What is the status of West Hollywood’s short-term-rental market?
The West Hollywood short-term-rental market just entered a new phase. Two factors have changed:
- The City made it legal for homeowners to host paying guests under some conditions. The prior ban continues for unhosted stays and short-term rentals in residential rental properties, due to concerns about the potential impact on housing supply and neighborhood quality of life.
- The City has hired a specialized firm, Host Compliance, to bolster its enforcement efforts. Violators get a warning first. If fines become necessary, they begin at 400% of the nightly rate multiplied by the minimum number of nights.
In this report, we check on the current size and growth of the short-term-rental market, so we can track future trends.
There are now approximately 1,200 short-term-rental properties in West Hollywood, according to numbers provided by the City. The total number of listings is closer to 1,400. Some rentals are listed on more than one platform. About 7 out of 10 listings are for the entire home. Most of the rest are for a private room. We looked at the geographic distribution of listings in a prior report.
The number of short-term-rental properties grew 42% in the past year. The number of listings increased 35% over the same period.
We wondered whether that growth was faster or slower than the year before. We know the all-platform total increased 35% from March 2017 to March 2018, but we don’t have the comparable number from March 2016 to March 2017. As a proxy, we’ll use the growth rate for Airbnb listings from May 2016 to May 2017. It was 29%. So growth in the past year was probably on par with — or a bit faster than — the year before.
Size compared to nearby communities
We created a metric to compare the relative size of the short-term-rental market in West Hollywood to other communities. It’s the number of Airbnb listings per 1,000 residential units. We have good estimates for cities, but the estimates for Los Angeles neighborhoods and unincorporated areas are very rough.
West Hollywood had 33 Airbnb listings for every 1,000 residential units in May 2017. That put West Hollywood in the middle among nearby communities. The adjacent City of Los Angeles neighborhoods were higher and the other Westside cities were lower.
The neighborhoods with larger short-term-rental markets included Fairfax, Hollywood Hills West, and Hollywood, which all had around 50 listings per 1,000 residential units. Beverly Grove’s market was also a bit larger than West Hollywood’s.
The nearby cities had smaller short-term-rental markets. Beverly Hills had 24 listings per 1,000 units, Santa Monica had 18, and Culver City had 14.
Growth compared to nearby communities
From May 2016 to May 2017, West Hollywood Airbnb listings grew almost 30%. The growth rates in adjacent Los Angeles neighborhoods were all higher. They ranged from about 50% in Hollywood to almost 90% in the Fairfax district.
In contrast, the growth rate was a third lower in Beverly Hills and Santa Monica at 20%. Culver City’s growth rate of about 15% was half of West Hollywood’s.
The chart below compares West Hollywood to the other communities in the region. The red star is West Hollywood. The blue points are other cities. The gray points are Los Angeles neighborhoods and unincorporated areas of the county. They’re gray as a reminder that those size estimates are very rough. If you put your mouse over a point, the name of the community will pop up, along with its size and growth numbers.
What does the chart say about market size?
- Venice had the biggest short-term-rental market in the region, with 93 listings per 1,000 housing units. Among cities, Malibu had the largest, with 46 listings per 1,000 housing units. (We’re not counting or showing communities with less than 100 housing units.)
- West Hollywood’s market was the second biggest among cities and thirteenth among all kinds of communities.
- The adjacent Los Angeles neighborhoods — Fairfax, Hollywood Hills West, Hollywood, and Beverly Grove — were all in the top 12 communities by market size.
What does the chart say about market growth?
- West Hollywood’s 29% growth rate was below average for big markets.
- The cities with the highest growth rates — up to 350% — had much smaller markets.
- Hermosa Beach was the only city where a sizeable short-term-rental market shrank.
http://wehobythenumbers.com/index.php/2018/03/19/what-is-the-status-of-west-hollywoods-short-term-rental-market/http://wehobythenumbers.com/wp-content/uploads/2018/03/201803-airbnb-growth-vs-relative-size.jpghttp://wehobythenumbers.com/wp-content/uploads/2018/03/201803-airbnb-growth-vs-relative-size-300x300.jpgBusinessHousingPerformance (effectiveness)airbnb,beverly grove,beverly hills,culver city,fairfax,hollywood,los angeles,santa monica,venice