 p.m., is focused on the city’s community development plan work plan. The ordinary meeting will begin at 7:30 p.m. Parking is free, with a ticket validated in the lobby, in the five-story structure behind he Council Chambers.

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18 Comments

  1. RandyMon, Jul 17, 2017 at 9:56 pm

    blueeyedboy, sorry, I misread your comment. I thought you said “insanity.” Anyways, glad we agree on something.

    I don’t know how the vote went tonight. And it is not even in my interest for them to change the ordinance, as it will create competition for me, living across the boarder in LA. I just think it is WRONG, and over-reaching, just like you do.

    I also agree that condo HOA’s should decide who they want in their buildings, and under what terms.

    I’m more hesitant about apartment owners. I fear that some of the sketchier ones might incentivize their tenants to do this, and look for kickbacks. That would cut into the housing stock, and leave less apartment space on the market to rent.

    I think this should be restricted to people who own and live in their properties, only. That includes single-family units, duplexes, triples, four-plexexes, etc., and condos, if the HOA approves. But only hosted rentals (not someone giving up their condo on the market as a full-time AirBnB, for example).

  2. Bill G SkywatcherMon, Jul 17, 2017 at 4:25 pm

    I can definitely understand reasons for hosted rentals for single occupancy homes. But foisting turning apartment buildings into hotels goes too far. Of what use is city government if it can’t protect its citizens against abuse? And it clearly abuse when strangers start to invade your home.

    Under no circumstances should an apartment be used for a short term rental. It is clearly abuse for every other tenant in that building.

  3. blueeyedboyMon, Jul 17, 2017 at 4:07 pm

    Rick Watts, I don’t see why the landlord or HOA needs to have anything to say about it. If you want to extend that policy to the logical extension, EVERY tenant would need to inform their landlord of their guests. I have a friend staying with me now for a month, and I have no intention of informing management. He is my guest. Friends are coming from NY in September for two weeks. In my building a neighbor has a girlfriend who maintains her own apartment at another location, but stays here with him every night. Other neighbors have short-term guests, not to mention the people who bring a virtual stranger home with them for the night from a bar. One neighbor’s friend has a spare key to the building. No one who uses a spare bedroom to make some money will have any more affect on their neighbors and the building than neighbors who have personal guests come into the building every single day. One of the most foolish complaints I heard about an airbnb host was that, “it was like a hotel here, with people coming and going all the time.” No host is going to have more than one guest(s) a day, and most of those would stay multiple days. At a hotel there would be MANY guests coming and going in and out of their building in a day, because the hotel is renting many rooms. One of my neighbors has several friends who come to her apartment every single day. Now someone might have a more reasonable complaint about her, in that there is a lot of traffic to and from her apartment, but her guests are never a problem, in terms of noise or damage to the property. She’s a nice, thoughtful girl who happens to have a lot of friends who are just as nice and thoughtful. As I see it, she is likely to create more traffic to this building than any tenant who hosts airbnb guests.

    AirBnB has an insurance policy of up to a million dollars to cover any damage a guest creates so that the tenant and the building owner is covered “just in case” something happens. The cost of that insurance is imbedded in the fee that the traveler pays per night. I know a host who filed a complaint for a minor damage to a small kitchen appliance by a guest, and airbnb covered it with no questions.

    The only valid complaint I have heard about this service that makes sense is with non-owner/tenant presence in the home with guests. But that doesn’t apply here, now does it?

  4. ObserverSun, Jul 16, 2017 at 10:46 pm

    Code compliance can’t be expected to be a part of this experiment. They can barely keep up with the mundane nature of repetitive noise nuissance cases and compliance with Mills Act violations. LOL.

    Putting code compliance in charge of the hen house will be very interesting. We’ll have cross bred and hybrid situations that folks never dreamed of. Relaxing all boundaries of living circumstances and we can start marketing WeHo as The Giant Commune. Who knows what will the sponsor of this item think of next.

  5. Rick WattsSun, Jul 16, 2017 at 7:55 pm

    If in the case of condo & apt buildings the rented is not going to be required to submit an affidavit of permission from the HOA or landlord, I think that upon “self-certification”, a copy thereof should be sent to the HOA (or landlord) notifying them that the tenant has so-stated a self-certification: At least that way, if the self-certification is fraudulent, the HOA or landlord can then contest it and be in a position to properly file a complaint with the city. Otherwise, I see “self-certification” as pregnant with temptation to do so fraudulently.

