In the face of increasing city regulations and mounting concerns over Los Angeles' housing crisis, Airbnb hosts are discreetly cashing in, with rates reaching record highs.
According to data, a considerable number of Airbnb homes in the city are functioning without required registrations, leading to increased anonymous interviews among hosts. "This is my main financial lifeline," said a host who manages three listings, "One isn't sufficient."
Revenues have soared beyond pre-COVID levels, reaching an average of $17,654 per host in 2022. Airbnb spokespersons confirm that L.A. hosts collectively amassed $375 million last year. Daily rental prices have surged from $152 in 2019 to $244 in 2023, a trend resonating across the hospitality industry. Despite the steady demand, the number of listings has plummeted from 16,973 in August 2019 to just 7,360 today, largely due to stringent city laws and reduced supply.
The decline partly stems from Los Angeles' Home-Sharing Ordinance, effective since 2019, which restricts short-term rentals to primary residences. Enforcement has been effective; total listings have plunged over 70% across all platforms from 2019 to 2023. Despite this, numerous hosts are sidestepping the law, and last year, reports indicated that 22% of listings violated the 180-day rental limit.
Peter Dreier, a professor at Occidental College, warns that the short-term rental boom contributes to L.A.'s housing and homelessness crises. Meanwhile, Los Angeles collected nearly $34 million in transient occupancy taxes last fiscal year. Some suggest the city could generate even more revenue by penalizing illegal listings, which McGill University's report suggests could range from $56.8 to $302.2 million in 2022.
Critics like Randy Renick of Better Neighbors LA argue for robust enforcement to transition properties back to long-term rentals. He cites Santa Monica and New York City as role models for effective regulatory practices. Despite the complexities and challenges, Frank Tai, an Airbnb host, confirms that compliance is rewarding but arduous. "It's highly profitable, which is likely why many are skirting the rules," he said.
