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Friday, July 30, 2021

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UncategorizedFlawed Airbnb legislation takes effect -- as problem proliferates

Flawed Airbnb legislation takes effect — as problem proliferates

New map shows there are short-term rentals in every part of town. How can weak regulation ever control this loss of housing?

48hillsairbnbmap
Click in the map to see how many Airbnb units there are in your neighborhood. (The exact locations are rough, so you can’t tell if a particular building is being used, just the basic area.)

 

By Jennifer Fieber

JANUARY 20, 2015 — On February 1, new short-term rental legislation will kick in. Its purpose is to regulate the Wild West of illegal vacation rentals in San Francisco. In theory, hosts now renting to tenants for fewer than 30 days will register with the city and meet insurance requirements. The law also promises to stop real estate professionals who often have dozens of units on Airbnb for year-round tourist use.

However, the legislation is fundamentally flawed—it contains serious enforcement weaknesses and giant loopholes. Instead of providing a solution to the problems of unregulated, short-term rentals—loss of permanent housing, increased rent expectations, and irritation and safety issues for neighbors—the legislation legalized the practice year-round and left few tools to curb abuse.

And as this map shows, the proliferation of short-term rentals has hit every neighborhood in San Francisco.

The weakness of the legislation is hardly surprising given the inflexibility of the Airbnb lobby. David Chiu, who authored the legislation, was rewarded for his efforts with a $750,000 independent expenditure on his behalf, and now heads to Sacramento while San Franciscans are left with his mess.

The Planning Department will be in charge of enforcement, but the agency has been hamstrung in several ways. Planning staffers must try to determine whether a host is present when a guest is staying (thus not subject to annual limits) or not present (and therefore subject to a 90-day cap). Airbnb refuses to share data about its hosts’ activities, which would greatly facilitate making this determination.

Furthermore, Airbnb does not require its hosts to prove that they have registered with the city before listing. The Planning Department will have to use its own staff and budget to try to sanction unauthorized listings, although it would be easier if hosting platforms refused to list unauthorized listings.

A secondary, yet effective tool of enforcement, the “private right of action,” became surprisingly controversial in the final moments of negotiations. Prior to Chiu’s legislation, housing nonprofits had a “right of action” to bring lawsuits against owners of buildings of four or more units when they violated short-term rental restrictions. Smalltime home sharers spoke vehemently against this in hearings, in testimony that sounded coached, even though in reality they would not have been targets of interest.

Another loophole—one especially grating to some homeowners on the west side of town—sidesteps the residential zoning process. Chiu’s legislation essentially circumvents the nearly 100-year-old zoning code by allowing a commercial business in any house any time, without neighbors having a chance to say whether or not they want rolling suitcases invading their streets. If a host wants to run a Bed and Breakfast business, it does not seem like a huge imposition to request a conditional use permit, as has been done in the past, which allows neighbors to weigh in on the proposal.

So how did we get such poor legislation?

Home sharers and Airbnb dominated the discussion of this legislation. Airbnb benefitted from, and hid behind, a parade of moving testimony from single-family home sharers who actually make up a small percentage of the listings on the site. How could anyone be against a family renting out their daughter’s bedroom every now and then while she is away at college? At the same time, these home sharers voiced vehement opposition to data sharing and the “private right of action” in their testimony. As the saying goes, “If you have nothing to hide…”

In reality, housing advocates like the Tenants Union have little interest in what Mom and Pop hosts do in single-family homes that don’t even qualify for rent control. They are more concerned about rental stock being removed by large-scale operators. Indeed, 30 percent of hosts offer more than one unit on Airbnb, and these hosts generate 46 percent of Airbnb’s revenue, according to some studies. However, these scofflaws were not the ones offering emotional testimony at hearings.

Many San Franciscans have never heard of Airbnb or VRBO and are thus unaware of the extent of the problem and how it affects their neighborhoods. True regulation and enforcement was desperately needed, but the rules were crafted by the industry that they are supposed to regulate and are a far cry from what was needed.

As a result of this legislation’s weakness, the problem is likely to continue and get worse. Already a ballot measure is being crafted by the ShareBetterSF coalition to fix the loopholes and inadequacies of Chiu’s legislation. As we debate and evaluate that ballot measure, it will be important to bear in mind the shortcomings and unfulfilled promises of current short-term rental legislation.

Jennifer Fieber is a founding member of the Anti-Eviction Mapping Project and a researcher for the San Francisco Tenants Union for the past three years.

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.
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86 COMMENTS

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  2. I got that, Greg, but I think you are making some invalid assumptions. You appear to be arguing that those 6,000 Airbnb units are taking away from the stock of vacant long-term housing.

