Los Angeles County, California Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Los Angeles County, California?

Los Angeles County has recently passed new regulations on short-term rentals (STRs) like Airbnb and Vrbo in unincorporated areas of the county. These rules aim to balance the economic benefits of STRs with preserving long-term housing stock and neighborhood quality of life. Here's what you need to know about the new ordinance.

Starting a Short-Term Rental Business in Los Angeles County

To legally operate a short-term rental in unincorporated L.A. County, hosts must adhere to the following key requirements:

• Register with the county annually and pay a $914 fee
• Only rent out your primary residence where you live at least 6 months per year
• Limit rentals to 90 days per year if un-hosted (when host is not present)
• Restrict occupancy to 2 people per bedroom plus 2 additional people, up to 12 max
• Prohibit rentals of accessory dwelling units (ADUs), guest houses, tents, etc.

The ordinance applies to STRs in unincorporated areas, which are home to about 1 million residents in communities like East L.A., Altadena, and Ladera Heights. It does not apply to properties within the 88 incorporated cities in L.A. County, which may have their own STR regulations.

Hosts who violate the new rules may face fines of $2,000 per day or two times the nightly rate charged, whichever is higher. STR platforms like Airbnb and Vrbo are also required to only list properties registered with the county, or face $1,000 daily fines per illegal listing.

The regulations were passed by the L.A. County Board of Supervisors in March 2024 and will go into effect 180 days later in September. They aim to crack down on STRs that have proliferated in recent years, potentially impacting housing affordability and neighborhood character.

However, some hosts argue the rules are overly strict and will hurt those who rely on STR income. Exceptions were added to allow hosts to live in an ADU while renting their main home, and subsidies may be provided to low-income hosts to offset the registration fee.

The new ordinance does not immediately apply to STRs in coastal areas like Malibu and Catalina Island, which fall under the jurisdiction of the California Coastal Commission. Separate regulations for those areas could take 1-2 years to be approved.

So, in summary, if you want to start an Airbnb or Vrbo in unincorporated L.A. County, make sure you understand and follow the new rules. Only rent your primary residence, register and pay the fee, and abide by the caps on un-hosted stays and occupancy limits. By doing so, you can legally operate an STR business while also being a good neighbor in your community.

Short-Term Rental Licensing Requirement in Los Angeles County

To legally operate a short-term rental (STR) in unincorporated areas of Los Angeles County, hosts must adhere to the following key requirements outlined in the recently passed Short-Term Rentals Ordinance:

1. Register annually with the L.A. County Treasurer and Tax Collector (TTC) and pay a $914 fee
2. Limit STRs to the host's primary residence where they live for more than 6 months per year
3. Prohibit STRs in accessory dwelling units (ADUs), rent-restricted housing, and vacation rentals
4. Cap unhosted stays to 90 days per calendar year
5. Restrict occupancy to 2 people per bedroom plus 2 additional people, up to 12 max
6. Minimum booking of 1 night for unhosted stays and 2 nights for hosted stays
7. Prohibit STRs from being used for commercial events or large parties

Hosts must submit their STR registration application and fee payment through an online portal that will be available from the TTC by October 2024. The registration process may take several weeks, depending on application volume.

Hosts and STR platforms like Airbnb and Vrbo that violate the ordinance face penalties:

1. Hosts may be fined $2,000 per day per violation, or 2x the average nightly rate charged, whichever is higher
2. Platforms may be fined $1,000 per day per illegal listing for failing to verify and display valid registration numbers

The new rules aim to balance the economic benefits of STRs with preserving long-term housing and neighborhood quality of life in unincorporated L.A. County, home to about 1 million residents. They will go into effect 180 days after the ordinance was passed on March 19, 2024.

Hosts in coastal areas like Malibu and Catalina Island will need to wait for separate regulations to be approved by the California Coastal Commission, which could take 1-2 years. Cities within L.A. County, like Los Angeles, have their own existing STR ordinances that will not be impacted.

