LOS ANGELES -- Last week, an upstart company started providing furnished apartments for business travelers on Franklin Avenue in Hollywood. Its website describes a "tastefully renovated" apartment complex with "laid back West Coast DNA" and a feeling of "whimsical Italian modern maximalism."
Tony Diamond, the founder of the company behind the project, said the owner of the 30-unit, rent-controlled apartment building worked with him for a simple reason: A studio at the complex near the iconic corner of Hollywood and Highland previously was advertised at $1,800. Once it was gutted, furnished and given a boutique-hotel flair, a traveling nurse agreed to rent it for $3,300 a month.
"Word is spreading and so landlords are coming to us," Diamond said, standing in front of the complex's kidney-shaped pool. "They love the partnership."
But by reducing the stock of apartments marketed to tenants who want a home and turning them over to business travelers and others willing to pay top dollar for temporary housing of at least a month, companies have drawn fire from housing advocates.
"Quite frankly, it's those types of practices that contribute to our affordable housing crisis," said Larry Gross, executive director for the Coalition for Economic Survival.
Several Southern California cities that previously cracked down on nightly stays through platforms such as Airbnb are now turning their eyes toward apartments rented for at least a month, but to people who don't plan on living in a community permanently.
The city of West Hollywood even sued the owner of a residential complex on Sunset Boulevard, alleging the company decreased the city's housing stock by running a "hotel" out of what was supposed to be a traditional apartment building. And the Santa Monica City Council this month is set to discuss requiring initial lease terms of at least 12 months.
It's unclear how many units are being marketed as furnished apartments for people who are passing through. Extended-stay apartments have existed for decades, with Los Angeles firm Oakwood Worldwide helping pioneer the concept known as corporate housing.
But a group representing the corporate housing industry said demand for extended-stay, furnished apartments has been on the rise, a function of business expansion and the popularity of online short-term rental sites.
"The big lens shift was Airbnb," said Lee Curtis, chairman of the Corporate Housing Providers Assn. "It opened up the idea to the world that there were different ways to stay (other than hotels)."