By Tim Redmond
JUNE 16, 2014 — The San Francisco Chronicle has finally noticed that Airbnb is having a huge impact on housing in the city, and although others have been talking about the problem – and the numbers – for some time, it’s good to see the city’s major daily lay out the figures.
But what’s remarkable about all of this – and goes entirely unaddressed in Carolyn Said’s story – is how San Francisco, a city often criticized for its labyrinthian system of permits and requirements for new businesses, allowed an entire industry based on illegal uses and violations of zoning codes to explode … without any real efforts at enforcing the existing laws.
In fact, documents obtained by 48hills through a Public Records Act request show that City Planning Department officials were aware of the problem at least since 2011 – and did essentially nothing about it until earlier this year.
And even as press reports and complaints began to put pressure on the department, enforcement was, and remains, extremely limited.
Over and over, the documents show that the enforcement process was entirely “complaint driven” – that regulators made no effort to do what the Chronicle (and before that, the Anti-Eviction Mapping Center and tenant groups) have done through easily accessible records: Find out who is breaking the law, taking housing off the market, illegally operating a hotel in residential areas, and make an effort to shut the operations down.
And when planners and City Attorney Dennis Herrera finally took on the most blatant cases, they involved other short-term rental companies, and not Airbnb – which has as a major investor the mayor’s close ally and biggest campaign donor, Ron Conway.
It’s as if the Mayor’s Office sent word over to planning not to mess with a local company that is now worth more than the Hilton Hotel chain – even if its entire business model is based on its users violating local laws.
A couple of weeks ago, at a Land Use Committee hearing, Sup. Scott Wiener complained about what he called “ridiculous” rules that make it hard for a small business that wants to sell beer at an entertainment place in the Mission to get the necessary permits. Whether a place that serves alcohol also has poetry readings is hardly a dramatic issue for the city’s housing stock, but city planners are careful to monitor and demand that every possible rule is followed.
And yet, Airbnb, which by almost all analyses has taken thousands of housing units off the market and made the housing crisis worse, gets nearly a complete pass.
And now Sup. David Chiu is working on legislation that would give the lawbreakers a pass in the future – and front-line city planners who have analyzed his bill think it doesn’t go far enough.
Ignoring the problem for years
I asked for all communications, internal and external, between anyone at City Planning and anyone else around short-term rental enforcement between 2011 and 2014. I still haven’t received every document, but I’ve been given access to several thousand pages, and a careful review shows some clear trends:
- While city officials were starting to flag the problem in 2011, there is almost nothing in the files that shows any serious efforts at enforcing the laws or even talking about it until early 2014.
- City planners have made every effort to say that they are not looking for violation, not “trolling” short-term rental websites, and only responding when somebody files a complaint.
- The number of actual enforcement actions is pretty slim: City planning staffer Adrian Putra noted in an April 4, 2014 memo that only three cases currently had violation letters out and fines accruing, only 15 had been closed since 2012 – and that in 75 percent of those cases, the units had been converted to permanent short-term use.
- City planning staffers have proposed that if short-term rentals are legalized, they should be limited to a few areas of the city, the number of permits should be limited, and companies like Airbnb should be held accountable for collecting and reporting information to the city. The current legislation by Chiu would apply citywide and would not have any limits on the number of units involved.
The first mention in the documents of any serious effort to get a handle on what by then was already a rapidly growing industry is an October 19, 2011 memo from Malcolm Yeung, who was then a senior staffer in Lee’s office, to the Planning Department’s enforcement folks.
“I would like to pull together a meeting next week to develop a briefing for our office on issues related to ‘illegal’ vacation rental conversions,” Yeung wrote. “Topics I would like to cover with you would be:
Overview of regulators, enforcement and monitoring scheme from each of your perspectives;
Estimated scope of loss of rental housing stock and estimated loss of hotel tax revenue
‘Problems’ with policy around this issue
Any proposed next steps.”
I haven’t been able to reach Yeung, who has since left the Mayor’s Office and is now deputy director at Chinatown Community Development Center, but there is nothing in the documents I’ve been given to suggest that anyone followed up after the meeting.
In the winter of 2012, an intern in the Code-Enforcement Division named Samuel Siegel did a detailed report on the short-term rental issue. His report found more than 2,500 Airbnb listings in the city, noted that most of them were illegal, and stated that enforcement was difficult.
In fact, all over the memos are arguments that it’s hard to enforce the laws against short-term rentals. “The Zoning and Complaince Division has struggled to bring short-term rental violations into compliance utilizing current enforcement tools,” a Feb. 25, 2014 memo from Audrey Butkus to Planning Director John Rahaim notes. “The cases are extremely difficult to prove and the profits from short-term rentals have proven too lucrative to prevent hosts from re-listing their short-term rentals on a different website.”
