After years of discussion, Long Beach will soon have an ordinance to govern its already existing lot of short term rental units.
Short term rental platforms like Airbnb will be allowed to operate in Long Beach but will be required to pay the same taxes as city hotels. The number of un-hosted units—where the property owner is not present—will also be limited to 1,000 citywide.
A person would not have to be a resident to be a host, but those that do will be able to have three units in the city; non-residents would be limited to two. Long Beach residents would be able to use their primary home as the third short term rental unit but would be limited to renting out the entire home for 90 days per year.
An opt-out clause would allow residents to petition neighbors in their census tracts to block the un-hosted types of units from being allowed to operate, but would require over 50% of residents to sign a petition to block them.
The original language of the proposed ordinance called for two-thirds of a census tract’s signatures and closed the window to block short term rentals after the first six months of he law being in place. A revision will allow an annual opportunity for petitions to be filed to block short term rentals.
Hotel workers, renters and community groups opposed the industry from being allowed to expand, with many saying that short term rentals take rental units off the market in a city that is already grappling with housing affordability issues.
“We can’t afford to be scaling up and taking units off the market as they’re being built,” said Anna Evans Goldstein, a research analyst with Unite Here. “Long Beach was ranked third-worst in the nation when it comes to rental affordability. We must address the conversion of vital housing units into de-facto hotels by creating a strong short-term rental policy today.”
Even property owners in more affluent parts of the city who typically have opposed policies aimed at reining in property rights opposed the ordinance because of the impact it could have on the character of neighborhoods.
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Despite the ordinance’s language calling for limited permits to be required for large events, some feared they could be stuck next to party houses if their neighbors opted to rent their homes out as short term rentals.
“The purpose of having someone on the property is to ensure that the noise element is followed because these will become party houses,” said resident Ann Cantrell. “If all the people in District 3 [southeast Long Beach] want this, let them have it. I live in District 5 [East Long Beach] and I don’t want it.”
Jon Choi, a public policy manager for Airbnb, said the company was excited to partner with the city on reasonable regulations. Choi noted its hosts contributions to the city’s finances since it began collecting transient occupancy taxes from Airbnb stays has helped stimulate the local economy.
“Our model is something that empowers local Long Beach residents,” Choi said. “Hosts keep 97% of the proceeds and 93% of our hosts direct guests that visit Long Beach to local small businesses, helping to grow that tax base as well.”
The council discussion carried past the three-hour mark despite overall agreement on the general scope of the policy. The major hangups for the council was the cap for un-hosted units in the city and how often, if ever, the cap should be revisited.
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The originally proposed language of the ordinance called for upward of 1,700 un-hosted units to exist across the city. Several council members sought to reduce that, with Councilwoman Mary Zendejas suggesting a cap of 500, Councilwoman Jeannine Pearce suggesting 750 and others suggesting other caps that were around 1,000 units.
Ultimately the 1,000-unit cap won out, as did Councilwoman Suzie Price’s recommendation to allow for annual opportunities to ban un-hosted units from census tracts that gather the required signatures. Such bans would not prohibit the renting out of primary residences.
Short term rentals are technically illegal in the city, but the city moved to begin taxing the listings already existing in the city last April. The city announced that over the last eight months of 2019 it collected about $1.8 million in tax revenue, with half going to the general fund and the other half going to the city’s special advertising fund, a requirement by city law.
Multiple council members requested that a separate report come back to assess how the general fund portion of taxes collected from short term rental hosts could be used to help build affordable housing. That report is expected to return sometime in the next six months.
The ordinance itself won’t got into effect until 180-days after the California Coastal Commission gives it final approval. The City Council still must vote once more before the law moves onto the Coastal Commission’s agenda. It’s unclear which month the item will be heard by the commission which meets monthly.