As the sharing economy continues to grow, bureaucrats across the country are making sure they don’t miss out on the chance to get in the way of innovation. San Francisco passed tough regulations on home-sharing last week, but another California city is jumping on the anti-Airbnb bandwagon.
This week, the Los Angeles City Planning Commission released a lengthy document detailing the plans for Home-Sharing Ordinance CPC-2016-1243-CA – a reaction to the rise in popularity of Airbnb and VRBO, applications that allow people to informally rent short-term housing from other private citizens. On June 23, the City Commission will meet to discuss the plan.
The ordinance says hosts must pay a “hotel tax,” turn over rental information, and limit the number of days they host guests to 120 days-per-year. The ordinance would also ban renting out non-primary residence spaces (such as your vacation home or RV) and ban offering apartments that fall under price ceiling covenants, among other restrictions. Failure to abide by these commands could lead to fines up to $2,000 a day for hosts.
The ordinance protects hotels and owners of long-term rental properties, but the price to consumers would be privacy, efficiency, and property rights. These effects have already been seen in the suburb of Santa Monica, where restrictions have decimated the home-sharing industry.
It is worth noting that currently, short-term rentals are not legal in Los Angeles, and the ordinance would legalize them. The Commission thinks it can use this “legalization” of home-sharing to achieve their agenda, but consensus makes the law, and thousands have already been engaging in the practice regardless. Surely, it would be beneficial to make the de facto law into a de jure one, but not at the cost the Commission demands.
According to Tuesday’s Commission release, both hosting platforms and individual hosts would be legally obligated to maintain and provide written logs of home-sharing activity.
That’s not sitting well with consumer advocates.
“Requiring e-commerce sites to turn over personal data so enforcement officials can scour through records and search for potential violations of local laws amounts to a blank search warrant and a basic violation of our civil rights,” wrote John Simpson, privacy project director for Consumer Watchdog, on Monday in an open letter to the LA City Commission.
Airbnb spokeswoman Alison Schumer concurred, adding in a statement that the ordinance is “putting consumer privacy at great risk by requiring online platforms to give the government unfettered access to confidential user data without any idea of how that information would be used.”
Nothing says “unnecessary involvement” quite like “city commission,” except maybe “Administrative Citation Enforcement” and “Administrative Nuisance Abatement”—the two task-forces the Commission wants to use to enforce the regulations.
The Commission argues short-term home-sharing leads to distortions in the market, and these measures will keep housing costs down and supply up. However, as Watchdog has previously reported, the very Rent Stabilization Ordinances (RSOs) that the Commission favors actually reduce the supply of affordable housing by strongly disincentivizing housing development. Efficiency nearly always suffers when you add layers of bureaucratic oversight and regulation on top of an effective, simple, and popular product or service.
The Commission wants to tell Angelenos what they can and cannot do with their private property. That’s like telling Uber drivers they need to get taxi medallions to give rides in their own cars. Given the high cost of living in Southern California, many residents use Airbnb to help them stay afloat. If the city decides to reduce this income stream, then tax it heavily, some of the less wealthy members of the community may be driven out.
Municipal and state agencies are considering similar measures across the country as well, and could find themselves following LA’s lead. Fining a person for having guests in their home seems like something from an Orwell novel, but it could be the future of Los Angeles and cities all across America if planners get their way.