How Airbnb Short-Term Rentals Exacerbate Los Angeles's Affordable Housing Crisis: Analysis and Policy Recommendations
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How Airbnb Short-Term Rentals Exacerbate
Los Angeles's Affordable Housing Crisis:
Analysis and Policy Recommendations
Dayne Lee*
I. INTRODUCTION
Los Angeles, California, is in the midst of an affordable housing crisis.
Rents have increased by 7.3% in 2014 alone, and the median renting house-
hold already spends 47% of its income on housing.1 This crisis has added
fuel to the contentious debate over Airbnb, a startup technology company
that facilitates short-term rentals (STRs) of residential homes to tourists.
Whereas Airbnb and its users tout its positive effects on tourism, cultural
exchange, and the environment, its critics contend that Airbnb harms neigh-
borhoods, distorts the housing market, undermines labor unions, and exacer-
bates Los Angeles's affordable housing crisis. In regulating Airbnb,
policymakers seek to curb Airbnb's impacts on neighborhood character and
housing while harnessing the economic activity it brings.2
Employing legal, statistical, and secondary source analysis, this article
explores how STRs affect the price and aggregate supply of affordable hous-
ing rentals in Los Angeles, and how municipal policymakers can best regu-
late Airbnb. In Section I, I briefly outline the contours of Los Angeles's
affordable housing crisis, and describe Airbnb and its growth in Los Ange-
les. The topics of Section II are the effects that STRs have on rents and Los
Angeles's aggregate supply of affordable housing. Section III of this article
analyzes how and to what extent Airbnb leads to displacement, gentrifica-
tion, and segregation in Los Angeles's residential neighborhoods. In Section
IV, I assess strategies, regulations, and policies that municipal policymakers
and stakeholders can use to regulate Airbnb. Finally, in the Conclusion, I
recommend a set of regulations, taxes, and community-benefits agreements
that will force Airbnb to be a partner that promotes, rather than impedes, the
goals of affordable housing advocates.
* J.D. Candidate, Harvard Law School (expected 2017). The author gratefully acknowl-
edges professors Rick Su and Esme Caramello, as well as Eloise Lawrence for their advice
regarding this article. He thanks the dedicated Harvard Law & Policy Review editors for their
thoughtful editing and comments.
'See Los Angeles Home Prices & Values, ZILLOW (Sept. 30, 2015), http://www.zillow
.com/los-angeles-ca/home-values/ [http://perma.cc/J82K-A3F3]; Rosalie Ray et al., Impacts
of the Widening Divide: Los Angeles at the Forefront of the Rent Burden Crisis, UCLA LUSKIN
SCHOOL OF PUBLIC AFFAIRS CENTER FOR THE STUDY OF INEQUALITY, Sept. 2014, at 8, http://
issuu.com/csiucla/docs/ziman 2014-08w/I [http://permna.cc/P4GH-KFHW].
2 See, e.g., Steven Leigh Morris, Airbnb is Infuriating the Neighbors. Is it Time for New
Rules?, Los ANGELES WEEKLY (Jan. 22, 2015), http://www.laweekly.com/news/airbnb-is-infu-
riating-the-neighbors-is-it-time-for-new-rules-5343663 [http://perma.cc/4JG2-KAJM].](ViewImageLocal?handle=hein.journals/harlpolrv10&div=13&collection=&method=preview&ext=.png&size=3)
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How Airbnb Short-Term Rentals Exacerbate Los Angeles's Affordable Housing Crisis: Analysis and Policy Recommendations
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