    How can you know that? There are many typical situations where that is clearly not the case:

    1) I own a SFH with an in-law unit. I do not want anyone permanently living in my building but I like an occasional guest.

    2) I own or rent a 2-BR flat but wish to live on my own. Renting out my spare bedroom from time to time helps me pay my rent and my bills

    3) I use Airbnb only when I am away from home

    4) I do not want to deal with rent control at all, and so either Airbnb or I sell as a TIC.

    If Airbnb were banned tomorrow, I’d posit that only a small percentage of those units would return to long-term rent-controlled status.

  3. Noooo….
    Once again, let me explain this slowly. The number of airbnb and VRBO listings should be compared to the number of rental housing LISTINGS, not total rental housing stock, because the vast majority of rental housing stock is unavailable at any given time.

  4. Greg, sure, high value businesses and employees want to be here and can afford to live here. CA would be empty if nobody could afford to be here.

    But you cannot deny that businesses tend to move to locations that have fewer regulations and lower taxes (usually those two go together) if other things are equal (which they often are not).

    It’s really the same choices that we all make. If two buildings are for sale with the same rents, and one is controlled and one is not, a buyer would always choose the one that is not controlled. While a tenant would always rent a controlled unit over an uncontrolled unit, for the same rent.

    Human nature.

  5. There are several ways in which new residents in SF subsidize existing residents:

    1) They pay higher rents because the vacancy rate is kept artificially low, due to controlled tenants never vacating

    2) Impact fees for new developments are paid by buyers, often people newly arriving here. they subsidize existing residents

    3) State-wide, Prop 13 ensures that new home-owners pay more property tax

    We are set up with a mindset that those people who just happen to be here now are more important than those who aspire to be here. Even though many of those here now also came from elsewhere.

  6. A massive percentag e, Greg?

    6,800 out of 240,000 is less than 3%.

    And many of those Airbnb units are either owner-occupied units or rental units that are exempt from rent control.

  7. Greg, I think that the industrial scale nature of online aggregators is what pushes it over the edge for me.

    My one experience with home stays was around 2000, I flew to London for a long weekend when airfares were super cheap, like $360RT. There was an online website back then of two gay men who rented out a room in their flat in a large nice apartment block above the Bond Street underground station for like £45 cash. You had to search for it, it was not easy to find, and there was no wide broadcast aggregation. They were off to the countryside for the weekend on holiday so I had the whole place to myself, tiny fridge and all.

  8. The total housing stock doesn’t matter. What matters is how many airbnb units are being used out of the AVAILABLE for-rent housing stock. About a third of housing stock is owner-occupied. Of the remaining 240,000 units or so, maybe only 5%, give-or-take, is available at ANY GIVEN TIME. If, out of THAT number, a whopping 6800 units are being used as tourist hotels, that is HUGE. I didn’t realize it was that big of a number. Up till now, I was more in the “tax ’em but otherwise let ’em exist” camp. Knowing that at any given time, out of the few available rentals on the market, a massive percentage are being used as airbnb units, I’d be much more likely to support a ban or at least some severe restrictions on the number of units that can be used this way.

  9. “Greg, mortgages have to be re-financed and so mortgage payments can often go up. And of course whenever a building sells, the new mortgage is for a higher amount (and the property tax too).”

    Why would you get a mortgage that has to be refinanced? Why not just get a 30 year fixed? Surely, as a landlord yourself you know this can be done even for commercial residential properties (i.e., multi-unit apartment buildings). Don’t tell me it can’t. I know it can be done and I’ve seen it done.

    When the building sells, if it doesn’t cash flow properly with the new mortgage, then the buyer is a fool. It’s not the tenants’ job to finance risky gambles of fools.

    “In any event, there is not a direct relationship between rents and costs. If my mortgage is finally paid off, no reasonable person would expect me to lower my rents.”

    Why not? Landlords always whine about how they should be able to increase their rents with costs, so why not the other way? By “not direct relationship” what you really mean to say is that “I want my cake and eat it too. I want my tenants to pay for all my business costs but the profits are all mine.” Great business model.

    “The problem is actually the reverse i.e. cases where the costs go up dramatically, like when a building is sold, but the rents are stuck. That is what leads to Ellis/TIC or Airbnb transitions. Simple economics.”

    I have another solution. Don’t buy it. The problem is that market theories break down in a place like San Francisco, especially in a bubble economy. People get greedy and deliberately buy properties they know won’t cash flow, in the hopes that they can flip them and sell to a bigger fool. One of these days (soon) the music will stop, but in the meantime lives will be wrecked in the process. The flippers I could care less about. Let them go bankrupt. But we need stronger laws to reign them in so that they don’t wreck the community.

