Katherine Taylor, who had rented out her Westside guesthouse on Airbnb for the past four years, has decided to take her listing down this spring.
The extra income from the rentals had become vital for her, especially as living costs increased.
However, the mounting regulations and the looming possibility of fines prompted her to step back from the short-term rental market.
“I’m out,” she stated. “The rules are too much. All these new regulations kept popping up, and it felt like it was only a matter of time before I got fined.”
This sentiment is echoed by many other landlords across the L.A. region.
While short-term rentals offer higher income potential than long-term leases, they also bring about significant challenges, including frequent tenant turnover and increasing scrutiny from local authorities.
A recent decline in short-term rental registrations highlights this trend.
According to the Planning Department, active home sharing registrations in Los Angeles fell from 4,228 last July to 3,972 this July, marking a 6% decrease.
Different platforms show varying degrees of declines in rental listings.
Hospitable analyzed a sample of short-term rentals in the L.A. metro area and reported a staggering 44% drop year over year, with listings consistently declining each month.
Meanwhile, AllTheRooms observed a 13% decrease in Airbnb listings throughout L.A. County over the same period.
Conversely, AirDNA noted an 8% increase in Airbnb and VRBO listings in the L.A. metro area over the past year but highlighted a significant decline since January, especially in fire-damaged markets such as Altadena, Pacific Palisades, and Malibu.
Experts suggest multiple factors contribute to this downturn.
The devastating fires in certain neighborhoods significantly reduced available properties for rent, as many homes were destroyed, prompting those remaining to convert their rentals into longer-term housing for victims.
Others are embracing mid-term rentals—stays lasting over 30 days—as an alternative to short-term agreements, independent of the fire aftermath.
Jesse Vasquez, an entrepreneur who organizes a mid-term rental summit annually, explains that L.A. is a prime market for mid-term rentals due to the large number of visitors, including travel nurses, students, digital nomads, and individuals taking on extended projects.
Although mid-term rentals yield around 15% to 20% less income than short-term rentals, they offer reduced tenant turnover.
For instance, a three-bedroom, two-bath home in a desirable area might generate about $10,000 monthly as a short-term rental, but would still fetch approximately $8,000 as a mid-term option.
Airbnb’s CEO, Brian Chesky, has recognized mid-term stays as a significant growth opportunity, revealing that these bookings now account for 18% of the company’s business, up from 13% to 14% pre-pandemic.
Mark Lawson is another host who transitioned from short-term to mid-term rentals.
He formerly rented his San Fernando Valley home on VRBO for short weekend stays but has now restricted bookings to a minimum of 30 days.
“I got tired of having someone new in the house every few days,” Lawson remarked.
Short-term rentals have long sparked controversy.
While advocates argue they provide homeowners with additional income and offer tourists diverse lodging options, critics contend they’re exacerbating the housing crisis by removing long-term rental options from an already strained market.
To mitigate the impact on L.A.’s housing stock, the city enacted the Home-Sharing Ordinance in 2018, which regulates short-term rentals by mandating hosts can only rent out their primary residences and are required to obtain a license.
The ordinance did result in some decrease in listings—approximately 70% from 2019 to 2023—although some of this was likely due to the pandemic-induced downturn.
Last year, the regulations were expanded to unincorporated areas of L.A. County that were previously unaffected.
Nonetheless, thousands of hosts continue to operate without licenses or use fraudulent registration numbers, largely due to ineffective enforcement.
According to a report from the L.A. Housing Department, there were around 7,500 reported violations of the Home-Sharing Ordinance by October 2024, yet only 300 citations had been issued.
March 2025 saw the L.A. City Council approving new recommendations aimed at enhancing the enforcement of these regulations.
These measures are intended to provide the city with a comprehensive toolkit to address violations, including hiring 18 staff members for monitoring and imposing increased fines based on rental size—ranging from $1,000 for units under 500 square feet to $16,000 for properties exceeding 25,000 square feet.
The suggested approach even includes staffing going undercover in illegal rentals using prepaid cards to secure bookings and collect evidence against non-compliant hosts.
However, in a setback, the city’s $14 billion budget subsequently cut funding for many departments, delaying the implementation of these recommendations and leaving no new enforcement officers hired.
Despite this setback, the anticipation of stricter fines and enforcement measures has contributed to a chilling effect on the rental market.
Derek Jones, vice president at Hospitable, noted that regulations are the primary factor driving the decrease in short-term rental inventory among hosts.
He expressed that L.A.’s regulations incorporate stringent rules from other markets nationwide, adding layers of complexity and caution for current and potential investors.
With threats of $1,000 fines now applicable without prior warning, hosts are finding it too risky to maintain their listings when potential penalties outweigh their nightly earnings.
“Housing is expensive already, then you add high penalties and zoning that limits supply,” Jones emphasized.
Katherine Taylor is among those disheartened by the regulatory environment.
When she initially purchased her Westside property, a major selling point was its guesthouse, which she planned to rent out.
However, under the Home-Sharing Ordinance, strict limitations—including a maximum of 120 rental days per year—resulted in her feeling constrained.
Given that her rental space exceeded 500 square feet, the potential for fines escalating to $2,000 for first violations, $4,000 for second, and $8,000 for third ultimately led her to conclude the risks outweighed the benefits.
“I’ll keep an eye on how the city enforces the rules.
Maybe I’ll try it again someday,” Taylor reflected.
“But for now, it’s gonna stay empty.”
image source from：latimes
