Why short-term rental owners are pushing back on city crackdowns
Advertise your Hermosa Beach home as a short-term vacation rental and the warning letters are likely to arrive swiftly at the address.
Criminal charges and a $2,500 fine — that quickly doubles, then triples — will follow if those warnings aren’t heeded.
Hermosa Beach isn’t the only South Bay city to declare war on homeowners who rent out units to vacationers willing to pay top dollar to stay at the beach.
Officials in Rancho Palos Verdes recently copied Hermosa Beach’s short-term rental law and Redondo Beach is prosecuting a few residents who violated its ban. Manhattan Beach banned the practice in 2015 and El Segundo, though not adopting an ordinance yet, responds to complaints on a case-by-case basis.
Short-term vacation rentals, cities say, undermine community cohesiveness and deplete their housing markets.
But not only does the state Coastal Commission say such ordinances violate homeowners’ rights, some residents are fighting back in court.
CRIMINAL LANDLORDS?
Hermosa Beach City Attorney Michael Jenkins said six criminal cases citywide are pending in court. Two of them, involving owners of neighboring beachfront properties on The Strand, say they’ve been unfairly criminally targeted and fined without due process.
On Jan. 12 in Torrance Superior Court, attorney Pat Carey argued on behalf of the Strand residents against city prosecutors. He sought to quash the complaint on the grounds that it violated the city’s own policies regarding code-enforcement reviews.
“My client received a citation. He requested an administrative hearing. He did not get that administrative hearing,” Carey told the judge. “They issued another citation. He again requested an administrative hearing. He did not get that administrative hearing and he gets another citation.
“Now he finds himself in criminal court without having due process. (The prosecution) has to prove (my client’s) priors just like in a DUI case.”
Attorney Sydne Michel, arguing on behalf of Hermosa Beach, said online ads depicting the homes at 67 and 68 The Strand for vacation rentals were in direct violation of the city’s Municipal Code, which does not allow private home rentals for less than 30 days at a time.
But Judge George Bird questioned the merit of the city’s criminal case.
“Whether there’s been one, two or three letters sent — what makes you believe you can prove there was a violation? There’s never been an adjudication by any tribunal,” Bird said. “Would you characterize those as violations? Or allegations? Or complaints? There has been no determination by any standard that, in fact, there were violations. It’s a mere suspicion or allegation.”
Bird said he was troubled by the vagueness of how the city defines “violations” but felt the cases should be decided by an appellate court panel.
“I think Mr. Carey makes a good argument regarding the homeowner that requests a hearing and is denied a hearing,” Bird said.
TAILORED APPROACH SOUGHT
Short-term rentals advertised on such sites as Airbnb, HomeAway, VRBO and Roomorama bypass tax codes and sometimes alarm neighbors when vacationers have loud parties and display bad behavior.
They also can undermine rent-control laws by providing financial incentive for owners to evict residents so they can instead draw in vacationers, according to a group of Los Angeles residents called Community Against Profit, which is pushing for aggressive short-term rental prohibitions in rent-controlled units.
But Coastal Commission officials encourage cities to work with them on a tailored approach to the issue. They advocate municipal limits on the number of days each year a unit can be rented, house rules, tax payments and other restrictions.
“The commission has found that vacation rental prohibitions unduly limit public recreational access opportunities inconsistent with the Coastal Act,” Commission Chairman Steve Kinsey wrote in a December open letter to community planners. “However, in situations where a community already provides an ample supply of vacation rentals and where further proliferation of vacation rentals would impair community character or other coastal resources, restrictions may be appropriate.”
AIRBNB ‘COMMITTED’ TO COMPROMISE
Similarly, vacation-rental websites seek compromise.
“Airbnb helps ordinary people by allowing them to use their house — typically their greatest expense — to generate supplemental income to pay for costs like food, rent, education for their children,” said Airbnb spokesman Christopher Nulty. “We are committed to working with communities to craft reasonable home-sharing rules which make neighborhoods better places to live, work and visit.”
But Hermosa Beach leaders weren’t swayed by pleas to impose softer regulations. Despite direct appeals from the Coastal Commission, they unanimously decided to outlaw short-term vacation rentals. To enforce the ban, they allocated roughly a $200,000 increase in the city’s annual code-enforcement budget to handle the cases and hired a San Francisco company, Host Compliance, to monitor websites for vacation rental listings in the city.
“(Warning letters) will establish the ‘legal notice’ to property owners,” Community Development Director Ken Robertson wrote in a memo when the council was deciding the matter in May. “A one-month grace period between the dates of the notice before referring the case to the prosecutor would be prudent. ... We would likely prioritize cases regarding properties that generate the most complaints. The number one goal is deterrence.”
EFFECTS ON RENT CONTROL
Lucy Han, a Playa del Rey member of Community Against Profit, appreciates the tough stance cities like Hermosa Beach have taken and hopes Los Angeles will follow in its footsteps. But she doesn’t believe criminal charges will hold up in court. Community Against Profit is primarily concerned with how the rentals undermine rent-control laws.
Ideally, Han said, sites such as Airbnb would require landlords to provide municipal registration numbers proving they are in compliance with their local laws.
“But I don’t think it will happen,” she said. “Our area is all rent-controlled tenants, and I want to make sure that’s enforceable. Airbnb’s been listing rent-controlled units. They list everybody. They’re a $40 billion company.”
Han said routine administrative fines don’t deter the rentals because the hosts make such a large profit and criminal charges won’t stick. The group recommends a spectrum of enforcement options.
“These hosts are so sneaky, you’ve got to make the penalties really hurt them,” Han said. “We say fine them 10 times the daily rate” of their unit.
“The cities, the people that write the ordinances, aren’t on ground zero. We are,” she said. “We have one neighbor who was cited several times, and they still have their ads up. They don’t care.”
The group recommends the use of companies to seek out violators online and wants Los Angeles to accept evidence submitted by neighbors to back up overwhelmed city workers.
“We’re trying to make sure there are enough deterrents in place because the city doesn’t have the resources,” Han said. “This is a relatively new thing. Everyone’s kind of a pioneer. It’s really going to be hard to reign it back in once you open the floodgates.”
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