Navigating Beverly Hills’ New Rules on Short-Term Rentals: What You Need to Know

An icon for luxurious living, Beverly Hills always sees an influx of visitors, resulting in the rise of short-term rentals.

Beverly Hills, CA has long been a sought-after destination for travelers seeking luxury, glamour, and the quintessential Southern California experience. With its high-end shopping, iconic landmarks, and proximity to Hollywood, it’s no wonder people flock to Beverly Hills whether to visit or to work. In response to the constant influx of visitors, short-term rentals have flourished, and platforms like Airbnb and Vrbo have enabled homeowners to earn extra income by hosting visitors.

However, these rentals have also led to controversies surrounding community disruption, housing shortages, and public safety. Beverly Hills, CA stands as a global icon of luxury, and long-time residents are committed to preserving its reputation for exclusivity and privacy. As such, many view short-term rentals as a potential disruption to the community’s character and tranquility.

In November 2024, the city conducted a review of its short-term rental policies and is considering adopting more stringent rules and regulations. If you’re a homeowner, visitor, or investor in the city, it’s essential to understand these proposed changes, their motivations, and how they could impact you.

This guide breaks down everything you need to know about Beverly Hills’ short-term rental rules and the changes you may expect.

BEVERLY HILLS SHORT TERM RENTALS: RULES AND CHALLENGES

Beverly Hills has some of the strictest regulations on short-term rentals in the state of California.

Current Regulations

When it comes to short-term rentals, Beverly Hills has some of the strictest regulations in the state of California. These are the rules currently imposed by the city:

For single-family homes

In most areas of California and the rest of the country, short term rentals are defined as leases lasting less than 30 days. In Beverly Hills, however, short-term rentals are officially defined as “renting/leasing a home for a period of less than six months.”

In other words, short-term rentals, or renting a home for less than six months, is generally not permitted in the city. This applies to single-family residential units as well as to any accessory dwelling units (ADUs) within a property.

There is an exception to this rule, however. Property owners may rent out their homes or an ADU for periods shorter than six months, but they can only do it twice in every calendar year. This exception was introduced to provide homeowners with an opportunity to generate additional income while limiting the frequency of such rentals to prevent misuse of the regulation.

For multifamily residences

For multifamily or mixed use properties, short-term stays of less than 30 days are strictly prohibited. However, month-to-month rentals are permitted, allowing tenants to lease a residence for one month at a time with the option to renew the contract monthly.

Why Are Short Term Rentals Heavily Restricted in Beverly Hills?

Short-term rentals are restricted in Beverly Hills due to several key concerns that the city aims to address:

1. Preserving Community Character

   Beverly Hills, CA is cherished for its beautiful neighborhoods, luxury homes, and close-knit community feel. When short-term rentals bring a steady flow of transient visitors, it can disrupt this vibe, turning peaceful residential streets into revolving-door tourist spots instead of the stable, long-term communities residents love.

2. Addressing Noise and Disruption

   Many residents have voiced concerns about noise, parties, and late-night disturbances from short-term renters. With new guests coming and going frequently, there’s a higher chance of disruptive behavior, which can really impact the overall quality of life in these neighborhoods.

3. Public Safety Concerns

   Having a constant stream of unfamiliar faces in the neighborhood can raise safety concerns. When there’s always someone new, it’s harder for neighbors to recognize who belongs in the area, which can lead to anxiety over security.

4. Preventing Housing Shortages

   Short-term rentals can reduce the number of homes available for long-term residents. Since short-term stays can be more profitable for property owners, this trend can worsen housing shortages and drive up rental prices for those who want to live in the area full-time.

5. Regulating Property Use

   Beverly Hills’ zoning laws are designed to keep residential areas focused on permanent residents. If short-term rentals become too common, it could undermine these zoning goals, effectively turning homes into mini-hotels, which isn’t what these neighborhoods were meant to be.

Enforcement of Short Term Rental Regulations

Short-term rentals have surged in popularity over the past decade, largely due to platforms like Airbnb, Vrbo, and other online services. These platforms made it easy for homeowners to list their properties and for visitors to find unique and often more affordable accommodations compared to traditional hotels.

In response to this growth, Beverly Hills has implemented a series of measures to manage the impact of short-term rentals on residential neighborhoods. However, enforcement challenges and the ongoing popularity of platforms like Airbnb have continued to strain the current regulatory framework.

As stated in the city’s official website, Beverly Hills officials monitor vacation rental websites to check for any violations of the short-term rental code. Residents are also encouraged to file complaints about suspected violations to be acted upon by the city.

Enforcement Challenges

The city has faced several challenges in enforcing its existing short-term rental regulations:

1. Inconsistent Compliance: Despite prohibitions, many property owners continue to list their homes on short-term rental platforms, often skirting the rules.

2. Limited Resources: The city has struggled with limited resources for identifying and penalizing violators, making it difficult to keep up with the rapid turnover of listings.

3. Technological Barriers: Platforms like Airbnb and Vrbo do not always provide detailed property information to city authorities, complicating enforcement efforts.

4. Resident Complaints: Many residents have voiced frustration over the lack of consistent enforcement, leading to calls for stricter rules and harsher penalties.

