Tougher rules are forcing illegal AirBnBs out of WeHo – WEHOonline.com – WEHOville

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City Hall’s clampdown on short-term rentals (STRs) like AirBnBs in West Hollywood appears to be working as illegal listings have dropped by more than 25 percent.

City Council is set to receive an update on new enforcement results following the introduction of Ordinance 23-20, which amends the city’s regulatory framework for STRs. The ordinance was first presented at the City Council meeting on June 26, 2023, aiming to enhance enforcement against illegal STR operations.

The ordinance modifies Section 19.36.331 of Title 19 (Zoning Code) of the West Hollywood Municipal Code (WHMC). Key amendments include:

  • Expanding Advertisement Prohibitions: Targets advertisements that falsely claim a vacation rental is in West Hollywood when it is not.
  • Liability for Hosting Platforms: Platforms that facilitate bookings for vacation rentals in the city are now liable.
  • Enforcement Options: The city’s enforcement mechanisms now include administrative penalties, civil, and criminal prosecution.
  • Cost Reimbursement: Offenders must reimburse the city for investigation costs and pay all owed Transient Occupancy Tax (TOT) retroactively.
  • Private Right of Action: Individuals can sue hosts who violate the ordinance.
  • Administrative Subpoenas: Authorizes the use of administrative subpoenas for compliance.

Following a directive from the City Council, staff analyzed STR trends in West Hollywood using data from Granicus LLC as of January 15, 2024. The data shows the distribution of STR listings and units across seven neighborhoods:

  • Center City: 154 Listings, 145 Units
  • Eastside: 355 Listings, 329 Units
  • Norma Triangle: 61 Listings, 39 Units
  • Tri-West: 27 Listings, 15 Units
  • West Hollywood Heights: 7 Listings, 6 Units
  • West Hollywood North: 89 Listings, 55 Units
  • West Hollywood West: 52 Listings, 44 Units
  • Total: 745 Listings, 633 Units

There’s been a 25% decrease in units since March 2017, indicating the city’s enforcement strategies are effective.

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The enforcement of the city’s prohibition on STRs faces challenges due to the nature of STR listings, which typically do not disclose the location or address until after booking. This requires Code Enforcement staff to conduct investigations to identify the addresses of reported STR units. Granicus LLC assists in this process by identifying a portion of these units, usually around 20%, although this figure fluctuates.

The city has enhanced its approach to managing STR complaints through its Neighborhood and Business Safety Division by allocating these tasks to all officers in the division, as opposed to just one previously. This shift includes proactive investigations of STRs identified by Granicus LLC and a new procedure for reporting new STR complaints, which aids in monitoring and potentially using this information for future enforcement.

Evidence collection is a significant hurdle for Code Enforcement Officers due to the deliberate obfuscation by STR hosts. Upon identifying an STR, officers issue a Notice of Violation to the property owner and tenants involved, followed by administrative citations for continued violations, with fines based on the advertised rental rate. This process can escalate to civil or criminal prosecution if compliance is not achieved.

These enforcement and compliance efforts indicate progress in addressing the challenges associated with STRs, with the city’s strategies aimed at reducing the impact of STRs on the community through continued outreach, education, and enforcement.

Since the ordinance amendments, there’s been an increase in community complaints about STR activities, more cases opened, and more citations issued for violations. The city has worked with hosting platforms like Airbnb and VRBO to ensure compliance, leading to the removal of listings with incorrect information.

The city issues administrative citations for STR advertisements, with fines ranging from $1,075 to $5,075 for those without an advertised rental rate. For STRs that do advertise a rental rate, fines can significantly exceed these amounts, calculated as the advertised nightly rate times the minimum number of nights offered, then multiplied by 400%, 600%, or 800%, excluding deposits or ancillary fees. Beyond financial penalties, Code Enforcement Officers may pursue civil or criminal prosecution following an initial citation. Compliance is confirmed and investigations are closed when no further STR activities are detected. Data from 2023 indicates a notable increase in STR-related complaints, enforcement cases, and citations since 2018.

Following the city’s STR code amendments in June 2023, Code Enforcement Officers have engaged with multiple booking platforms, including Booking, Expedia Group, and Airbnb, among others, to ensure compliance with the City of West Hollywood’s regulations. Airbnb and VRBO have been particularly cooperative, with Airbnb implementing a procedure requiring hosts to enter a valid city home-sharing business license number to post a listing, and VRBO ceasing all STR listings in West Hollywood since August 2023.

The enforcement strategy also addresses false advertisements by STR hosts claiming to be located in West Hollywood when they are not. Airbnb has agreed to remove such listings upon notification by the city and has provided direct communication channels for reporting violations. This cooperation represents a significant step towards ensuring compliance with local regulations.

THE OTHER SIDE

Not all of West Hollywood’s residents are thrilled about the stricter rules.

Last year, Russell Dague ran afoul of Code Enforcement over an old listing he had posted on MrBnB, an AirBnB-service marketed toward gay men, for a room in his unit. Dague questions the reasons behind the new enforcement tactics, suggesting that rentals can serve as a financial aid similar to having a roommate and are not always for hosting parties as is widely perceived. He says the officer’s approach felt aggressive, including visits, calls, and texts about his rental advertisement. The ad had been inactive since he got a roommate at the beginning of the year, yet Russell expressed his willingness to comply with the ordinance. 

After agreeing to take the ad down, he received a text from the officer hours later.

“That code enforcement officer sent me a text saying that I’ve notified your property manager and the owner of your house and I notifying you that since you have not complied, you will be hit with a $1,500 penalty, and so I immediately picked up the phone and I called and I said, ‘Officer, I am confused because I told you that a) I’ve had a roommate since the beginning here, and the ad has not been active. It still exists, but it’s not active, and two) I told you that I would comply by deleting the profile and deleting the ad.’ And he said, ‘Well, you haven’t complied,’ and I said, ‘Well, you didn’t tell me that it was something I had to do in less than 24 hours.’ And he admitted that he hadn’t told me that, and he said, ‘Well, if you delete it immediately, I will not penalize you,’ which was kind. But again, I see this whole thing as kind of harassing and pushing, and I said it’s sort of aggressive.”

FOLLOW THE MONEY

Each short-term rental in WeHo represents a loss of potential Hotel Occupancy Tax income, from which the city derives most of its revenue. 

To estimate the financial impact of Airbnb bookings on West Hollywood’s hotel occupancy tax (HOT) revenue based on 745 illegal bookings noted above, we calculate an average nightly rate of $150 and an average stay of three nights with WeHo’s 12.5% HOT rate.

Based on the hypothetical assumptions the estimated hotel occupancy tax (HOT) revenue from 745 Airbnb bookings would be approximately $83,812.50.

This calculation assumes full compliance in tax remittance by Airbnb hosts. Actual revenue could vary based on the true average nightly rates, variations in the length of stay, the actual occupancy tax rate in West Hollywood, and the level of compliance among hosts. ​

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