Los Angeles is reviewing a pair of proposals that would temporarily alter the city’s short-term rental regulations and introduce a new tax prepayment structure. As reported by LAist and the Los Angeles Times, the measures are included in a budget proposal for the upcoming fiscal year and are aimed at expanding lodging capacity and accelerating city infrastructure projects ahead of the 2028 Olympic Games.
Proposed changes to short-term rental regulations
Since 2018, Los Angeles has prohibited homeowners from listing anything other than their primary residences on short-term rental platforms like Airbnb.
According to the Los Angeles Times, the new budget proposal includes an initiative to develop a limited vacation rental ordinance. If approved, this would temporarily allow the owners of second homes and investment properties to rent them out on a short-term basis.
The measure is intended to provide additional tax revenue and generate more room for visitors during a densely packed schedule of upcoming major events, which includes the FIFA World Cup this summer, Super Bowl LXI in 2027, and the 2028 Summer Olympics. Because the proposal is tied specifically to these events, LAist notes that the temporary program would officially sunset on December of 2028.
Prepayment of transient occupancy tax
A second proposal could involve a financial arrangement with Airbnb. Under this plan, the company would prepay a portion of the transient occupancy tax (the standard lodging tax collected from tourists) to the city of Los Angeles.
While exact terms are still being negotiated, the Los Angeles Times reports that a prepayment of $50 million has been discussed. According to LAist, Airbnb currently collects and remits an average of roughly $39 million annually in lodging taxes to the city.
“Airbnb is a committed partner to Los Angeles and its long-term prosperity” Justin Wesson, Airbnb’s senior public policy manager stated, as reported by LAist. “That’s why we have offered to provide tax revenue we already collect on behalf of hosts up front to help fund essential city programs millions of Angelenos rely on”.
The next steps
The proposals are currently moving through the standard municipal review process. The Los Angeles Times notes that the city is actively reviewing the budget. Until these legislative steps are finalized, current short-term rental regulations remain in effect.