  10. Gary, Andy, it was a payoff pure and simple. That’s the way politics works nowadays.

    Still on the table is the question of back taxes, which has never satisfactorily been answered by the city. This could have been part of the deal between Chiu and Conway and probably involved Lee as well. Recall that the BOS majority that passed Chiu’s legislation rejected an amendment to collect $25 million in back taxes.

    Some here argue that the city should collect from property owners, but the city has no way to know who they were. It’s very likely, though, that Airbnb knows.

    In any event, the city owes us an explanation about its failure so far to collect the back taxes. It may be there are insurmountable legal and administrative obstacles. If so, we should know what they are.

    If the back taxes can’t be collected it will become apparent that David Chiu, who led the board on the Airbnb legislation, and Ed Lee, who signed it, forfeited any opportunity to collect them. We should send Chiu and Lee a bill for $25 million.

    As for the Airbnb investors who bankrolled Chiu against Campos, they did very well for their investment. You see, there is nothing in this town that money can’t buy.

  11. The restauranteurs can move. The tech companies can move. Of course they don’t, because taxes and regulations are only a small part of the reason why businesses choose to locate where they locate.

    Businesses need the right kind of workers and customers, and those people tend to congregate here. And businesses are run by rich people. Rich people can afford to live and work where they want to live and work, even in cases where it *does* mean a little less for their bottom line.

    I’ve experienced this myself. When I was starting out, I decided to start a business in the place where I could make the most money. It happened to be in the Midwest. I made a ton of money that year. But it was eating away at my soul, so I decided I’d move to the one place I felt at home, and worry about the money later. Turns out it worked out just fine.

    But hey, if they want to move, then move. Good luck finding enough bright engineers who want to staff your tech company in Texas. Good luck convincing the clientele there why they should pay 10 times more for a “farm” egg than an egg that comes from a… farm. And have fun with all the wonderful recreational and cultural opportunities available in lovely Texas.

  12. If rents were higher than people were willing to pay, then the vacancy rate would increase. So rents tend to find their natural level.

    As someone who has done short-term lets, it becomes evident quite quickly what is a realistic rent and what isn’t. It’s basic price discovery.

    That said, some hosts are asking a lot speculatively, hoping that a fool will pay it. CraigsList was always the same way. They may not need the money so much and so can afford to have a higher vacancy rate.

  13. One thing is clear. The more onerous the regulations on a particular business are, the less motivated people are to enter into or remain in that business.

    We see businesses moving to Texas because of less regulations all the time. But of course property cannot move, so landlording is stuck with regulations.

    The move to airbnb happens because of other regulations – rent control. If airbnb is regulated as strictly, then owners will simply find another use for their buildings.

    That s essentially my story. I started doing long-term rentals, then went to short-term rentals. I stopped doing Airbnb-type lets about two years ago because I saw this shit-storm coming. I won’t reveal what i do now or some bright spark at SFTU will demand it be stopped. But suffice to say there is always a way.

  14. Greg, mortgages have to be re-financed and so mortgage payments can often go up. And of course whenever a building sells, the new mortgage is for a higher amount (and the property tax too).

    In any event, there is not a direct relationship between rents and costs. If my mortgage is finally paid off, no reasonable person would expect me to lower my rents.

    The problem is actually the reverse i.e. cases where the costs go up dramatically, like when a building is sold, but the rents are stuck. That is what leads to Ellis/TIC or Airbnb transitions. Simple economics.

  15. Fortunately there is a steady stream of landlords (aka, the new slave owners) who are converting their properties to owner occupied TICs.

  16. Seriously, you have no idea that guests are able to leave personalized reviews of their experiences at specific Airbnb. Do you think hosts would allow bad experiences to continue? Or do you think hosts would quickly fix problems to better guest experiences?

  17. This article is so full of shit. Your map makes it look like more than half of the City is losing it housing stock. When in fact you look at the number of listings on Airbnb & VRBO total 6800 ( not including duplicates, so the number is likely lower, as many are listed on both) vs. 372,520 the total number of housing stock in the City http://www.bayareacensus.ca.gov/counties/SanFranciscoCounty.htm you get less than 2% of the City’s housing stock being used VRBO or Airbnb. Do the math, and find another Scapegoat!

  18. Yeah… I’m ambivalent about the whole concept of airbnb. Not every place has the kind of overheated housing market San Francisco has, so I think there’s a place for landlords and tenants to make a little extra on the side renting out their units to travelers. Particularly since hotels often take advantage of people. I definitely think they should pay their taxes if they’re making an income, and perhaps it’s inappropriate for some localities where it’s becoming a contributing factor in rising rents for locals.

    As a traveler, I find that sometimes staying in someone’s apartment makes sense. I’ve actually used Craigslist very successfully in the past, before it was overrun with spammers.