THE FUTURE OF SHORT-TERM RENTALS IN BEVERLY HILLS

Beverly Hills is considering several strategies to keep short term rentals at a minimum.

In response to these challenges, Beverly Hills is considering several strategies to strengthen enforcement. On November 14, 2024, the city’s Planning Commission voted to draft an ordinance to be recommended to the City Council for review. The proposed ordinance contains new short-term rental regulations, including:

• Short-term rentals would be prohibited in single-family and multi-family residential zones, as well as in Mixed Use Overlay zones and other overlays. This change eliminates the current regulation that permits short-term rentals for single-family homes twice per year. The prohibition includes accessory dwelling units or any other accessory structures or features on a property.

• Short-term rentals would be redefined as follows:
  • Less than 12 consecutive months of use (instead of the current 6 months) for single-family residential zones
  • Less than 6 consecutive months of use (instead of the current one month) for multifamily residential zones. However, after the initial 6-month term, the lease may transition to a month-to-month renewal agreement.

• Standard fines and penalties to the maximum allowed by California laws will be imposed for violations of the code

The draft ordinance is tentatively scheduled to be presented to the City Council on January 28, 2025.

To improve enforcement and monitoring of violations, the planning committee also recommended that all landlords be required to register their properties. This is expected to streamline the process of tracking and addressing code violations.

Potential Disadvantages of the Proposed Regulations

The new regulations attempt to balance community preservation with the needs of homeowners and visitors, but they come with trade-offs that impact different groups in various ways.

Here’s a look at the potential disadvantages of the new regulations:

1. Limits Income Opportunities for Property Owners

   Homeowners who rely on short-term rentals for supplemental income may lose a flexible revenue stream due to the stricter rules.

2. Affects Short-Term Professionals

   Individuals who need temporary housing for work, such as traveling nurses, corporate employees, or entertainment professionals, may struggle to find accommodations due to longer lease requirements.

3. Potential Decline in Tourism

   Limiting short-term rentals could reduce the number of tourists who prefer vacation rentals over hotels, potentially impacting local businesses that benefit from visitor spending.

4. Increased Administrative Burden

   Requiring registration of rental properties creates additional paperwork and administrative tasks for landlords and city officials.

5. Enforcement Challenges

   Even with stricter rules, enforcing these regulations can be difficult and resource-intensive, particularly in identifying and managing violations.

6. Impact on Property Values

   Restricting short-term rental opportunities could make properties less attractive to investors, potentially affecting property values in certain areas.

What Can Investors Do to Address These Forthcoming Changes?

Investors can take strategic steps to adapt to the proposed short-term rental regulations.

The new short-term rental regulations in Beverly Hills may impact some real estate investments, but opportunities for profitable ventures remain strong. Approximately 42% of the city’s residents are renters, and a significant number of people stay in the city temporarily for work, ensuring continued demand for rental properties.

Investors can proactively adapt to the proposed short-term rental regulations to safeguard their investments and ensure compliance. Here are strategic steps to consider:

1. Transition to Long-Term Leasing: With the Planning Commission recommending extending minimum lease terms to one year for single-family homes and six months for multifamily units, shifting focus to long-term tenants can provide stable income and align with the new rules.

2. Diversify Investment Strategies: Explore alternative real estate ventures such as:
   • Corporate Housing: Catering to business professionals requiring extended stays.
   • Furnished Rentals: Offering fully furnished properties for medium-term leases to attract tenants seeking temporary accommodations without the need for short-term arrangements.

3. Engage in Policy Discussions: Participate in community meetings and discussions to stay informed and potentially influence policy decisions. Active involvement can provide insights into regulatory changes and offer a platform to voice investor concerns.

4. Enhance Property Appeal: Invest in property upgrades to attract long-term tenants, such as modern amenities, energy-efficient appliances, and enhanced security features. High-quality properties are more likely to secure reliable, long-term occupants.

5. Consult Legal and Real Estate Professionals: Seek advice to navigate the evolving legal landscape and ensure all rental activities comply with local ordinances. Professional guidance can help mitigate risks associated with non-compliance.

FAQS: NEW RULES FOR SHORT-TERM RENTALS

1. What are the proposed changes for short-term rentals in Beverly Hills?
   The new rules recommend stricter regulations for short-term rentals. These include limiting eligible properties, setting a minimum stay duration, and increasing enforcement with penalties for violations.

2. Why is the city implementing these stricter short-term rental rules?
   The main motivations are to preserve the character of residential neighborhoods, address complaints about noise and disruption, and enhance public safety.

3. What are the current regulations for short-term rentals in Beverly Hills?
   Current rules include restrictions on who can host short-term rentals, zoning limitations, and some enforcement mechanisms. However, these are now considered insufficient to address ongoing issues.

4. How have platforms like Airbnb and Vrbo affected the local housing market?
   While these platforms have boosted tourism and provided homeowners with additional income, they’ve also sparked controversy, including concerns about noise, housing shortages, and neighborhood disturbances.

5. What are the potential penalties for violating the proposed short-term rental rules?
   Under the new guidelines, violations will face increased enforcement and penalties, though specific fines or consequences will be clarified once the rules are finalized.

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