To stop its alleged flagrant violation of the city’s short-term rental ordinance, which prohibits platforms from booking transactions for unregistered hosts, Los Angeles City Attorney Mike Feuer announced on March 21 that a lawsuit has been filed against HomeAway, which operates the popular Vrbo short-term rental hosting platform. HomeAway, part of Expedia Group, allegedly routinely processes rental bookings for unregistered hosts. From Nov. 7- Dec. 7, 2021 (the most recent 30-day period for which the city has booking data from HomeAway), approximately 29% of HomeAway’s booking transactions in the city violated the ordinance, alleged. Such data suggests that HomeAway has completed thousands of prohibited transactions since the ordinance took effect, he added.
“We’re in the midst of a housing crisis. The council found that unregulated home sharing worsens our extreme housing shortage and contributes to increased rental costs, along with undermining the residential character of neighborhoods and increasing nuisance activity. And when online platforms and hosts refuse to play by the rules, it allows them to compete unfairly with those who do, as well as depriving the city of much-needed revenue for basic services,” Feuer said. “HomeAway’s alleged flagrant violations of city law must end now.”
In December 2018, the L.A. City Council adopted the short-term rental ordinance after finding that short-term rentals reduce the number of available units and drive up rental costs. It also found that short-term rentals increase nuisance activity, and have negative impacts on the residential character of neighborhoods. Enforcement of the ordinance, which prohibits home sharing without the host first registering with the city, began in November 2019. The ordinance defines a short-term rental as one that is rented for 30 or fewer consecutive days.
The ordinance requires eligible hosts to submit an application, pay a fee and obtain a registration number from the Department of City Planning before engaging in short-term rentals. All postings for short-term rentals must clearly list the host’s city-issued registration number, and hosts may not rent for more than 120 days in a calendar year unless they’ve obtained a separate exemption. Hosts are also required to pay a fee to the city for each night of short-term rental, and collect transient occupancy taxes from guests, which must also be remitted to the city.
The ordinance prohibits hosting platforms from processing booking transactions for any host who does not have a valid home-sharing registration number issued by the city. It also prohibits platforms from processing transactions for hosts who have exceeded the authorized 120-day limit.
The lawsuit seeks to force HomeAway from further violating the ordinance. It also seeks penalties of up to $2,500 under the Unfair Competition Law and up to $2,500 under the L.A. Municipal Code for each past unauthorized booking.
For information, visit lacityattorney.org.
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