LA City Council Inaction Will Bring Unintended Consequences for Small Businesses

LA City Council Inaction Will Bring Unintended Consequences for Small Businesses

By Julian Canete.
Julian Canete is the current President & CEO at the California Hispanic Chamber of Commerce (CHCC) which represents the business interests of over 800,000 Hispanic-owned businesses. The CHCC is the premier and largest regional ethnic business organization in the nation that promotes the economic growth and development of Hispanic entrepreneurs by focusing on advocacy, empowerment and education.

Small businesses are the lifeblood of our economy. All of us, at some point during our daily grind, interact with a small business owner in some way – mainly through service industries. In Los Angeles County, where Latinos make up nearly half the population, nearly a quarter of all working Latinos are employed in service occupations.

Any disruption to small business reaches far and not only impacts many thousands of owners and employees, but the many communities they serve as well. Unfortunately, such a disruption is looming over the City of Los Angeles. The city will begin to debate the fate of the local vacation home rental industry, and with it the thousands of small business owners and employees that rely on this industry for their livelihood.

Late last year, the primary-only, short-term rental ordinance was passed with new regulations set to take effect on July 1 of this year. That ordinance completely excludes secondary, whole home vacation home rentals, and threatens to negatively impact not only the thousands of owners that dutifully pay tax to the City of Los Angeles and whose homes drive local tourism but also the many ancillary groups that depend on the vacation home rental industry for their livelihood. Maintenance workers, gardeners and landscapers, the house cleaners, and the small businesses that enjoy local tourist dollars will all be impacted without an ordinance that responsibly regulates the vacation home rental industry.

The groups standing against a comprehensive policy to regulate the vacation home rental industry claim that short-term rentals are a root cause of the affordable housing crisis in Los Angeles. The truth is that whole-home vacation rentals make up a small fraction of the local housing market – less than 1% – but have a long history of creating economic opportunity for local residents and small business owners, particularly in the service industry sector. No data supports the claim that short-term rentals are causing affordable housing issues in the city.

Local owners should be allowed the right to rent their property—regardless of whether it’s their primary or secondary residence. The city is charged with crafting a solution that balances the needs of all sides to ensure consumer choice and prosperity for local residents and small businesses. Los Angeles voters agree – a recent poll conducted by Fairbank, Maslin, Maullin, Metz and Associates and commissioned by the Los Angeles Vacation Home Rental Association found overwhelming support for vacation rentals from Angelinos across all demographics. A vast majority of voters believe it is important to allow homeowners to rent their properties as whole-home vacation rentals and are opposed to any type of ban on traditional vacation home rentals.

Moreover, 81% of voters understand that whole-home vacation rentals are important to the local economy and tourism industry. They understand the role that vacation rentals play in their neighborhoods, and expect their elected representatives to step up and deliver an ordinance that responsibly regulates the vacation home rental industry.

The Los Angeles Planning and Land Use Management committee has a great opportunity to bring the entire vacation home rental industry under the umbrella of short-term regulation. Many homeowners I’ve spoken to and heard stories from want to be part of the City’s policy to regulate short term rentals. Homeowners are not running away from this policy and only want to be part of the greater plan to increase accountability from short term renters and have clear guidelines on how to conduct business in Los Angeles.