Required Documents for Los Angeles County Short-Term Rentals

To legally operate a short-term rental in unincorporated areas of Los Angeles County, hosts must submit the following required documents when registering annually with the L.A. County Treasurer and Tax Collector:

Proof of Primary Residence: Hosts must provide at least two documents proving the rental property is their primary residence where they live for more than 6 months per year. Acceptable documents include:

1. Valid California driver's license or identification card
2. Motor vehicle registration
3. Voter registration
4. Income tax return showing the property address
5. Utility bill in the host's name

Transient Occupancy Tax (TOT) Registration Certificate: Hosts must register with the Treasurer and Tax Collector to obtain a TOT Registration Certificate in order to collect the required 12% transient occupancy tax from guests and remit it to the county on a monthly basis.

Liability Insurance: While not explicitly required in the ordinance, hosts are strongly encouraged to obtain liability insurance that covers short-term rental operations, with a minimum of $500,000 in coverage. Proper insurance helps protect hosts from potential lawsuits or damages.

Property Ownership or Rental Agreement: If the host owns the property, they must provide a copy of the property deed or title. If the host rents the property, they must submit a copy of their rental or lease agreement, along with a notarized affidavit signed by the property owner authorizing the tenant to operate a short-term rental.

Government-Issued Photo ID: Hosts must submit a copy of a valid government-issued photo identification, such as a driver's license or passport, to verify their identity matches the name on the short-term rental application and property records.

These documents must be submitted through the online registration portal that will be available from the L.A. County Treasurer and Tax Collector's Office by October 2024. The annual registration fee is $914, and the process may take several weeks, depending on application volume.

Hosts who fail to register and submit the required documents may face fines of $2,000 per day or two times the nightly rent charged, whichever is higher. Short-term rental platforms like Airbnb and Vrbo are also required to only list properties with valid registration numbers, or face $1,000 daily fines per illegal listing.

By gathering and submitting these required documents, hosts can ensure they are in full compliance with L.A. County's new short-term rental regulations aimed at preserving long-term housing and neighborhood character in unincorporated areas. The rules will go into effect 180 days after the ordinance was passed on March 19, 2024.

Los Angeles County Short-Term Rental Taxes

As a short-term rental host in Los Angeles County, it's important to understand the various taxes that apply to your rental business. Here's a detailed breakdown of each tax type and the rates you can expect to pay:

Transient Occupancy Tax (TOT): Also known as a "bed tax" or "hotel tax," the TOT is a 12% tax on the rent charged to transient guests staying 30 days or less in hotels, motels, and short-term rentals located in unincorporated areas of L.A. County. This tax is collected by the host and remitted to the L.A. County Treasurer and Tax Collector on a monthly basis.

California State Income Tax: Short-term rental income is subject to state income tax, which has a progressive rate structure ranging from 1% to 12.3%. There is an additional 1% surcharge on incomes over $1 million. Your specific tax rate will depend on your total taxable income for the year.

Federal Income Tax: Rental income must also be reported on your federal tax return. The federal tax rate on rental income can range from 10% to 37%, depending on your tax bracket. If your annual net earnings from self-employment are $400 or more, you'll also owe self-employment tax (15.3% as of 2020).

Los Angeles County Business License Tax: While not a direct tax on rental income, short-term rental operators in unincorporated L.A. County are required to obtain a business license and pay an annual fee of $914 under the new STR ordinance. This covers the costs of administering and enforcing the registration program.

It's important to note that incorporated cities within L.A. County, like Los Angeles, Santa Monica, and Pasadena, have their own TOT rates and STR regulations that may differ from the county rules. Be sure to check the specific requirements for your rental's location.