    This part of the new ordinance clearly needs tightening up. The other thing that concerns me is how this may impact the supply of long-term housing for sub-tenancy: Due to high rents, a large percentage of lower-income residents can ONLY find housing by renting a room if they’re unable to get officially put on a lease. in our 15-unit building, I can identify 4 such sub-tenancies that might disappear from the long-term housing stock–and ours is only ONE such apartment building. Low-income persons are already financially-stretched enough that subtenancy is often the ONLY remaining option short of homelessness. And while their jobs (if they’re working) may not be glamorous, the things they do–ranging from janitorial staff to retail clerks & maids to restaurant support staff–are no less vital to supporting the city’s economy.

  6. LJWilliamsSun, Jul 16, 2017 at 7:43 pm

    Revised.
    Um, Kaycee. This is West Hollywood where there are a LOT of random, anonymous hookups. There are strangers in your building 24 hours a day from people one met at a bar, a hookup app, a social club, etc. At least with airbnb, etc. there are reviews and anyone who doesn’t have stellar reviews doesn’t get booking. It self-regulates itself. Both the hosts and the guests review each other and if either get a negative review they both lose opportunities. There’s a lot of incentive for everyone to be on their best behavior, etc. Accidents can happen to anyone anywhere. The way you’re talking we’d have to ban anyone who was a stranger from ever entering a building. That’s never going to happen. If you want that, buy a single family home. I’m a homeowner and I only support hosted stays. I think non-hosted stays does involve some risk compared to a hosted stay with very minimal risks. The host sharing community is often the best people you can be around.

  7. LJWilliamsSun, Jul 16, 2017 at 7:32 pm

    Um, Kaycee. This is West Hollywood where there are a LOT of random, anonymous hookups. There are strangers in your building 24 hours a day from people one met at a bar, a hookup app, a social club, etc. At least with airbnb, etc. there are reviews and anyone who doesn’t have stellar reviews doesn’t get booking. It self-regulates itself. Both the hosts and the guests review each other and if either get a negative review they both lose opportunities. There’s a lot of incentive for everyone to be on their best behavior, etc. Accidents can happen to anyone anywhere. The way you’re talking we’d have to visit anyone who was a stranger every entering a building. That’s never going to happen. If you want that, buy a single family home. I’m a homeowner and I only support hosted stays. I think non-hosted stays does involve some risk compared to a hosted stay with very minimal risks. The host sharing community is often the best people you can be around.

  8. KayceeSun, Jul 16, 2017 at 2:30 pm

    Observer-good point. This situation could get out of control very quickly, and how will they then put the brakes on?

    Short term visitors create all kinds of problems for the other tenants and aren’t screened like roommates would be. Who’s liable if they have an accident on site? The tenant on the lease? The property owner? Will their insurance company pay for damages caused by people who don’t officially live there?

    If they can’t seem to enforce all of the current violations, how is it going to help things by inviting more problems? What about the increased security risks for other residents of the building, with strangers coming and going?

    And trusting people to use the honor system for permission and payment of taxes?!
    Terrible idea. Anyone who needs help paying the rent in an apartment can get a legal roommate.

    Renting out a room in a single family dwelling is a different story- and should be allowed.

  9. LJWilliamsSun, Jul 16, 2017 at 1:32 pm

    Hosting can also be a social outlet for people who aren’t into the club/L.A. scene. A recent guest of mine from Switzerland was just wonderful. She was a sales executive on her way to Hawaii for a month’s long class in advanced English. She wanted a few days in L.A as part of break from a long, European based flight. She said that if it weren’t for hosting she’d never go out in L.A. on her own. It’s not expected that a host entertain their guests but they sometimes let you know that’s what they want upon booking. My settings are set at no guests are allowed that have any negative rules and agree to a very strict set of house rules. I accompanied her down Melrose place for shopping. We then ate at Gracias Madre (where she spent $ in W. Hollywood and got to eat an all organic meal), took in some WeHo sights and finished the day visiting Greystone Manor (we took an Uber…more money for someone). She said it was the best hosting experience she ever had. I got some needed company as I’m a bit of homebody/hermit myself. She left my place spotless. I don’t get guests often as I prefer my place to myself most of the time, but it was nice to have some kind, European company and extra motivation to keep my place at a hotel level of cleanliness. I provided a service, everyone gets paid a little something in the process. She left loving West Hollywood and will come back whether to stay with me or at one of the fine hotels in the area. Hosting is the way to go like other major cities are endorsing but I agree the unhosted units can be an issue.