    One thing I am seeing, is that prices for apartments are going way, way up as these agencies proliferate. The doctrine of capitalism says that prices should go down with competition, right? Alas, reality often differs from the neat little curves of economics textbooks dreamed up in the ivory tower. It used to be that these options were much cheaper than hotels. Now owners seem to want comparable or even higher prices. Ummm… no. If you’re going to get greedy and charge the same as a hotel, I’ll just stay in a well-reviewed hotel or even hostel rather than taking a chance on an apartment with scant reviews.

  19. The lion’s share of a landlord’s cost is the mortgage. The bank doesn’t impose a “cost of living” increase in the mortgage, so there’s no reason to have a cost of living increase in the rent. The rent board allows for partial cost of living increase, more than enough to cover inflation for any incidentals such as repairs. Of course some landlords don’t have a mortgage at all, in which case they have nothing to complain about.

  20. It’s not about labor laws; it’s not about environmental laws; it’s about permitting in SF. If you think there are many business owners in this city, of any political orientation, who would agree that the city’s permitting is reasonably efficient – that its details have been designed primarily for the purpose of protecting the public rather than protecting other businesses, and that they otherwise don’t obstruct honest efforts – then you’re certainly high on something.

  21. I’m guessing they’re being hit hard with some huge liability lawsuits that allege Airbnb “should have known” some of its renters were sociopathic troublemakers, or worse, had it done a reasonable investigation of the customers. I generally despise the legal profession, but sometimes plaintiff attorneys can help crush business operations that are repugnant to society. Given enough time there should be enough horror stories about Airbnb customers that voters in every city will pass out-right bans on short-term rentals. All it takes is a few juicy cases followed by a ballot measure and the “yes to repeal” votes will pile up. Hopefully someone is tracking legal claims against Airbnb across the globe to find some scintillating cases to publicize to the voting public.

  22. Mike says, “The existing rent control regulations are horribly inequitable and place the burden on … new market rate tenants…”

    Rent Control places no burden on new market rate tenants. In the Bay Area there are extremely low rental vacancies, so of course rents are going to be high without adequate supply. If there was no rent control, the units would still be rented out and the new market rate tenants would still face high rents because of extremely low supply. If a new transplant didn’t understand the Bay Area housing situation before they arrived, they didn’t do their due diligence. That’s on them, not on rent controlled tenants.

    As far as your 100%/60% CPI comment, it was a political compromise. Tenants said the landlords were doing just fine with 0% rent increases since they were already making good money from their rental units. Not all tenants get wage increases each year, so why should landlords keep taking a bigger portion of a tenant’s income? Landlords of course wanted a 100% CPI increase. A compromise was made on this and other RC issues. So the 60% was the number used. That’s politics. Each side doesn’t get 100% of what they want even though the rabid advocates on either side of an issue are always demanding otherwise.

    SPUR and its many real estate supporters always harp on the 100% CPI issue since it almost sounds reasonable (without knowing the political history), but it’s just SPUR and its many city hall, developer and transportation non-profit advocates being passive-aggressive about RC housing. They’d like to see it repealed so that lower income city residents can be replaced with bright, young knowledge workers who are from affluent families that will help push out the remaining Brown and Black people. Since these “do-good” folks won’t look “cool” (or be effective in the current political environment) if they directly advocate for repealing rent control, they always bring up the 60% CPI issue as a way to rile up their base since one day they hope they have the numbers to repeal the entire law.

  23. Exactly. New business owners who complain “it’s so much work” rarely succeed. They’re like the businesses that pollute the local rivers or refuse to follow wage rules and then complain after they’re caught, “it was too hard to follow the rules.” Previous generations help build a great city and now the get-rich exploiters come along and want to skim as much profit as possible from the hard work of others, many of whom were evicted from the city so the current owners can operate their hotel business in a residential neighborhood. In Mayor Lee’s city, hubris and profit exploitation are off the charts.

  24. $3500 a month for one bedroom and you have the nerve to complain about property owners not getting a fair return on their propertis?
    ir Bnb or it’s users should at least pay the Cities Hotel tax!

  25. Boy are you wrong! Bedbugs have been found everywhere, from 5 star hotels to the Tenderloin.
    We have had them in upscale Mission Bay. Regardless of class bedbugs are widespread in SF.
    You don’t know anyone who has them? They are probably too embarrassed to tell their friends about them.
    Pest control, freezing all your stuff or gassing it, costs $350 and up, way up.-JTF

  26. @Greg, Uber is temporarily banned in Spain pending a decision from the courts. Uber chose to ignore the ban at first, but now they are complying.

