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San Francisco’s Airbnb-Friendly Law Closer to Reality, Despite Challenges

Aug 09, 2014 11:00 am

Skift Take

The rejection of the 90-day limit is an enormous win for Airbnb. Limiting rentals to 90 days a year basically cuts Airbnb’s potential income in San Francisco by 75%, and removes the incentives to illegally convert residential units for transient purposes.

— Jason Clampet

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Airbnb

A listing for an apartment in San Francisco. Airbnb


San Francisco moved closer to legalizing the use of homes as hotels late Thursday night when the City Planning Commission voted 4-2 to support and toughen a proposed ordinance on the controversial practice.

The vote came after a 6 1/2-hour meeting packed with scores of people whose comments demonstrated the sharp divisions among San Franciscans about the issue.

“We look forward to building on this work as we move forward through the legislative process at the Board of Supervisors,” said board President David Chiu, who spent two years crafting the proposed law to regulate short-term rentals. “I’m grateful to the Planning Department for their helpful and constructive feedback and recommendations.”

Right now, San Francisco bans almost all short-term residential rentals, but rarely clamps down on the practice, as evidenced by thousands of listings on Airbnb, VRBO and other sites. Chiu’s proposal — informally dubbed “the Airbnb law” as a nod to the runaway popularity of the San Francisco company’s hospitality website — would create a framework for tourist rentals in private homes, while mandating the creation of a city-run registry, the collection of hotel taxes and limitations on rental frequency.

The commissioners appeared to informally agree that the city should allow people to rent out a spare room to temporary visitors. Several said they were moved by heartfelt stories by dozens of Airbnb hosts, who said such rentals allowed them to keep their homes, care for ill relatives, pursue education and otherwise help with financial plights.

No 90-day Cap

In fact, the commission rejected an idea to cap room rentals at 90 days a year, instead saying it wanted the supervisors to consider a limit “somewhere between 90 and 364 days,” as commissioner Rich Hillis said.

More on Airbnb in San Francisco:

But the real bone of contention is that most temporary rentals in San Francisco are of entire houses or apartments. A Chronicle investigation showed that two-thirds of Airbnb listings are whole units. Many housing advocates assert that the practice removes much-needed housing and drives up prices.

Not surprisingly, none of the many Airbnb hosts who spoke said they had deliberately turned a unit into a more-lucrative full-time hotel — a confession that would have incited quite a stir.

Chiu’s requirement that hosts be permanent San Francisco residents “is a way to address the problem about losing long-term rental units,” said commissioner Michael Antonini.

Landlords, who showed up at the meeting in force, say they should have control over who has access to their buildings. That point registered with commissioners, who added a clause that property owners must be notified and given 30 days to object when their units are listed with the new city registry for short-term rentals. Several commissioners noted that any regulations would not supersede existing leases and condo association agreements that already ban subletting.

Unions Concerned

Hotel unions representatives at the meeting said they’re worried the impromptu rentals would cost jobs. The city’s Hotel Council said its main concern is that rental platforms should collect and remit the hotel tax.

Other than rejecting a 90-day limit on room rentals, the commission voted to support recommendations by the planning department while adding additional measures.

Commissioners added a provision to encourage the supervisors to provide funding and other resources for enforcement — something Chiu said afterward was a good idea.

Commissioners Kathrin Moore and Hisashi Sugaya opposed the measure, saying the far-reaching issue needs further study. Commission President Cindy Wu was not present for the vote.

Sugaya, along with commission Vice President Rodney Fong and commissioner Christine Johnson complained that Airbnb — which did not appear at the meeting — had not provided basic information on San Francisco rentals, such as their locations and occupancy rates.

“It leads me to wonder how honest and forthright the platforms will be about reporting,” Fong said. Planning’s decision calls for Airbnb, VRBO and others to report to the city how many nights each unit is occupied so that a 90-day cap on rentals of multiunit buildings can be monitored.

Provisions Added

Commissioners also added provisions that would bar single-room occupancy hotels from offering vacation rentals and suggested that supervisors consider limits on below-market-rate units.

Expressing concerns about insurance, fire safety and compliance with the Americans with Disabilities Act, commissioners said they hope the supervisors would tackle those issues.

Overall, the lengthy meeting illustrated the matter’s complexity.

“There are so many hanging pieces it’s like grabbing spaghetti,” Fong said.

Chiu’s proposal will be heard by the supervisors’ Land Use Committee in September and finally the full board, which can decide to accept or reject the planners’ recommendations.

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