Airbnb and Los Angeles have been battling for more than three years over the rental unit regulations and home sharing. The tide now seems to turn in Los Angles. On Tuesday, December 11, Los Angeles city council unanimously voted to approve an ordinance that puts more restriction on the rental hosts.

The new ordinance in LA is set to go into effect in July 2019 and applies to the entire city of Los Angeles including Venice, Hollywood and other hot spot areas. This law particularly limits the number of days property owners can rent their residence through Airbnb and other short-term housing platforms, such as HomeAway and Booking.com.

This is the first attempt of the city to legalize as well as crack down short-term rental in Los Angeles and critics believes that this will create conflict in the neighbourhood and will worsen the housing crisis.

When the new bill is made law, hosts will only be allowed to rent out their primary residence in which they will need to have been living there for a minimum of six months of the year.

The new short-term rental rules

  • Rent controlled properties will not be eligible for short-term letting
  • Licenses to rent under the new short-term letting rules will cost $89
  • Each host will have a maximum of 120 days per calendar year to rent their property
  • The 120 days can be extend using the “Extended Home-Sharing” option. This will allow hosts to rent their property for 365 days, at a cost of $850 for the license.
  • Any hosts who obtain more than 3 citations will have the license revoked.
  • Only one home may be used for short-term rentals at a time.
  • Additionally, a temporary structure such as RVs and trailers are banned from renting.

One of the city council members Mike Bonin says that the new ordinance is a means of striking a balance between host accommodation sharing their home to earn extra income and punishing irresponsible hosts running “rogue hotels”.

Experts believe that the recent action by the LA city council is the best way of addressing the current housing crisis. Most believe that Airbnb is taking homes away from permanent resident and putting these restrictions are the best way of addressing this issue. Besides, the new regulation has not entirely banned sharing of homes for those “who want to make their ends meet” Bonin said. The law only restricts bad rentals and those running “rogue hotels”.

Most people believe that Airbnb has helped them pay off their mortgage and the recent action preventing owners from renting out will not put the units back into the market.

Although this new law is seen as a setback for Airbnb hosts, Airbnb is advocating for the city official to have a similar ordinance that regulates vocational rentals and units that are not host’s principal residence. This motion has been introduced by council members Herb Wesson and Harris-Dawson.

The outcome could have been worse, this might have been eased by Airbnb’s announcement last month that they had collected over $100 Million in Taxes for the City of Los Angeles since August 2016.