Regulations adopted in 2014—the so-called “Airbnb Law”—formally legalizing short-term rentals under 30 days for the first time, are not achieving the desired compliance goals. According to the city’s Office of Short-Term Rentals, 2,207 hosting applications have been received, but only 1,717 have been approved. That’s a small percentage of the estimated 7,000 to 10,000 hosts currently in the business.

Short-term rentals have been highly controversial from the start due to the widespread perception, particularly among housing advocates, that they exacerbate the city’s housing shortage and contribute to a rise in evictions. The issue of regulating short-term rentals has remained at the forefront of the political debate.

When Board of Supervisors President London Breed voted in favor of the 2014 law, she said that further changes might be required should things not work out well. With the support of Supervisors Aaron Peskin and David Campos, she has introduced legislation that would dramatically reduce San Franciscans’ legal right to engage in short-term rental business.

Supervisor Peskin, who believes the current law isn’t working, stated: “(Supervisor Breed’s) common sense amendments are based on independent analysis in an attempt to weed out the bad actors who are exacerbating the city’s housing crisis, while letting mom and pop hosts make ends meet . . . I commend President Breed for taking decisive action and crafting a package that rewards those who respect San Francisco’s laws and who have registered their units and are paying their taxes.”

Under current law, registered hosts can, without limit, rent out housing units as short-term rentals if they remain onsite and live in the unit at least 275 days a year, but only for 90 days annually if they are not present on-site as hosts. Critics of the law have argued that it is impossible for the city to verify if a host is on-site or not. Supervisor Breed’s legislation supposedly addresses this verification problem by imposing a substantially reduced 60-day annual hard cap on the total number of days a housing unit can be rented out short-term, whether the host lives on-site or not. Registered hosts would be required to live on the premises for at least 275 days of the year, as before. The unlimited days allowed for live-in hosts has thus been eliminated in favor of a general 60-day limit for everyone. Supervisor Breed says she chose the 60-day figure after determining it was the right balance between not being so lucrative as to incentivize owner hosts to keep units off the rental market but long enough to allow owners and tenant hosts (ed.: with owner consent, of course) to earn significant supplemental income.

Those who registered or submitted a completed application to register with the Office of Short-Term Rentals before October 11, 2016 are grandfathered in to the old rules. Registered hosts would continue to have to live on the premises for at least 275 days of the year, a provision that was written into the original 2014 law as a way to ensure long-term residents are engaging in the practice, not those engaging in the practice as a dedicated business.

This legislation comes after Airbnb sued the city in June over an added regulation approved by the Board of Supervisors requiring short-term rental companies to list only legal housing listings on their websites or face fines of up to $1,000 per day. Specifically, it required short-term rental websites to post registration numbers on listings or email the number and name of the host to The City’s Office of Short-Term Rentals. The lawsuit is pending.

 

Reprinted with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News.  For more information on becoming a member of SPOSFI or to send a tax-deductible donation, please visit their website at www.smallprop.org or call (415) 647-2419.