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MONDAY, AUGUST 05- AUGUST 11, 2024
VISIT TEMPLECITYTRIBUNE.COM
VOL. 15,
NO. 183
In Los Angeles, your chic vacation rental may be a rent-controlled apartment By Robin Urevich, Capital & Main, and Haru Coryne, ProPublica This story was originally published by ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox. Series: Checked Out: LA’s Lost Residential Hotels 2008 city law was intended to preserve Los Angeles’ residential hotels as safety net housing. But the city has failed to enforce the law, leaving some lower-income Angelenos with nowhere to go amid a homelessness crisis. The first complaint about illegal vacation rentals at 1940 Carmen Ave., a rent-controlled apartment building just blocks from Hollywood Boulevard, arrived at the Los Angeles Housing Department nearly a decade ago. “This place is crazy,” a tenant reported in 2015, according to an inspector’s note, “luggage up and down, different people always in and out. Not safe.” Inspectors cited the owner for changing the building’s use without a permit. They warned him again the next year. But after that, housing inspectors appeared to drop the matter, even as they ordered the owner to correct other building code violations. A few years later, in 2020, a tenant complained that 14 of the 21 units were listed on Airbnb. LA’s zoning laws have long prohibited turning apartments into hotel rooms, with a few exceptions. But in 2018, the City Council handed inspectors a new enforcement tool, an ordinance that specifically outlawed using rent-controlled dwellings for short-term rentals. The Housing Department opened a case against 1940 Carmen but referred it to the planning department — even though the planning department doesn’t have the ability
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to fine or otherwise penalize violators. Planning department officials said they found no evidence of short-term rentals. However, Booking.com recently listed one-bedroom units in the building for about $160 a night. Asked about short-term rentals, 1940 Carmen owner Alexander Stein said, “I would rather not discuss it. Thank you for calling, though,” before hanging up. In all, residents and neighbors have made nearly two dozen complaints. The building even found international fame after the singer Mon Laferte told Rolling Stone she named her 2021 album “1940 Carmen” for the Airbnb where she stayed in LA — and was nominated for a Grammy for it. What happened at 1940 Carmen has played out in dozens of other buildings across Los Angeles. Landlords are using rent-controlled apartments as vacation rentals in apparent violation of the law, an investigation by Capital & Main and ProPublica has found. In some cases, entire apartment buildings with more than 30 units are listed as boutique hotels on sites like Hotels.com and Booking. com. By analyzing city databases and combing through online listings, the news organizations found 63 rentcontrolled buildings where a tourist could book a room this spring. The number is likely far higher because many vacation rental websites like Airbnb don’t list exact addresses. The findings are “shocking but not surprising,” said City Councilmember Nithya Raman, who is spear-
heading efforts to tighten home-sharing enforcement. “The enforcement system we have set up in the city of Los Angeles fails to meet the spirit of the ordinance.” Last year, Capital & Main and ProPublica found similar issues with a smaller category of affordable housing, called residential hotels, which are supposed to be preserved for the poorest Angelenos. But the new reporting on rentcontrolled apartments shows the bureaucratic dysfunction in the city’s housing and planning departments runs far deeper. As with residential hotels, inspection records and complaints obtained under the California Public Records Act revealed that the city’s enforcement system is riddled with inefficiencies and shortcomings. The enforcement crisis threatens LA’s ability to preserve affordable housing as the city faces a soaring housing market and nearrecord homelessness. Mayor Karen Bass declared a state of emergency on housing on her first day in office in 2022. About 650,000 units, 70% of the city’s rental inventory, are rent-controlled, meaning building owners can’t raise rents by more than roughly 4% each year until the tenant moves out. Housing Department spokesperson Sharon Sandow didn’t answer specific questions about enforcement problems and noted that multiple agencies oversee short-term rentals. She said, “We will continue to work with our colleagues to ensure enforcement.” The planning department didn’t respond to questions about the city’s home-sharing enforcement
Venice Beach. | Photo courtesy of Antti CC BY-NC-ND 2.0
policies and procedures, referring them to the Housing Department. An Airbnb spokesperson said by email, “there is no place on Airbnb for Hosts who circumvent the City’s Home-Sharing Ordinance, and we will continue to work closely with the City staff to address Hosts who try to evade the rules.” Expedia Group, which owns Hotels. com, said it “evaluates our listings on a regular basis and works with our partners in Los Angeles” to ensure compliance. Booking.com didn’t respond to emails requesting comment. The buildings range from the small 1920s-style Rosemary Speakeasy, featuring a $288-a-night tower apartment with a winding staircase and a jacuzzi-style tub, to the the Venice V Hotel on the famous beach boardwalk, which for $600 a night offers panoramic views from penthouse suites named for silent-film stars, like Charlie Chaplin, who once lived in the building, then known as the Venice Waldorf. Guests, the hotel’s website says, can
even see the ocean from the shower. Venice V owner Carl Lambert said he’s done nothing wrong by converting the building. “Everyone has been treated fairly,” Lambert said. “I comply with the law.” The Rosemary owner Izzy Kerian said his is a commercial building and denied knowledge of its rent-controlled status. “Too many questions, ma’am,” Kerian said. “I don’t understand anything. I’m just the business owner.” The unchecked conversions come as “home sharing,” in which residents rent out their houses, spare bedrooms and apartments as hotel rooms, has boomed across the world over the past decade. That has left cities from Dallas to Vienna to Tokyo struggling to craft regulations to keep the $100 billion industry from devouring the local housing supply. Several academic studies have found short-term rentals drive up rents for residents, fueling the push for stronger regulation. Elected officials in LA are considering how to strength-
en its rules. The timing is important, housing activists say, as the city prepares to host the 2026 World Cup and the 2028 Olympics — each of which is expected to bring hundreds of thousands of visitors to the city. A Tangled Enforcement System Since the home-sharing ordinance passed, the Housing Department has heralded it as a powerful tool that would stop rogue hotel operators from eating up rental units. The law prohibits unregistered properties from advertising, and owners can be fined $586 per violation and up to $5,869 for repeat violations. Vacation rental websites can also be fined for listings that violate the ordinance. Recent enforcement has persuaded some property owners to return their buildings to residential use, Sandow said. In 2022, the city settled a lawsuit against Vrbo, accusing it of processing thousands of illegal bookings, for $150,000. A spokesperson See Vacation rentals Page 02