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With the Olympics approaching and housing in short supply after recent fires, the city is moving to crack down on illegal rentals.
Last month, the Los Angeles City Council voted to crack down on a practice that councilmembers say is adding to the strain on the city’s housing supply: landlords turning homes — including rent-controlled apartments — into illegal tourist accommodations or party houses. The move comes in the wake of the devastating Eaton and Palisades fires that destroyed thousands of homes and thrust fire victims into an already tight rental market in search of affordable accommodations.
The city is seeking to beef up enforcement of a 2018 law that prohibits turning such housing into tourist rentals. Thus far, enforcement of the so-called Home Sharing Ordinance has been spotty. Last year, an investigation by Capital & Main and ProPublica found dozens of rent-controlled buildings, some of which operated as hotels, offered vacation rentals on Booking.com and Hotels.com; many more such properties are likely listed on Airbnb and other platforms that don’t publish their listings’ addresses. City officials have estimated that about 60% of short-term rentals in multifamily buildings are illegal.
“Because of poor communication between city departments and weak guardrails against bad actors, we have simply made no progress on this issue,” Councilmember Nithya Raman said, as she urged colleagues to support new enforcement measures.
The City Council action comes as demand for short-term rentals is expected to spike during the 2026 World Cup and the 2028 Olympic Games. The recent wildfires destroyed nearly 800 rent-controlled apartments in the city, further constricting the housing supply.
Capital & Main spoke to Murray Cox, the founder of Inside Airbnb, which tracks the company’s business in more than a hundred cities from Barcelona to Buenos Aires to Bozeman, Montana, using publicly available data. Cox was among the advocates who pushed to enact the tough 2022 law that has sharply reduced short-term rentals in New York City. He argues that despite years of lackluster enforcement, Los Angeles can effectively rein in short-term rentals and shore up its housing supply.
This interview has been edited for clarity and brevity.
Last month, the L.A. City Council voted to pursue policies that would:
The city is also planning to raise fines and hire hearing officers to preside over short-term rental cases. It has also asked the city finance department to report on how much revenue the city would lose if it stopped allowing hosts to offer year-round “extended” short-term rentals.
Capital & Main: Inside Airbnb has an eye on the industry across the planet: What is at stake for the city of L.A. as it tries to tighten its regulations ahead of the 2028 Olympics?
Murray Cox: I know that anecdotally, the number of listings on Airbnb in Paris and even the region surrounding Paris went up in a big way last year. But the big question is, did they come down? Do they increase the cost of housing? Were there illegal conversions?
It’s not just about people maybe making a few bucks during the Olympics, but also, will it incentivize people to realize, I can do this the whole year, even if it’s illegal?
Even without the Olympics, [Los Angeles city officials are] not enforcing their current regulations that they need to make the platforms accountable, that they need to make sure that people are not taking rent-regulated properties out of the market.
The wildfires destroyed thousands of Los Angeles-area homes. What are the implications for short-term rental regulation as the city rebuilds?
L.A. might want to think about what type of housing is going to be built. Are people going to build housing that might be purposely built for short-term rentals? Often when people get displaced, they can’t come back. And short-term rentals is one of those drivers. People might be thinking of rebuilding, but maybe not [homes] for people to live in, but for tourists.
L.A. plans to require Airbnb, Booking.com and other platforms to verify listings electronically, a system similar to New York’s. How does it work there, and is it effective?
[In New York], we’ve gone from 50,000 [short-term rentals during the pandemic] to 5,000 short term rentals. So, you know, I think it’s been really effective because of the type of regulation and the verification system [currently in place].
If you try to register a rent-regulated property [in New York City], you’ll be denied. If I knew your registration number, I couldn’t steal it and put it on my own listing. If I have two listings, I can’t use the same [registration] number on both. Those are some of the things I believe Los Angeles hosts have been doing.
Can the city of L.A. get its verification system up and running ahead of the Olympics?
I think Airbnb [and other platforms] relies on these things taking a long time, and they insert doubt into the process. They threaten to sue. They even sometimes volunteer to self-regulate, and it just kind of helps to kick the can down the road.
[Los Angeles] is three years away from the Olympics. I don’t see why you couldn’t optimistically change your ordinance, get it through quickly, prioritize it [and] have a tight timeline for implementation.
[A spokesperson for Expedia, which owns and operates Vrbo and Hotels.com, wrote in an email that it “is committed to continuing our work with the City of Los Angeles as it considers changes to local regulations on vacation rentals.” Airbnb public policy senior manager Justin Wesson noted in an emailed statement that the company has signed a voluntary “platform agreement” with the city to remove illegal listings, adding, “We continue to work closely with city staff to support their compliance efforts and encourage more platforms to enter into a platform agreement with the City.” Booking.com did not respond to Capital & Main’s emailed questions, including whether they would oppose a requirement to use electronic verification in Los Angeles and if they would take legal action to block or delay such a mandate.]
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