LA City Council calls for law requiring hotels to replace lost housing

LOS ANGELES - The Los Angeles City Council Tuesday called for an ordinance that would require developers of new hotel properties to replace any permanent housing lost in the process.

After listening to more than an hour of public comment both pro and con, council members voted 14-0 to instruct the city attorney to review the proposed law, work with city departments to finalize it and present it to the council for approval. Councilman Bob Blumenfield was absent during the vote.

"This is really an important step forward for our city and for our tourism industry," Council President Paul Krekorian said prior to the vote. "This motion that's before you submits a draft ordinance to the city attorney, so that the city attorney can report back to us with an ordinance that we will then be able to vote on."

He added, "This ordinance would ... require developers to replace housing lost to hotel construction. It would empower community input for consideration of new hotel development and expansion, and its impact on communities."

The law would also provide the city tools to address nuisance hotels and prevent the use of short-term rentals as "party houses."

The motion was drafted by the office of Krekorian, and backed by council members Hugo Soto-Martinez, John Lee, Katy Yaroslavsky, Nithya Raman, Bob Blumenfield and Traci Park.

Krekorian said his office drafted the proposed law in collaboration with Unite Here Local 11 hospitality workers union and representatives of the hotel industry. The law would replace a ballot measure, similar in intent, sponsored by the Unite Here Local 11, which was set to appear on the March 2024 ballot.

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The ballot proposition will be withdrawn when the ordinance is enacted, officials said.

The proposed ordinance would also bolster public oversight over short-term rentals, hotels and other properties that create a public nuisance when used as "party houses" or for other criminal activities; and increase the supply of interim housing available to the city.

Specifically, the ordinance would require new hotel developments to obtain a conditional use permit, or CUP.

The process for obtaining the permit would involve public review that would consider a proposed development's impact on the existing housing supply and require developers to replace any housing that would be demolished or otherwise lost in the neighborhood, according to Krekorian's office.

In addition, it would require hotels, proposed or existing, and short-term rentals, to obtain a police permit, through a process that would screen owners and operators of such properties for prior criminal activity or any history of creating a public nuisance.

Lastly, the proposed ordinance would create a voluntary registry in which participating hotels would notify the city of vacant rooms that can be made available for interim housing.

While Councilman Tim McOsker supported the motion, he said he wanted to better understand how the law would impact the Los Angeles Police Department, which is assigned to review permits and in certain circumstances inspect short-term rentals such as homes being used for AirBnB.

LAPD Lt. Scott Moffitt, a commanding officer with the Criminal Investigation Division, said if the law is enacted the department would be tasked with processing more than 9,000 permits.

"Generally, we process about 4,000 to 5,000 permits a year, so this would more than triple our work, bringing us up to about 15,000 permits per year that initial lift," Moffitt said.

Moffitt noted that a portion of the work would involve renewals, which he described as "a lot easier to process," and there would be additional work involved in the enforcement aspect. He also advised the hiring of five civilian workers to help process the permits and five sworn personnel to assist in the enforcement.

Recognizing the amount of work LAPD handles, Councilwoman Eunisses Hernandez said the city should explore moving the permit review process to another department, such as the Housing Department.

Council President Pro Tem Marqueece Harris-Dawson agreed with Hernandez, noting that by having police involved in the permitting process, it may dissuade individuals from home sharing.

"I just want to register that and make sure that's part of the discussion as we go forward," Harris-Dawson said.

Krekorian assured the council members that the proposed law allows the operation of short-term rentals, and that hotels can continue for up to six months before an application is required. He also said there would be ample time to discuss the law and conduct a fee study.

Unite Here Local 11 members, hotel representatives and housing advocates voiced their support of the motion. Many acknowledged the proposed law would safeguard housing and benefit the hotel industry as well.

"The city needs people," Claire Palmer, a member of Democratic Socialists of America Los Angeles, told council members. "The city needs to house people that live and work before we can build hotel that serve the world."

Palmer added, "We need to serve our communities first, and that's a huge part of what this measure does. Our city needs to preserve all the housing we have because it is workers who are dealing with skyrocketing rents."

But many homeowners who rent out rooms or their homes short term, plus mom-and-pop motel and hotel owners, filled the Council Chamber to oppose the motion. Many were concerned about the permit process, which may involve public hearings, mandatory fingerprinting, background checks and require additional fees.

Rahul Patel, secretary of the Asian American Hotel Owners Association's board of directors, claimed the language in the proposed law is "anti-small business and adverse to our owners' communities."

"We're asking for a seat at the table," Ray Patel, president of the Northeast Los Angeles Hotel Owners Association, said during public comment. "I don't know if we were ignored, but the fact is 75% of the hotels in Los Angeles are family owned and jointly owned by people of color. You need to hear about our operations and take our input in crafting this piece of ballot measure that now turned into an ordinance."

Vanessa Johnson, a South L.A. resident who receives extra income from home sharing, said in a statement that the process would create an "unnecessary layer of bureaucracy."

"I urge you to remove short-term rental hosts from this rushed closed door deal negotiated by hotels and the hotel worker union that has nothing to do with residents who share their home," Johnson said.

Addressing the concerns from stakeholders who opposed the motion, Krekorian said the draft ordinance would provide an "automatic acceptance of an application for the police permit."

"All you have to do is apply and unless there is opposition presented by someone, that application will automatically be approved," Krekorian added. "There's not going to be a police inspection of your home or any of the other things ... unless there's a reason for opposition."

Councilwoman Monica Rodriguez added, "All stakeholders should be part of the conversation so that we can understand the full implications of the decisions that we're making as a council -- not as individuals, as a council."

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