    Uber and/or UberPop is also banned in France, Thailand, Singapore, Delhi, Amsterdam and many other places.

    http://techcrunch.com/2014/12/30/fiz-pop-ban/

    http://www.theverge.com/2014/12/9/7359655/uber-banned-in-spain-india-and-thailand-due-to-illegal-operations

    http://www.dailymail.co.uk/news/article-2874263/Paris-taxis-block-highway-urge-ban-Uber.html

    http://techcrunch.com/2014/12/08/uber-holland-uberpop/

  27. 4th Gen,
    Regarding the 28 units… how many people get tickets for speeding in a given day, vs how many people do it? So by your logic we should stop all speed enforcement because there are far more people doing it than getting caught?

    GarySFBCN,
    I didn’t know that about Uber in Spain. I did hear that the CEO is under indictment in South Korea for violating the nation’s taxi laws.

  28. Maybe you need to rethink your support of rent control. . Until it is repealed these problems will persist .

  29. What a thoughtful answer! And apparently we’re supposed making operating a business as painful as possible, just … because. And of course, there are never any unintended consequences to doing that.

  30. @Jennifer,

    Thank you for your detailed response. I, too, believe that we as a society can provide housing for all. I just don’t believe that we are doing so in an efficient and equitable manner. The existing rent control regulations are horribly inequitable and place the burden on both new market rate tenants and smaller, unlucky landlords rather than society at large. The AirBNB issue is just one symptom of the dysfunctional housing market in SF.

    Raising the allowable rental increase to 100% of CPI, making it easier to evict nuisance tenants (while retaining the same rental rate) AND banning short-term rentals would go a long way towards adding new rental stock.

  31. It was 28 units in one small neighborhood. They also found 400 questionable units that are being investigated in that same neighborhood. There have illegal units discovered in other neighborhoods and owners have been fined. Also note that Uber is no longer used in Spain, per court order.

    I have a home in Barcelona, so yes, I have been to Europe. Congratulations on going to Europe a “ton” of times. That must make you an expert or something.

  32. That’s definitely a new thing. And they’re not the only ones out there using this model, with legislation and taxes coming down on AirBnB other sites have crept up. Thx for the warning about what your last experience was. I might use the other sites now that this has happened. It was not like this when I used it. I liked the wild wild west aspect.

  33. “Be careful what you wish for with your ballot measure. What happens if it loses and your viewpoints are repudiated? Again.”

    What is that supposed to mean? The current Giants ballpark was on the ballot a few times before it passed.

    If an AirBnB prohibition is on the ballot and loses, nothing changes. If it it wins, it will go to court. That is our process and it is not to be feared.

  34. 28 units! Ooooh. And they wet door-to-door! Ooooh, meanwhile there are literally THOUSANDS that are not complying. I am not sure either one of you has ever been to Europe – I have tons of times. And the last few times I’ve done it by AirBnB.

  35. “In practice the rule was not being observed. ” & it says in the article 50 people were fined. No one is complying. Do you know anything about Paris? There’s a reason that most businesses there are cash only. That is so they can avoid the gov’t taxes. Same with Germany btw. People don’t comply with these draconian laws and they are impossible to enforce.

  36. “Home sharers and Airbnb dominated the discussion of this legislation” Maybe that is because a majority of people aren’t anti-Airbnb as you are? Perhaps?

    “In reality, housing advocates like the Tenants Union have little interest in what Mom and Pop hosts do in single-family homes that don’t even qualify for rent control” Yet you include them in your map, why’s that?

    “Many San Franciscans have never heard of Airbnb or VRBO and are thus unaware of the extent of the problem and how it affects their neighborhoods” Condescending much??

    Be careful what you wish for with your ballot measure. What happens if it loses and your viewpoints are repudiated? Again.

  37. OK, Thanks @GarySFBCN.

    The point I was trying to make, and obviously failed to do so, is that it isn’t considered acceptable to just make up whatever numbers you wish without providing any source.

    At this point, I realize that it is a losing cause.

    FWIW, the rest of the internet says that a lot of the money came from Reid Hoffman, a long time, pre AirBNB Chiu supporter. But that doesn’t mean that these guys are right and you are wrong., or that you need to stop making things up:

    http://valleywag.gawker.com/airbnb-investors-finance-smear-campaign-as-reward-for-f-1646655547

    http://www.sfgate.com/bayarea/article/Airbnb-backers-invest-big-on-Chiu-s-campaign-5822784.php

    #zerocredibility

  38. @Mike. I’m against the commodification of housing whether by landlord or tenant. My position is extreme to some because I think housing should be a human right denied to no one. We are a wealthy society–we can provide for all of our kin, and we should. (And no, I”m not a Communist…) The history of property rights in the US is really messed up–ask a native american about it.

