How are LA hosts thinking about STR rules with the 2028 Games coming?

[Michael Koeplin]

Been following the STR/Olympics fight playing out in LA and it's a pretty good case study in what happens when a housing-shortage city suddenly needs a tourism surge.

Quick context for anyone not deep in this: LA's Home Sharing Ordinance restricts short-term rentals to primary residences, with a cap of 120 days a year for non-primary stays, and Airbnb has been pushing the city to loosen that since 2018 without much luck. 

The Olympics changed the math. An Airbnb-commissioned Deloitte report claims LA and Orange County could be short up to 320,000 visitors on the busiest competition days, and that doubling STR capacity could cover most of that gap. That's the economic case in a nutshell.

On the other side, Mayor Bass put a temporary carve-out in her budget letting people rent out second homes just for the Olympics, set to expire at the end of 2028, and it drew an immediate protest at City Hall from faith leaders and housing advocates worried about pulling units off the long-term market. 

There's also a state bill, AB 1953, that would ease STR restrictions statewide during "special event periods," and opponents are warning landlords could use it as cover to not renew leases ahead of the Games so they can flip units to short-term at event pricing.

Here's the part that gets lost in the "loosen vs don't" framing though. Enforcement is tightening at the exact same time. An investigation found over 60 rent-controlled buildings already illegally listed as STRs, and the city's looking at more inspectors, bigger penalties, and a booking-verification system similar to what NYC uses. So you've got a temporary Olympic exception being floated in the same budget cycle as a crackdown on basically that exact behavior. Messy moment, not a clean story either direction. 

Worth noting it's not a slam dunk for the tourism side everywhere either. Manhattan Beach's council voted down a similar temporary allowance 3 to 1 despite public surveys showing majority support. 

If you're holding or eyeing LA-area STR property with the Games in mind, I'd treat any temporary loosening as exactly that, temporary, and underwrite the deal off the existing ordinance, not the exception. The exception is the piece most likely to get challenged, protested, or pulled early if it turns politically expensive.

Anyone actually operating in LA proper right now? Curious how you're thinking about the next two years. Buying for the Games specifically feels like a different bet than buying for the next decade.

Michael Koeplin

[Mike Grudzien]

I would just stay out of LA market