Part of the problem, as Said notes in her article, is that the Airbnb listings don’t give addresses. Other sides, like Vacation Rentals By Owner (VRBO) give more information, including pictures.
But it’s hardly impossible. The Anti-Eviction Mapping Project has turned over to city officials a significant number of cases where it’s clear that a housing unit is illegally being used as a hotel room – and that group is staffed by a couple of volunteers who do the work in their spare time.
The city’s enforcement staff is small and overwhelmed – but the activists who are watching this freely share their information. It’s hard to see why more hasn’t been done.
We don’t look
Except for the fact that City Planning has a policy not to look for lawbreakers.
On April 9, 2014, Scott Sanchez, the zoning administrator, who oversees enforcement of the Planning Code, went on KQED’s Forum to discuss Airbnb and short-term rentals in the wake of a Chron article saying that the city was cracking down on short-term rentals. He was pretty cautious; in fact, he said, “I would challenge the notion that there’s a crackdown.”
Every single enforcement action, he noted, was the result of a complaint. There were no city staffers looking for violations.
Yet within hours, Christine Falvey, the mayor’s press secretary, was on the phone to the department demanding an explanation. Gina Simi, a communications person with City Planning, noted in a 10:44 am memo that day (just 44 minutes after Sanchez was off the air):
“Hey, per C Falvey’s request, I’m summarizing Scott’s comments on the show this morning. I’m saying that he did not speak to anything other than our priority being preserving existing housing stock and our primary concern being long-term rental units being taken off the market. That penalties are not our goal, we’re concerned with compliance. Anything else I should add?”
Christine Haw, an enforcement person, chimed in: “I would add that we are totally complaint-driven and do not troll websites.”
In fact, a few weeks earlier, Haw wrote to Planning Director Rahaim to say: “Since July 1, we have sent 17 Enforcement Notices and 4 Notices of Violation and Penalty. We anticipate sending more in the coming weeks. These notices are standard practice. We are totally complaint driven. We are not trolling through Airbnb or other hosting platforms. We don’t need more cases!”
I sent Haw an email to ask why she didn’t need more cases; I haven’t heard back.
Wow, that’s shocking
If you take the figures in the Chronicle as true, and while some say there are way more than 5,000 units taken off the market, we can agree that 5,000 is a lot, then a significant part of the city’s rental housing stock has been converted to hotels.
In one Jan. 13, 2014 email, city planning staffer AnMarie Rodgers responded to reports of the growing number of illegal rentals, saying: “Wow, that’s shocking, grain of sand and all: Approximately 1.3 percent of housing units are now listed as ‘entire unit’ vacation rentals on airbnb.”
While some of them are people actually “sharing” their homes with paying guests, the majority are apartments and homes that are no longer available for San Franciscans who desperately need a place to live. They are tourist hotels.
“The vast majority of our cases are entire unit rentals where the property has been permanently rented for short term use,” Haw noted in an April 8, 2014 email.
In a May 16, 2014 email, planning staffer Audrew Butkus notes “The are several companies right here in town who are managing over 50 properties through one of the larger hosting platforms. When we have a complaint case in which we find one of these agents to be managing the listings, it becomes all the more difficult to obtain leases, schedule site visits, etc as they are not considered a responsible party.”
Chiu has proposed legislation that would legalize the practice, with limits – only owner-occupied units would be allowed to use Airbnb, and the owners would have to live there 75 percent of the time.
At this point, his bill includes no limits on which parts of the city could become tourist hotels, or how many would be allowed.
There are city planning staffers in the middle of this. Let me say: Many are trying to do their jobs with limited resources. Some are probably not happy that they are getting so carefully watched by the Mayor’s Office, where Mayor Ed Lee is close to one of the people who stands to make a huge sum of money off Airbnb (and stands to lose a large sum of money if the entire business plan is shut down by cities like San Francisco).
When they analyzed what the city ought to do, they suggested strict limits on both the number of these short-term rentals and their location. A May 27 memo from Rodgers to Rahaim argues for “limiting the number of permits issued” and “limiting the types of zoning districts in which short-term rentals are permitted.” The memo also suggests “the ability to revote short-term rental permits if the holder is found to be in violation of the permitted conditions” and fines of up to $1,000 a day for repeat offenders.
Chiu may include some of that in his legislation by the time it gets to the final stage. In the meantime, an initiative that would pretty much end this game is likely headed for the November ballot.
And while that debate is going on, I wonder: Will every small business owner and homeowner who has tried to get a permit for the most harmless and modest stuff and has faced high fees and strict rules stand up and say:
Why is Airbnb, rich with investment capital and with a pal in the Mayor’s Office, getting away with ignoring all the rules – with full impunity?
Next: Are landlords using the Ellis Act to clear building for Airbnb?