    As far as evictions, I do not want to cause that myself, but still think tenants (even greedy master tenant types) have the short end of the power dynamic. If I found out the Master Tenant was overcharging me, I would absolutely take them to court. That’s between me and them and they crossed the line into landlord territory. But I would not intervene in someone else’s situation.

    I prefer to make my views known about tenants who exploit their roommates and guests–don’t be a jerk!! Act fairly!–but I’m against evictions, so no I wouldn’t cause one through procedures. I just hope people do the right thing.

    I have reached out to (via email) tenants whom I know are exploiting airbnb for personal gain. One guy bought a BMR condo and was renting it for $200 a night. That’s really messed up given the waiting lists for Affordable Housing, how can you take advantage of such a gift? So I asked him to pull his ad and gave him a little lecture. He got spooked and pulled it. I have no regrets about it.

  39. Mike, I won’t speak for Jennifer but the SFTU has a critical view of any tenant who also acts as a landlord.

    In particular the SFTU will not advise a master tenant even though they are a tenant. They will be sent away without advice.

    And they do not like the rent-gouging that some master tenants engage in, because that drives up the rent for their sub-tenants.

    So it is kinda consistent that SFTU would oppose a tenant who use Airbnb because that would make him or her, in their eyes, one of those horrible landlord people.

  40. To me, the issue is pretty simple. If you’re running a hotel business, then follow the rules and pay your damn taxes. But I just want to take a minute to recount my own experience with airbnb.

    I think we’re going to see airbnb go downhill anyway pretty soon. Here’s my experience with airbnb:
    I’ve rented out apartments in various countries, but never before with airbnb. I thought I’d give them a try on an upcoming trip abroad. First I needed to create an online profile… well, OK. It was quite a bit more detail than I wanted to give to some corporation, but I tried. Next they wanted me to scan my passport. So I pulled off the duct tape that’s been covering my webcam for security since the first day I bought the laptop, followed their directions and did it (even though by now I was feeling like a real sucker). I thought that was the end of it, but THEN they decided they want me to sign in with social media and they wanted access to my account and password!!! OK, this is too much. I don’t even use social media, but if I did, the last thing I’d want to do would be to give them my password!!!

    So I said FTS. I just want to rent a fucking apartment not apply for a top secret security clearance! Still, the apartment looked good, so I called up one of the people going with us. She works in tech, so maybe she’s more comfortable with both the technical side and with the idea of giving up every detail of her life to some strangers than I am.

    A couple hours later she texts me, “This is ridiculous. Fuck them!”

    Apparently once you get past giving them all your passwords, that’s not it! Then they tell you that you don’t use your account enough to verify you, and they ask you to CREATE A VIDEO about yourself and scan in to them!!!

    Why would anyone even want to use this company? If I were to rent my place out, why would I want to eliminate half or 3/4 of my potential customers through onerous security procedures? I googled this, and apparently this is a new thing, and many customers on both ends of the transaction are complaining.

    I must admit, though… I’m curious about the map. I’d be intrigued to see what kind of unit they’re renting out inside of Fort Point, or in on of the facilities in Golden Gate Park (perhaps the DeYoung?), or right on top of the Bay Bridge???

  41. He’s also low on facts. Barcelona fined AirBnB 30k euro, and authorities have gone door-to-door in one affected neighborhood and found 28 illegal units. The owners are being fined as well.

  42. “Actually, I think it is appalling for tenants to profit off their RC units. I agree with the landlords there, for different reasons.”

    I’m curious, but would you support evicting tenants who profit off their RC units? Either in an AirBNB or Master Tenant situation?

  43. 4th Gen: you’ve just completely contradicted yourself. First you wrote that Paris was “hands off” now you are saying they are trying to regulate short term rentals but violations continue. The fact that we have police but there still is crime doesn’t mean we should give up on having laws.

    The reason San Francisco is so attractive to visitors (and tech) today is in large part because previous generations of San Franciscans paid higher taxes, invested in public transit and parks, fought to keep diverse neighborhoods, and contained uncontrolled growth. Let’s not rip off that legacy in one generation and turn it into a big business park and fake tourist destination.

  44. It was Conway. 500k to the anti-Campos campaign the day after the BOS passed Chiu’s legislation and 250k to Chiu’s campaign a few days after that.

  45. Yeah. And we don’t need to provide a source for the $750,000 figure either. Because it sounds great.

    My guess is that it is mostly Reid Hoffman of LinkedIn who has a longstanding relationship with David Chiu that predates the existence of AirBnb.

    Also, David Chiu didn’t pass this legislation, the BOS did.

    Meanwhie, this statement is a complete fabrication:

    “Indeed, 30 percent of hosts offer more than one unit on Airbnb,”

    It isn’t directly sourced but it alludes to a study from New York. If you bother to click through it says: “Of the 7112 hosts I found, 6038 rent one room, which is 85%.”

