Los Angeles officials are considering a pair of Airbnb-backed proposals that would temporarily loosen city regulations on short-term rentals and allow the company to pre-pay a portion of the lodging taxes it collects from tourists. <\/p>\n
If approved by the City Council, the first proposal would allow Airbnb hosts to rent second homes and investment properties on the platform through 2028 \u2014 something the home-sharing giant has long sought, but the city of L.A. has prohibited since 2018. <\/p>\n
The second proposal would involve Airbnb paying some portion of the transient occupancy tax it collects from tourists to the city of Los Angeles ahead of time to assist with the city\u2019s budget troubles. That could generate tens of millions of dollars more for the city per year, according to the company.<\/p>\n
“Airbnb is a committed partner to Los Angeles and its long-term prosperity with not just words, but with action,\u201d said Justin Wesson, Airbnb\u2019s senior public policy manager in California. \u201cThat\u2019s why we have offered to provide tax revenue we already collect on behalf of hosts up front to help fund essential city programs millions of Angelenos rely on.”<\/p>\n
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Both plans appeared in Mayor Karen Bass\u2019 budget proposal for the next fiscal year, which starts in July, and were first reported by L.A. Material<\/a>. Both were initially suggested by Airbnb, according to the company. <\/p>\n Bass\u2019 budget proposal instructs the city\u2019s Planning Department to develop a limited vacation rental program that would sunset by Dec. 31, 2028. <\/p>\n It also instructs city staff to report back with recommendations \u201cto allow the pre-payment of transient occupancy tax in advance of the 2028 Olympics from any payer that wishes to assist the City in accelerating critical infrastructure projects.\u201d<\/p>\n Councilmember Monica Rodriguez, who opposes expanding short-term rentals, told LAist she has concerns about the prepayment plan.<\/p>\n “I don\u2019t know anyone in the country running to prepay their taxes, especially any corporations, and it begs the question as to why,\u201d Rodriguez said.<\/p>\n Pre-paying TOT <\/p>\n Airbnb has discussed this pre-payment concept with city officials, but has not settled on specific terms, a company spokesperson confirmed to LAist. <\/p>\n The company told LAist it would work with city officials to come up with the amounts and timelines for any potential prepayment after the City Council approves the mayor\u2019s budget. <\/p>\n Bass\u2019 office did not respond Thursday to questions about the proposal. <\/p>\n In the current budget year, the city will collect about $297 million in transient occupancy taxes, including $34.5 million from short-term rentals and $262.9 million from hotels, according to the L.A. city controller<\/a>\u2019s revenue forecast. <\/p>\n The Hotel Association of Los Angeles told LAist that hotels, the main driver of bed-tax revenues, have not been part of any conversations about possible pre-payment. <\/p>\n \u201cCity leaders have not engaged hotels on the concept of pre-paying transient occupancy taxes in advance of the 2028 Olympics,\u201d Jackie Filla, the association\u2019s president and CEO, said in a statement. \u201cWe learned of this issue for the first time while reviewing the proposed budget.\u201d<\/p>\n The Mayor\u2019s Office first briefed members of the City Council\u2019s Budget and Finance Committee shortly before the Monday release of Bass\u2019 proposed budget, according to one member\u2019s office.<\/p>\n According to the mayor\u2019s budget proposal, the prepaid tax revenue would be used for curb and sidewalk repairs, park maintenance, street cleanliness and tree trimming. <\/p>\n Airbnb entered into an agreement with the city of L.A. in August 2016 allowing the company to collect and pay the transient occupancy tax on behalf of Airbnb hosts. The company said it has collected and paid more than $370 million in lodging tax to the city of Los Angeles between 2016 and the end of last year, for an average of about $39 million annually. <\/p>\n Before L.A.\u2019s 2018 law restricting Airbnbs, there were nearly 29,000<\/a> estimated active short-term rental listings in the city of L.A., according to the city\u2019s Planning Department. L.A.\u2019s transient occupancy tax revenue totaled nearly $319 million in the 2018 budget year, according to the city administrative officer. That total includes tax remitted by hotels and it\u2019s unclear how much was generated from short-term rentals specifically. <\/p>\n Last budget year, there were fewer than 5,000 homes officially listed on short-term rental platforms, according to the city. L.A. collected $305.8 million in transient occupancy tax. About $272 million of that came from hotels. The other roughly $33 million came from short-term rentals, according to the city controller<\/a>. <\/p>\n Bass\u2019 budget proposal projects $313.5 million in transient occupancy tax in 2026-2027.<\/p>\n More Airbnbs?\u00a0<\/p>\n Airbnb has long sought to change L.A.\u2019s short-term rental rules to allow more homes on the platform. <\/p>\n Last year, Airbnb launched a public campaign<\/a> for its “Vacation Rental Revenue Plan.\u201d The company argues that increasing L.A.\u2019s short-term rentals will generate more tax revenue from tourists and expand housing options during the Olympics. <\/p>\n L.A.\u2019s current short-term rental regulations allow homeowners to list only their primary residences on platforms like Airbnb. It also prohibits housing units protected by the city\u2019s rent stabilization ordinance from being listed. <\/p>\n But existing Airbnb laws are rarely enforced. There were 7,500 properties illegally operating as short-term rentals in Los Angeles, according to the city\u2019s Housing Department\u2019s 2024 estimates<\/a>. Since 2021, L.A. has issued an average of 125 home-sharing citations per year across all enforcement departments, according to city planning records<\/a>. <\/p>\n Airbnb estimates that lifting restrictions on second homes could generate more than $100 million annually for the city in additional revenue from transient occupancy tax and other tourist spending. The company did not provide a further breakdown of those projections or indicate the exact number of new listings it expects would follow. <\/p>\n There are currently about 5,500 units already operating on home-sharing platforms under the existing rules and thousands more operating illegally, according to city officials. <\/p>\n On April 2, the city of L.A.\u2019s Planning Department recommended in a report<\/a> that the city reject the Airbnb proposal to allow second homes, finding it was unlikely to generate much revenue and likely to remove long-term housing from the market. <\/p>\n