Possible Write-Offs and Deductions

The good news is that many expenses related to operating your short-term rental business are tax-deductible. Some common deductions include:

1. Mortgage interest
2. Property taxes
3. Rental unit repairs and maintenance
4. Utilities
5. Insurance premiums
6. Supplies and linens
7. Cleaning and management fees
8. Advertising costs
9. Depreciation of the rental property

Keeping detailed records of your rental income and expenses throughout the year will make it easier to maximize your deductions come tax time. Consult with a qualified tax professional to ensure you are taking advantage of all available write-offs for your specific situation.

By understanding the tax obligations and potential deductions for your L.A. County short-term rental, you can better manage your business's finances and stay in compliance with local regulations. With some careful record-keeping and professional guidance, you can minimize your tax burden while providing a great experience for your guests.

California Wide Short-Term Rental Rules

While most short-term rental regulations in California are determined at the city and county level, there are a few state laws that Los Angeles County hosts should be aware of:

Senate Bill No. 60 (Chapter 307): This bill, passed in 2019, defines a short-term rental as a residential property rented to a guest for 30 days or less. This definition is generally applied by most California counties and cities, including Los Angeles County.

Transient Occupancy Tax (TOT): The state of California allows cities and counties to levy a transient occupancy tax on short-term rentals of 30 days or less. Los Angeles County's TOT rate is 12% of the listing price, including cleaning fees. While platforms like Airbnb and Vrbo collect this tax on behalf of some cities, they do not currently do so for unincorporated areas of L.A. County. Hosts are responsible for collecting and remitting the TOT to the county.

Business License and Taxes: Short-term rental income is subject to federal income tax, state income tax (1-12.3% based on total taxable income), and potentially self-employment tax (15.3%) if annual net earnings exceed $400. Hosts in Los Angeles County are also required to obtain a business license and pay an annual fee of $914 under the new ordinance.

Homeowner and Landlord Restrictions: California state law requires hosting platforms to notify hosts that their lease agreements or HOA rules may prohibit or restrict short-term rentals. Hosts should carefully review their agreements before listing a property.

Insurance Considerations: Platforms must also notify hosts to review their insurance policies to ensure proper liability coverage for short-term rental operations. Hosts are encouraged to obtain additional short-term rental insurance.

While these state-level laws provide some basic guidelines, the bulk of short-term rental regulation falls to local jurisdictions. Los Angeles County's new ordinance imposes several additional restrictions on hosts in unincorporated areas, such as limiting rentals to a host's primary residence, prohibiting rentals of ADUs and rent-controlled units, and capping unhosted stays to 90 days per year.

As always, hosts should carefully review both state and local regulations to ensure they are in full compliance when operating a short-term rental business. Failure to do so could result in significant fines and penalties.

Does Los Angeles County Strictly Enforce STR Rules?

Based on discussions from hosts on Reddit and BiggerPockets forums, it appears that Los Angeles County does not strictly enforce its short-term rental regulations, especially compared to some incorporated cities within the county that have their own rules.

Many hosts report operating STRs in unincorporated areas of L.A. County despite not fully complying with the new ordinance passed in 2024. Common violations include renting properties that are not the host's primary residence, exceeding the 90-day annual cap on un-hosted stays, and failing to register and pay the required fees.

While the county threatens fines of $2,000 per day for non-compliant listings, actual enforcement seems to be minimal so far. Some hosts believe the county lacks the resources and motivation to proactively investigate the thousands of STR listings to verify their registration status and adherence to the primary residence and un-hosted stay requirements.

This lax enforcement makes L.A. County somewhat more friendly to STR operators compared to cities like Santa Monica and West Hollywood, that have largely banned vacation rentals outside of hosted stays in a primary residence. However, the county is still less permissive than it was prior to the new regulations.

Hosts do take a legal risk by openly flouting the county rules. A few report receiving warning letters from the county after being reported by neighbors or targeted in sting operations. But many continue to operate under the radar, with a mentality that it's "better to ask forgiveness than permission."