    Correspondingly, a well known SFGate study put the number at 13.6%. For the record, this is what ‘providing a source’ looks like:

    http://www.sfgate.com/business/item/Window-into-Airbnb-s-hidden-impact-on-S-F-30110.php

    #itisfuntomakestuffup

  46. Jennifer,

    I am a member of the SFAA and my understanding is that the main reason they oppose Airbnb rentals is because the law allows tenants to do it, and that deprives their landlord of revenue that rightly should accrue to him.

    I suspect that if the law banned tenants from sub-letting, the SFAA would be neutral or in favor. Of course, individual leases almost all ban sub-letting but it’s a hassle to enforce.

    While the SFTU isn’t so concerned about tenants sub-letting but wants to stop owners adopting alternate uses of rental properties in the hope that they will then be returned to the long-term market.

    I’m not sure I follow your calculation in the case of a building advertized as having a 100K a year income from Airbnb. That same unit would have a value based on renting it out regardless of whether it is short-term or long-term. If properties generally are selling at 15 times annual rent, then I’d expect a building generating 100K a year to sell for 1.5 million. The reason it might sell for more as an Airbnb rental is that there are no sitting tenants, so it is valued more like a vacant building.

    I introduced the issue of rent control because, in my experience, a powerful reason why landlords go the short-term route is to avoid rent control, which only applies for rentals over 30 days. It’s more about having control than making a bigger profit.

    As it happens, I do have a couple of beefs with Airbnb and do not currently use them myself for short-term lets. But I am a strong believer in the sharing economy and personal freedom, so I’d prefer to see such things not be regulated. In that sense I don’t like Chiu’s law – I’d rather we had the wild west.

  47. Connect the dots though, Sam. If your neighbor is charging more than market rate for temporary guests, that means all our future housing costs go up as homes are commercialized. This affects you too. That is why the SF Apt Assoc, single family homeowners on the west side and TU are on the same side on this one….at the share better sf campaign.

    I’ve seen real estate sales ads that say: “Extra unit earned 100k on airbnb!!” That means the buyer can expect to pay 100k more than then should if it was regulated, pricing out middle class families seeking to live here.

    And really, rent control? I don’t remember starting that discussion. Actually, I think it is appalling for tenants to profit off their RC units. I agree with the landlords there, for different reasons.

    I would think there would be a lot about airbnb for even you to be critical of–you’re just not trying too hard–because you saw that I volunteer at TU and saw red. Well, that’s just silly.

  48. Anecdotal, but one of my neighbors started doing Airbnb letting about two years ago, when his last tenant moved out. He gets about $200 a night on average from his guests. Call that 6 grand a month. He reckons it would rent to a long-term tenant for 4.5K to 5K a month.

    So he’s making an extra grand or more a month assuming he has 100% occupancy. However he also has extra costs:

    1) Airbnb fee
    2) Hotel tax
    3) Costs of cleaning and preparation for each turnover.

    When you take into account those extra costs and the fact that in practice he cannot rent it out every night, then the short-term letting is no more than the regular rent, probably less, and with more work.

    But it’s hard to put a price on the ability to get your place back at any time. And of course with a controlled tenant, future rent increases will be derisory.

  49. We had a lot of problems with an AirBnB rental in our building in another city. Our neighbor rented his place out to some students who had non-stop parties for 4 days. The police came, kicked everyone out (including the AirBnB renters) and it was a legal mess for our neighbor and a filthy mess for those of us who live in the building – most of the common areas were littered with beer cans, vomit, piss, etc.

    I purchased a place in a residential building, not a hotel. I do not want strangers having the key to the building’s entrance, ringing my bell at 2am because they got the wrong flat, having clueless tourists who often do not understand the difference between renting a residential unit and being rowdy in a hotel. I don’t know why tourists think they can just toss trash on the floor in the common areas – and this happens a lot.

    If residents continue to be priced-out/pushed-out by AirBnB rentals, AirBnB needs to be banned.

    But even if residents aren’t being pushed-out, some changes are needed at AirBnB:

    1. 100% compliance with all regulations, including paying all tourist/hotel taxes in each jurisdiction, complying with insurance regulations, public access regulations, etc.

    2. An AirBnB hotline number given to all neighbors of an AirBnB rental.

    3. The unit owner’s emergency contact number given to all neighbors their AirBnB rental.

    4. A neighbor’s ranking of the rental unit’s owner. If the owner is indifferent to real inconvenience/harm caused to neighbors (determined by neighbors ranking of the owner) AirBnB deletes the rental unit, and maybe all rental units owned by the same person/entity.

