New Airbnb Rules May Lower Income For All in Los Angeles If you live in Los Angeles and you’re a business owner or simply an employee, you may want to read this one, as your income may be negatively affected by the new rules being introduced by Los Angeles and other cities in California.
Airbnb and other startup companies offering online marketplace and hospitality services have been a true economic boon for communities and smaller neighborhoods in Los Angeles.
Airbnb is responsible for hundreds of thousands of short-term rentals in the city every year, and the economic impact has been rather huge from all the spending by visitors.
But Los Angeles is considering to introduce new rules that would regulate Airbnb and other startups, potentially lowering their economic impact and resulting in millions of dollars in lost income for many local business owners and employees.
A recent report commissioned by Airbnb said Los Angeles hosts booking guests through their app helped generated more than $900 in visitor spending in the county in less than a year.
The study found that visitors that stay at Airbnb rentals spend 2.1x more than typical visitors and they largely spend at outlet malls, high-end retail destinations and amusement parks.
As of November 2017, there are over 22,000 active Airbnb listings in Los Angeles alone. These listings host nearly 5 million guest nights per year, which not only helps the hosts generate income but also local business owners and employees.
Those visitors, which stay over 2x times longer than typical visitors in Los Angeles, support thousands of jobs in the city and generate a bigger income for business owners and employees that sell their products and services to those visitors.
The Airbnb report found that Los Angeles receives about $25 million in remitted lodging taxes each year.
But the ever-growing economic benefits of Airbnb may come crashing down soon, as the city is considering two versions of an ordinance that would place limits on Airbnb’s activity in Los Angeles.
The first version would limit Airbnb and other similar startups offering rentals to the host’s primary resident for no longer than 180 days every year. The second version offers even stricter regulations, setting the maximum limit of 60 days per year.
Los Angeles officials say that the new regulations are intended to reduce complaints from residents about noise, parking and a huge number of visitors in their communities.
But any such ordinance would mean hundreds and millions of dollars in lost income for many business owners and employees in Los Angeles.
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