Los Angeles is losing out on $41 million in taxes from Airbnb, study says
Los Angeles Times | Hugo Martin
March 31, 2016
If property owners who rent out homes and apartments on the popular home-sharing site Airbnb were to pay taxes as hotels do, the city of Los Angeles would collect an extra $41 million each year.
That is one of the conclusions of a study commissioned by the American Hotel and Lodging Assn., the trade group for the country’s hotel industry, which has pushed for greater regulation of Airbnb and other home-sharing sites.
“Hotels compete on a daily basis to provide the best guest services,” said Vanessa Sinders, the senior vice president of government affairs for the trade group. “We welcome competition but we want to make sure there is a legal and level playing field.”
Airbnb spokeswoman Alison Schumer called the study “inaccurate,” saying it was “intended to mislead and manipulate.” Schumer said Airbnb has been working with the Los Angeles officials to create a way to pass along taxes to the city.
The study, conducted by a Pennsylvania State University professor with funding from the hotel trade group, focuses on the impact of Airbnb on Los Angeles. It follows a similar study by Penn State on Airbnb’s effect on Phoenix and the entire nation. The trade group is expected to release reports for other cities.
All of the studies have reached a similar conclusion: A small percentage of Airbnb operators have turned their homes and apartments into year-round hotels that don’t pay the same taxes and fees or meet the same safety requirements as traditional hotels.
In Los Angeles, the latest study said about 22% of Airbnb operators rent their properties for at least 180 days a year, while 4% offer the homes for at least 360 days a year. The neighborhoods with the highest number of Airbnb operators were Venice, West Hollywood, Hollywood and the areas around Silver Lake and Echo Park, the study found.
If all Airbnb operators were to pay the same room tax, tourism fees and assessment charges that are levied on hotels, Airbnb would owe the city of Los Angeles $41 million a year, the study concluded.
Under existing rules, renting out homes or apartments for fewer than 30 days at a time is illegal in big swaths of Los Angeles, according to the planning department. City officials say they must develop a plan to regulate the short-term rentals before trying to collect room taxes and fees.