Short-term home rentals are dropping in L.A. ‘The rules are too much'

Los Angeles Times

6 hours ago

For the last four years, Katherine Taylor rented out her Westside guesthouse on Airbnb. She came to rely on the extra income at a time when it felt like everything was getting more expensive.
But this spring, she took the listing down.
'I'm out,' Taylor said. 'The rules are too much. All these new regulations kept popping up, and it felt like it was only a matter of time before I got fined.'
Across the L.A. region, many people who rent out their homes for income seem to be changing their preferences. Short-term rentals are much more lucrative than longer stays, but the steady turnover often creates headaches for landlords, and increasingly they are in the crosshairs of local ordinances, including the risk of fines.
Because of this and other factors, short-term rental registrations have dipped over the last year.
Last July, there were 4,228 active Home Sharing registrations in the city of L.A., according to the Planning Department. This July, there were 3,972 — a 6% decrease.
Short-term rental software platforms show a decrease in listings as well, to varying degrees. In analyzing a sample set of short-term rentals in the L.A. metro area, Hospitable estimated a 44% drop in listings year over year, with steady declines each month. AllTheRooms reported a 13% drop in Airbnb listings across L.A. County over the same stretch.
The data sources vary, since companies have different access to listing data. AirDNA reported an 8% increase in Airbnb and VRBO listings in the L.A. metro area over the last year, but noted a decrease since January fueled by big drops in fire markets: a 56% decrease in Altadena, 36% decrease in Pacific Palisades and 25% decrease in Malibu.
Expert opinions differ on the cause of the drop-off, but the fires are definitely a factor. Thousands of homes burned down in the Palisades and Eaton fires, taking many rentals off the market. But in the wake of the disaster, many short-term rentals were converted to mid- or long-term rentals to house fire victims.
Other hosts are opting for mid-term rentals — stays of longer than 30 days but less than a year — independent of the fires.
'The short-term rental space got stuck. Regulations hit, and people are finding that the next best option is mid-term rentals,' said Jesse Vasquez, an entrepreneur who runs a mid-term rental summit every year.
Vasquez said L.A. is the best market for mid-term stays because so many people visit the city for extended periods with no permanent plans: travel nurses, students, digital nomads or people working on long-term projects such as films or construction.
He said mid-term rentals rake in about 15% to 20% less than short-term rentals, but in exchange, homeowners deal with less turnover. If a three-bedroom, two-bathroom house in a popular neighborhood can make around $10,000 per month as a short-term rental, it could still bring in $8,000 per month as a mid-term rental, Vasquez said.
Last year, Airbnb Chief Executive Brian Chesky identified mid-term stays as a 'huge growth opportunity' for the company, and said such bookings make up 18% of the company's business compared with 13% to 14% before the pandemic.
Mark Lawson used to rent out his San Fernando Valley home on VRBO for weekend stays, but last year he set the parameters to only accept bookings of 30 days or more.
'I got tired of having someone new in the house every few days,' he said.
Short-term rentals have long been contentious. While advocates say sites such as Airbnb and VRBO offer income for homeowners and options for tourists, critics claim home-sharing removes long-term rentals from a market in the midst of a housing crisis.
To prevent L.A.'s housing stock from being converted into short-term rentals, Los Angeles in 2018 passed the Home-Sharing Ordinance, which regulates short-term rentals by restricting hosts to renting out only their primary residences and requiring them to get a license.
The regulatory framework worked — somewhat. Listings dropped 70% from 2019 to 2023, though much of the drop could be attributed to the pandemic. Last year, the restrictions spread to unincorporated areas in L.A. County, which previously weren't subject to the rules.
But despite the new requirements, thousands of hosts still operate without a license, or fake their registration numbers, due to lack of enforcement.
Last year, a report from the L.A. Housing Department said that as of October 2024, there were an estimated 7,500 violations of the Home-Sharing Ordinance, but only 300 citations. So in March 2025, the L.A. City Council approved a slew of recommendations to beef up the ordinance even more, arming the city with a war chest of new enforcement tools.
The plan calls for 18 staffers to monitor violations and increased fines based on the square footage of the rental: $1,000 for rentals less than 500 square feet, up to $16,000 for homes greater than 25,000 square feet. The fines double and quadruple on the second and third violation, respectively.
The recommendations even call for city staffers to go on spy missions in illegal rentals. Under the proposed plan, Housing Department staff would use prepaid cards to book home-sharing rentals and stay in homes to gather evidence that they're operating illegally.
However, two months later, the city's $14-billion budget scaled back spending for many city departments. As a result, no new enforcement officers have been hired, and many of the plans have yet to be implemented.
But simply the threat of higher fines and stricter enforcement has had a chilling effect.
'Talking to our customers, regulation is the biggest factor in short-term rental inventory decreasing,' said Derek Jones, Hospitable's vice president of sales and partnerships. 'L.A.'s ordinance combines all the strict rules from other markets around the country.'
Jones said the potential for $1,000 fines — now able to be doled out without a warning beforehand — are causing some hosts to remove listings from the market out of fear, since the fines far exceed the nightly revenue brought in by the average listing.
'Housing is expensive already, then you add high penalties and zoning that limits supply,' Jones said. 'All that put together, it creates a market where housing investors are cautious to invest. And that proved to be the case this year.'
Taylor is one such investor. She specifically bought her Westside home because it had a guesthouse she could rent. But she found herself frustrated by the maximum days she could rent it annually under the Home Sharing Ordinance — 120 days.
Her space was larger than 500 square feet, so under the new rules, it could be subject to a $2,000 fine for the first violation, $4,000 for the second, and $8,000 for the third. Ultimately, she decided it wasn't worth the hassle.
'I'll keep an eye on how the city is enforcing the rules. Maybe I'll try it again someday,' she said. 'But for now, it's gonna stay empty.'