The lack of proactive enforcement has allowed thousands of technically illegal STRs to continue operating in L.A. County. But the risk of fines and scrutiny likely grows as the county's registration system comes online and awareness of the new ordinance increases. Hosts should carefully weigh the costs and benefits of non-compliance.

So, in summary, while L.A. County has an STR ordinance on the books, practical enforcement seems to be limited so far, emboldening many hosts to continue operating in violation of the new rules. But as the registration process is implemented, the county may start cracking down more on illegal listings. The L.A. County STR market is in a gray area right now.

How to Start a Short-Term Rental Business in Los Angeles County

Starting a short-term rental business in Los Angeles County requires careful planning and adherence to local regulations. Here's a step-by-step guide to help you get started:

Verify your property's eligibility:

1. Ensure your property is located in an unincorporated area of L.A. County that allows short-term rentals.
2. Confirm the property is your primary residence where you live for more than 6 months per year.
3. Check that your property is not an accessory dwelling unit (ADU), rent-restricted affordable housing, or a vacation rental.
4. If you're a renter, obtain written permission from your landlord to operate a short-term rental.

Register with L.A. County and obtain a business license:

1. Register your short-term rental with the L.A. County Treasurer and Tax Collector and pay the annual $914 fee.
2. Obtain a business license from the county, which may require additional fees and paperwork.
3. Keep your registration and license up-to-date and renew them annually.

Prepare your property for guests:

1. Ensure your rental meets all health and safety requirements, such as smoke detectors, fire extinguishers, and carbon monoxide detectors.
2. Provide essential amenities like clean linens, towels, toiletries, and kitchen supplies.
3. Create a welcoming and clutter-free space with comfortable furniture and decor.
4. Consider hiring a professional cleaning service between guest stays to maintain a high standard of cleanliness.

Set up your listing on short-term rental platforms:

1. Choose popular platforms like Airbnb and Vrbo to list your property.
2. Create an attractive listing with high-quality photos, detailed descriptions, and accurate information about amenities and house rules.
3. Set competitive rates based on your property's features, location, and seasonal demand.
4. Clearly communicate the county's occupancy limits (2 people per bedroom plus 2 additional people, up to 12 max) and rental restrictions (90-day annual cap for un-hosted stays) in your listing.

Manage bookings and guest communication:

• Respond promptly to guest inquiries and booking requests to maintain a high response rate.
• Use the platform's messaging system to communicate check-in instructions, house rules, and local recommendations.
• Consider using a digital guidebook or welcome packet to provide guests with all the information they need for a comfortable stay.
• Be available to answer questions and address any issues that may arise during a guest's stay.

Comply with tax obligations:

• Obtain a Transient Occupancy Tax (TOT) Registration Certificate from the L.A. County Treasurer and Tax Collector.
• Collect the 12% TOT from guests and remit it to the county on a monthly basis.
• Keep accurate records of all rental income and expenses for tax purposes.
• Consult with a tax professional to ensure you're meeting all your federal, state, and local tax obligations.

Maintain good neighbor relations:

• Inform your neighbors that you'll be operating a short-term rental and provide them with your contact information in case of any concerns.
• Establish quiet hours and occupancy limits to minimize noise and disruption to the neighborhood.
• Ensure guests park in designated areas and don't block driveways or streets.
• Address any neighbor complaints promptly and take steps to prevent future issues.

By following these steps and staying informed about L.A. County's evolving short-term rental regulations, you can build a successful and compliant rental business. Remember to prioritize guest satisfaction, maintain open communication with the county and your neighbors, and continuously improve your property and hosting skills to stand out in the competitive market.

Who to Contact in Los Angeles County about Short-Term Rental Regulations and Zoning?

