On a tree-lined block of Orange Street in LA's Miracle Mile area, most of the apartments are rent-controlled units with longtime residents, except the lower level of a duplex two doors down from Scott Frank.
"It’s a lot of people coming and going all the time, it’s a lot of unfamiliar people in the neighborhood," Frank told the I-Team. "It’s definitely a nuisance."
That's because the unit a few doors from where Frank and his wife live with their young daughter is an illegal Airbnb.
It's illegal because it's not registered with the city, as required, and it's in a rent-controlled building, which is forbidden by LA's Short Term Rental ordinance passed in 2018.
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There’s partying, drinking, smoking…sometimes right out in the halls. It's like living next to a frat house.
Elden Rhoads, lives next to an illegal short-term rental
"We could not live in this neighborhood if we did not have a rent stabilized apartment," Frank told NBC4.
As the I-Team first reported in September, illegal short-term rentals are popping up in rent-controlled buildings all over the city, often rented by noisy tourists who party all night.
“There’s partying, drinking, smoking… sometimes right out in the halls," Elden Rhoads told the I-Team about the Airbnbs in her Mid-City building. "It's like living next to a frat house."
LA already has a serious shortage of affordable housing, but thousands of rent-controlled units are being turned into more profitable vacation rentals, like the one on Frank's block and in Rhoads’ building, according to the housing advocacy group Better Neighbors LA, which monitors enforcement of LA's Short Term Rental Ordinance.
"LA is in a housing crisis. The city is not issuing enough fines and penalties to stop these illegal vacation rentals in rent-controlled buildings," says Alllison Kirste of Better Neighbors LA.
The city fines me in one flat second if I park my car in the wrong zone
Scott Frank, frustrated neighbor
In fact, the NBC4 I-Team found the city of LA rarely takes tough action against illegal short-term rentals, four years after the city council passed a law giving three city agencies power to crackdown.
On Orange Street in the Miracle Mile, Frank's neighbors have been emailing the city since August 2020 about that illegal Airbnb on their block, complaining to their city councilman, to the city attorney, and to the city planning department which helps regulate short term rentals.
In August 2020, the city issued just a warning letter to the owner of the illegal Airbnb, then a second warning letter in November 2020. But two years later, the I-Team found the unit was still being listed on Airbnb.
The city could have issued a fine to the owner, but never did.
"The city fines me in one flat second if I park my car in the wrong zone or overload a meter," Scott Frank told the I-Team. "They should be issuing fines to the owners of these illegal vacation rentals in rent controlled buildings."
$500 is not a deterrent, but rather the cost of doing business for the owner of an illegal Airbnb
Allison Kirste, Better Neighbors LA
The I-Team obtained data on fines and citations issued to illegal short-term rentals, from the LA Housing Department, which regulates short-term rentals in apartments buildings.
Each of the last three years the number of citations with fines keeps dropping. And as of October 2022, the city had issued only two fines this year.
In most cases, the city issues fines of just $500, which is a small fraction of the thousands of dollars a host can make renting an illegal Airbnb in just one month.
"$500 is not a deterrent, but rather the cost of doing business for the owner of an illegal Airbnb," said Better Neighbors LA's Allison Kirste.
The I-Team asked the LA Housing Department to speak on-camera about it's lack of enforcement over illegal short-term rentals. After six attempts by the I-Team to schedule an interview, the Housing Department emailed a statement saying, "The process for citations and enforcement...[is] set by [city] Ordinance."
But even after the I-Team notified the Housing Department that the listing for the illegal Airbnb on Frank's block was still active, it didn't take action. The I-Team notified Airbnb, which promptly suspended the listing.
Statement from Los Angeles Housing Department:
The City uses an online registration and compliance system to register short-term rental hosts, monitor short-term rental activity, and identify and deter illegal short-term rental operations for properties within the City of Los Angeles. The registration process is designed to deny a registration number for properties that are not eligible for short-term rental, including properties covered by the City's Rent Stabilization Ordinance (RSO).
As part of the City's enforcement efforts, LAHD receives referrals regarding potentially illegal home-sharing activity at multifamily properties in the City. After review, LAHD authorizes the issuance of citations to multifamily properties found to be operating in violation of the City's Home-Sharing Ordinance. The process for citations and enforcement as well as the amount of fines issued for noncompliance are set by Ordinance, and LAHD operates pursuant to those provisions. The amount of fines for Home-Sharing Ordinance violations was recently increased pursuant to the provisions of that Ordinance.
In the specific case o[n] Orange Street, the host converted the listing to offer the property for rent for 30 days or more, which is not a short-term rental prohibited by the Home-Sharing Ordinance. However, the host also used a Beverly Hills address, outside of the City of Los Angeles, in an attempt to skirt the Ordinance requirements. LAHD is working with the City's monitoring and compliance system to investigate and pursue additional enforcement for continued short-term rental activity occurring in violation of the City's Ordinance.
Statement from Airbnb:
“There is no place on Airbnb for Hosts who circumvent the City of Los Angeles’ homesharing ordinance, and we suspended these listings as we investigate further. We will continue to work closely with city officials to address Hosts who try to evade the rules.”