    Our HOA has started the paperwork to ban tourist rentals in our building.

  50. And yet since her big splash and 400 inspecteurs & 20 staff members….AirBnB is still in Paris going as strong as it ever was. 🙂 Further, Paris has a LOT MORE things to worry about than AirBnB. Also I know someone renting out his place in Barcelona, which is an awesome destination and nothings been done. You have to understand a lot about Europe and bureacracies, big socialist talkers & wasters of tax money, then zilch. Even now Hollande’s 75% tax rate on the wealthy was just rescinded and he’s going to be tossed out for Sarkozy in the next election. Everyone in France knows this.

  51. Great work Jennifer. The Airbnb/free market cheerleaders have their facts wrong. Many major cities have noted serious problems with short term rentals AND are trying to regulate them — including PARIS, Berlin, New York, and Barcelona.

    Researchers in Paris blame short term rentals with increasing rents in the city. An aide to the Mayor of Paris said: “We can’t have entire neighborhoods or buildings turned into tourist homes, That’s why we’re fighting to keep Parisians inside Paris and we won’t let tourist rentals eat up their space.”

    http://www.bloomberg.com/news/2014-08-07/paris-airbnb-cops-want-to-know-if-you-re-rental-is-legal.html

  52. It’s amazing how even PARIS & LONDON are hands off with this but SF? Nooooo. There should not be strangling regulations on businesses, period. The sooner we vote people off the board that want to strangle businesses the better.

  53. “David Chiu, who authored the legislation, was rewarded for his efforts with a $750,000 independent expenditure on his behalf, and now heads to Sacramento while San Franciscans are left with his mess.”

    Yep. Exactly. Great piece, Jennifer.

  54. “The reality is that they are not more profitable once you take into account the extra costs, taxes, fees, hassle, turnover and risk.”
    Can you come up with ballpark numbers to support this?

    Incidentally, you can easily find on the map modern, post–rent control apartments, if you look at the right neighborhoods: places described as ‘modern’, ‘loft’, ‘luxury apartment’ etc. in South of Market, for example.

  55. Airbnb operates in 200 countries and 4000 cities. Almost none of them feel any need to insert government bureaucrats into peoples’ homes in the ways being suggested by Fieber or, for that matter, even the Chiu legislation.

    The real issue here, which Fiefer is too scared to mention, is that the rent control laws are so punitive and invasive that many landlords prefer to go short-term rather than risk being stuck with rent control royalty forever. Despite the fact that the rent on a vacant unit is very high, landlords still don’t want to go long-term.

    Now Fiefer will claim that this is just greed, and that short-term lets are more profitable. The reality is that they are not more profitable once you take into account the extra costs, taxes, fees, hassle, turnover and risk. Property owners do short-term lets not for greater profit but because no landlord in his or her right might want to risk having a sitting tenant for the next 40 years.

    Here is my assurance to Fiefer. Instead of focusing on more regulations of the type that have been failing for 35 years, why not actually talk to owners about what it would take in terms of relaxing controls to put a lot more homes on the long-term rental market?

    Stop treating those who provide vital housing services as the anti-Christ and instead recognize them for what they are – the ordinary people who take a risk and commit capital to provide two thirds of San Franciscans with a home. Not a group you should plausibly piss off if you care about the ever declining number of rentals in the city.

  56. You are so right. That’s one of the reasons I won’t *use* AirBnb – let alone rent out my place. Hotels spend a significant amount of resources to manage this type of thing; AirBnB renters not so much; and I suspect much of the clientele may not be that aware of the pest issue.

  57. The TU and “progressives,” who in reality are regressives, the others who don’t believe in the right to own and control private property are one of the major causes of the problems along with the NIMBYs. Not allowing fair market value for rental units causes housing providers, especially small property owners, to look for and find loop holes in the communist/socialist inspired Rent Control Ordinance. Rents are not even allowed cost of living increases that are equal to inflation. The costs of maintaining buildings are not controlled.

  58. “If a host wants to run a Bed and Breakfast business, it does not seem like a huge imposition to request a conditional use permit”

    Meanwhile, in reality …

    ‘”The process is very tedious; there are lots of reviews and requirements,” said a woman who has been seeking a B&B permit for two years for her Panhandle Victorian, where she hosts out-of-town visitors. “You have to hire specialized people to provide site plans and floor plans. You have to make modifications such as putting in gates for the driveway.” … If the process were easier and cheaper, “absolutely” more property owners would apply, said the woman’

    http://www.sfgate.com/realestate/article/Short-term-rentals-disrupting-SF-housing-market-3622832.php

  59. I wonder why the possible introduction of pests into one’s home is never mentioned by critics of AirBnBedbug. That tops the list of reasons why my landlord shuns the practice.

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