Airbnb, HomeAway, and other home-sharing companies that have operated in a legal gray area in the city of Los Angeles are girding for a battle with hotel owners that claim the upstarts are cutting into their business.
In advance of City Council hearings next month, both sides have engaged high-powered lobbyists to make the case to council members. Now hoteliers are taking things further by partnering with their traditional nemeses, labor unions, in pushing for strict limits on short-term rental operators.
Two weeks ago, a coalition of hotel and labor groups sent Mayor Eric Garcetti a letter urging him to delay tax collection from Airbnb hosts, saying the tax agreement gives Airbnb legitimacy even as city officials are considering prohibitions on some types of short-term rentals. Airbnb agreed to a deal with the city in July to start collecting a 14 percent lodging tax from renters.
“This is such a hot-button issue for us right now that we are making common ground with groups that had previously been on the other side from us,” said Robert Amano, president of the Hotel Association of Los Angeles. Just three years ago, Amano was blasting the Hotel Employees and Restaurant Employees union and its nonprofit ally, the Los Angeles Alliance for a New Economy, for pushing broader living-wage legislation for hotels; now, all three groups have signed the letter to Garcetti.
Airbnb spokeswoman Allison Schumer said the tax deal struck earlier this summer is the core of a compromise that allows the San Francisco company to operate in Los Angeles.
“We have a commitment to pay taxes as part of our community compact in every city that we operate in,” she said.
The tax deal is only one skirmish in the larger battle set to play out before City Council committees in the second half of September. Hoteliers contend Airbnb and similar home-sharing companies have increasingly penetrated the multifamily market, turning some former apartment buildings into de facto hotels that compete with established hotels.
“It’s turned into something way beyond just a way for a struggling homeowner to make ends meet by renting out that extra room for a week or two at a time,” Amano said. “It has now become a commercial enterprise going after the heart of the hotel business, especially at smaller hotels.”
One local hotel operator who benefitted from overflow bookings during major citywide conventions said his hotel has seen a drop since Airbnb started operating here.
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