Residents in trendy neighborhoods like Venice and Silver Lake have been complaining about Airbnbs for years now—they say the company makes it too easy for landlords to illegally turn their rental units into hotel rooms, driving up rents and making residential neighborhoods into tourist zones (which is completely outlawed by Los Angeles zoning codes and the codes of most adjacent cities). Airbnb has always refused to release any exact information on its units, but now a study from the Los Angeles Alliance for a New Economy has dug up the facts and it's more dramatic than anyone could have guessed: just nine LA neighborhoods account for 73 percent of the money Airbnb makes in the region. And rent in those neighborhoods is growing much faster than in other places.
LAANE's work usually focuses on labor issues, and they set out studying Airbnb to find its effects on hotel workers in Los Angeles. While they did find some evidence that the company puts pressure on decent-paying hotel worker jobs (replacing a fraction with low-paying domestic worker jobs), they found it has a much larger effect on a much larger group: renters, who make up more than half of LA's population. Their report explains: "AirBnB has created a platform that allows landlords to pit tourist dollars against renter dollars. Landlords can potentially earn significantly more money by converting traditional rental stock into AirBnB units, as many appear to have done."
Airbnb started as a booking site for homeowners or even renters to rent out rooms to generate a little extra cash, and that's one argument the company makes to justify its law-flaunting. (Airbnb takes three percent commission from each of its hosts and between six and 12 percent commission from guests.) LAANE's report found 8,400 hosts in LA with 11,401 units; about 90 percent of those were whole units, and in many cases, lessors had multiple whole units up for rent. That 7,316 rental units they say are now off the incredibly tight LA rental market.
And the places Airbnb is most lucrative are, naturally, the places where the market is tightest—vacancy rates in the most lucrative neighborhoods average 3.5 percent.
Rents in these desirable neighborhoods are already high, but are driven even higher by the Airbnb pressure; LAANE found median rents in those neighborhoods are on average 20 percent higher than the city's median.
Venice has been hit particularly hard—12.5 percent of all units there are now Airbnb rentals, which translates to 360 units per square mile in the tiny 'hood. If they're not being forced out by the crazy rents, they're forced to live next to de facto hotels. In one historic building, The Waldorf, the owner has been changing units over to Airbnbs as soon as they become vacant and residents "have felt increasingly unwelcome in their homes [and] believe their landlord is no longer performing basic maintenance on their apartment because they are not as profitable as the tourist-serving units." (The report compares this no-oversight conversion to a proposed hotel on Abbot Kinney, which has been in a city review process for more than three years.)
Rents across the region are wildly unaffordable already—the metro has the biggest disconnect in the US between rents and wages, and a shocking number of residents pay more than 50 percent of their income toward rent. When Airbnb prices more high-earning residents out of these nine already-expensive neighborhoods, it ripples across all of Los Angeles.
Airbnb has a very successful lobbying operation based on—no joke—cult recruiting techniques, and the Venice arm has already defeated attempts just to study the matter in Los Angeles. But they can't stay so secretive and so unregulated forever: Malibu has used subpoenas to get information on Airbnbers in the city; West Hollywood is considering banning the practice (even though it's already illegal); and Los Angeles is just now starting to get its act together to consider regulations.
· AIRBNB, RISING RENT, AND THE HOUSING CRISIS IN LOS ANGELES [LAANE]
· Airbnb-Affiliated Lobbying Group Defeats Venice's Attempt To Regulate Vacation Rentals In Los Angeles [Curbed LA]
· 21 Signs That 2014 Was the Year of LA's Rental Apocalypse [Curbed LA]
Loading comments...