If you have questions about short-term rental regulations and zoning in unincorporated areas of Los Angeles County, here are the key contacts and resources:

L.A. County Department of Regional Planning
Phone: (213) 974-6411
Email: info@planning.lacounty.gov
Website: https://planning.lacounty.gov/
STR Ordinance Info: https://planning.lacounty.gov/long-range-planning/short-term-rentals-ordinance/

The Department of Regional Planning is responsible for developing and enforcing the county's zoning code and land use regulations, including the recently passed Short-Term Rental Ordinance. Contact them for questions about STR zoning, permitting, and the ordinance approval process.

L.A. County Treasurer and Tax Collector
Phone: (213) 974-2111
Website: https://ttc.lacounty.gov/
STR Info: https://ttc.lacounty.gov/str/

The Treasurer and Tax Collector is responsible for administering the required STR registration process and collecting the 12% transient occupancy tax. Contact them for questions about registering your STR, paying fees and taxes, and complying with the new regulations.

In addition to official county resources, there are several online communities where L.A. County STR hosts share information and support:

• BiggerPockets L.A. STR Forum: https://www.biggerpockets.com/forums/530-short-term-vacation-rental-discussions
• AirHostsForum L.A. News & Discussion: https://airhostsforum.com/c/local-news/los-angeles/17
• Reddit r/AirBnB L.A. Threads: https://www.reddit.com/r/AirBnB/search/?q=los%20angeles&restrict_sr=1
• Facebook Groups like "Airbnb Hosts Forum - Los Angeles": https://www.facebook.com/groups/1628968357357280/

These forums and groups are great places to ask experienced local hosts for advice, stay up-to-date on regulatory changes, and troubleshoot issues with your STR business. Just remember that while host tips can be helpful, always verify information with official county sources to ensure compliance.

By utilizing these key county contacts and tapping into the knowledge of the L.A. STR host community, you'll be well-equipped to navigate the complex and evolving regulatory landscape. With some due diligence and proactive communication, you can run a successful and compliant short-term rental business in Los Angeles County.

What Do Airbnb Hosts in Los Angeles County on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions from Los Angeles County hosts on Reddit and BiggerPockets forums, many express frustration with the county's recently passed short-term rental (STR) ordinance. Here are some key takeaways from their experiences and opinions:

Strict Primary Residence Requirement: Hosts feel the requirement to only rent their primary residence where they live at least 6 months per year is overly restrictive. One host on r/AirBnB said, "LA council is hosting short-term thinking. Making Airbnb hosts hop through endless hoops, even the most well behaved, clear track record hosts."

90-Day Annual Cap on Unhosted Stays: The limit of 90 days per year for unhosted rentals (when the host is not present) is seen as unreasonable by many hosts who rely on STR income. A Topanga Canyon host on r/airbnb_hosts said they are "working with a group of responsible hosts to get the current ordinance proposed rewritten" to allow hosted stays in separate guest houses.

Lack of Enforcement: Despite the new rules, many hosts report that enforcement seems lax so far, with thousands of illegal listings still operating. One host on r/AirBnB said "LA has Airbnb regulations for a good reason—to keep all the nice apartments from turning into Airbnbs. I've stayed in a number of legal Airbnbs in LA. This sure sounds illegal—do you feel comfortable staying there under those circumstances?"

Impact on Rental Supply and Affordability: Some hosts acknowledge that STRs have contributed to housing shortages and higher rents in L.A. County. A comment on r/LosAngeles said "Airbnb is literally the worst thing to happen to the housing market this century." However, others argue building more housing is a bigger issue than STRs.

Confusion over Jurisdiction: With different rules for incorporated cities vs. unincorporated county areas, and additional state laws, many hosts express confusion over what regulations apply to them. One host on r/AirBnB said "I'm very confused about everything and it's impossible to understand what is going on."

Overall, while some L.A. County hosts support reasonable regulations on STRs, many feel the current ordinance goes too far in restricting their ability to earn income from their properties. Lack of proactive enforcement and jurisdictional complexity add to hosts' frustrations with navigating the new legal landscape for STRs in the nation's largest county.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.