  10. ObserverSun, Jul 16, 2017 at 9:32 am

    Economics is not the only measure.

  11. ObserverSun, Jul 16, 2017 at 9:32 am

    Sounds like this is opening Pandora’s box. After a two year test run, how does the city propose to get the worms back in the can? Must EVERY idea require a study? Does anyone in the control tower have vision?

  12. jeffery wardSun, Jul 16, 2017 at 9:18 am

    This is an end around for Sunset, first, if you are dependent on revenue from short term rentals from your property then you are admitting that you are dependent on ILLEGAL revenue, and it is right that responsible property owners have the right to as to who they want in their house as long as they are in compliance with the Codes of our Burg, and since Corporations are people too and they are the legal owners of the Property on Sunset, there would be huge legal challenges to say that if the ordinance was relaxed for on site property owners then Corporations can just put an agent of their corporations on the Property and say they are in compliance, besides, homeowners can already rent their rooms out to long term tenants without changing the ordinance!

    I say NO, I support the West Hollywood Hotels and their owners and employees!

  13. blueeyedboySun, Jul 16, 2017 at 8:24 am

    Oh lordy, Randy, I’M AGREEING WITH YOU!!!!! There has been no more outspoken advocate for this very thing than I, and I have posted my thoughts on the subject here on WeHoVille MANY times. The current policy is the best example of government over-reach I’ve ever seen. It is absurd that any entity could tell me whom I may have as a guest in my own home! I’ve been very clear that I am opposed to such rentals in which the homeowner/tenant is not present, but it is nobody’s business whom I have as a guest in my home, no matter what kind of arrangement I have with them.

    How did you read my previous statement above to mean anything else?

  14. CCSun, Jul 16, 2017 at 4:34 am

    I fail to see how it matters what they decide. People do what they want without consequence anyway. The entire apartment building at 1223 N. Hayworth is being run as an air bnb/hotel and nobody has done a thing despite people reporting it to the city.

  15. RandySat, Jul 15, 2017 at 11:01 pm

    No, bluedeyeboy, as usual, we disagree.

    This is completely sensible. The existing ordinance is completely overreaching, and this “homeowners’s exclusion” has been recognized in major cities, such as Santa Monica, Sacramento, SF and NYC.

    This is the new economy. Responsible property owners should have a right as to who they want in their homes.

    It’s also good for our local economy. I live just across the border, in LA, and can’t tell you how many amazing, respectful, responsible guests I’ve hosted who have told me they couldn’t even visit our part of the city without my room for rent, with hotel rooms averaging around $220-$240 a night.

  16. Shawn ThompsonSat, Jul 15, 2017 at 8:12 pm

    Well how else can they turn those condos on sunset into long term rental like they developer wants? Thats why this is happening 8500 sunset

  17. LJWilliamsSat, Jul 15, 2017 at 8:09 pm

    Hosted short term rental is very reasonable and with hosted rentals both the host and guests are more particular who they stay/match up with and respect the relationship since they are living in the same place for this short time. Many people come to West Hollywood for the first time from all over the world and this city can be overwhelming to new visitors. A friendly, knowledgeable host makes the guest feel secure and introduces them to the best parts of L.A. to visit. It’s a great service when it’s a hosted rental. The hosts are reviewed and if they aren’t top notch, they lose business so there is a lot of incentive to keep your place very clean and to offer a truly professional hosting service while making a little extra to help with living expenses. Hosting has been around forever. My first trip to Europe when I was younger was with a hosting service and it made my trip so much better. We can do the same for our guest visiting W.Hollywood/Greater L.A.

  18. blueeyedboySat, Jul 15, 2017 at 12:36 pm

    WOW!!! Is sanity going to prevail?

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