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UncategorizedThe Agenda, May 18-24: The Airbnb showdown begins

The Agenda, May 18-24: The Airbnb showdown begins

Plus: The future of the Ethics Commission, City College contract talks … and why I ran the Bay to Breakers

More than 5,000 illegal Airbnb units, and no enforcement -- so why does the mayor want to leave things that way?
More than 5,000 illegal Airbnb units, and no enforcement — so why does the mayor want to leave things that way?

By Tim Redmond

MAY 18, 2015 – The next chapter in the battle to save San Francisco’s housing stock from cannabilization by short-term rentals opens this afternoon, when the Board of Supervisors Land Use and Transportation Committee takes up competing bills to regulate Airbnb.

Mayor Ed Lee and Sup. Mark Farrell have a measure that would limit short-term rentals to 120 days a year and create and Office of Short-Term Rental Enforcement, which will run into exactly the same problem that the existing enforcement agencies face:

You can’t possible keep track of more than 5,000 listings from Airbnb, VRBO, and other similar platforms if the companies making the big bucks of this practice refuse to cooperate.

The City Planning Department has already made it clear that the existing law, pushed by Assemblymember David Chiu when he was a supervisor, is completely unenforceable.

The alternative bill, by Sups. David Campos, Eric Mar, and John Avalos, would force the hosting platforms to give the city the information that’s necessary to make any sort of regulations work.

That measure would limit all STRs to 60 days – and would bar companies like Airbnb from listing any unit that didn’t have a city permit. So far, fewer than 300 units have been registered as legal in San Francisco.

In effect, the bill would do what city planning staff have been begging for: It would shift the burden of proof from the city, which has nowhere near the enforcement resources, to the multi-billion-dollar platforms, which would simply have to monitor their users and share data.

What we can expect at the hearing is a preview of what’s likely to be a fall ballot campaign. The Campos bill might get six votes, but the mayor – who is very tight with Airbnb investor Ron Conway – is unlikely to sign it. In which case Share Better SF, a coalition of tenant groups, landlord groups, and labor, will put an initiative on the November ballot doing essentially what this bill would do.

Here’s how Airbnb will respond: You will see speaker after speaker talking about how “homesharing” has allowed him or her to make extra case in a brutal housing market, pay for medical expenses, pay college tuition – or for that matter, keep the house or apartment.

What you won’t hear is that much of what the “sharers” (and sharing is the wrong word, since this is a simple commercial transaction) are talking about would remain perfectly legal under the Campos bill.

Want to rent out that spare bedroom once the kid has gone to college? Fine. Want to make some extra cash renting your house while you’re on vacation or travelling for work? Fine.

It would all be perfectly legal – as long as you register with the city, and as long as you are actually renting out a spare room or the place where you really live.

And you can only do it part time.

What you can’t do is buy up a dozen buildings, evict all the tenants under the Ellis Act, and turn those units into hotel rooms. In fact, you can’t buy a vacant residential unit and make it into a hotel room. You can’t take existing rental housing stock off the market to make more money off Airbnb.

And Airbnb, which built a business model based almost entirely on people violating the law, has to tell the city how many nights your unit has been rented, so enforcement doesn’t involve some sort of complex sting operation. Oh, and if you’re not a legal STR, Airbnb can get fined up to $1,000 a night for listing it.

But Airbnb is slick, and has a sophisticated PR team, and will be testing the responses at the hearing to see what it should feature in a campaign that will no doubt involve millions of dollars.

One of the strategies might be “privacy.” Why should the City Planning Department know when you rent out a room in your house? Of course, Airbnb already knows that, and so does the City Tax Collector, and so does the IRS. And the city routinely handles confidential business data, and there have been no problems.

Watch closely: This is a clear case of corporate tech interests pushing a high-stakes agenda.

The hearing starts at 1:30pm in City Hall Room 250.

 

Budget season is starting, and although the mayor hasn’t released his proposal for Fiscal Year 2015-2016 yet, the parade of departments discussing their plans for the next year is starting. Over the next few weeks, nearly every agency head in the city will appear before the Budget and Finance Committee to outline his or her plans for the future – and financial needs.

It starts Wednesday/20 at 1pm with the PUC, the Library, the Port, and the Airport.

 

 

I have always liked Nato Green’s Examiner column, and this week’s has a wonderful guide for white people who are trying to understand riots over racist police.

Some things to think about beyond the race issues, too:

Hurting things is not the moral equivalent of hurting people. It is misleading to call both violence. Corporate personhood notwithstanding, a protest did not “turn violent” if the only violence against other humans was committed by cops. I’m not into property destruction because it’s bad tactics and undemocratic in a movement. If you have a million people ready to set cop cars on fire, by all means do so. If you have a million people wanting to protest peacefully and 20 dudes who want to set cars on fire, those dudes should stick to writing “V for Vendetta” fan fiction.

Sometimes people who endure structural oppression and cultural revilement resist by protesting and sometimes by rioting. We now finally have an answer to the question “How racist is America exactly?” America is so racist that white people have less compassion for black people rioting for justice in Baltimore than for white people rioting at Penn State in defense of a child molester. It’ll take more than the first black president to shift that boulder. It would take George W. Bush being the last white president.

 

The director of the SF Ethics Commission, John St. Croix, is stepping down. Under his reign, the agency was a laughingstock that did nothing about the reign of sleaze that had dominated local politics. That’s not all his fault – the five people he works for have shown little interest in making Ethics a real watchdog.

But the director could have done so much more – and now there’s a job opening. The process of filing his seat ought to be as open as possible, and the commissioners ought to be looking for someone with a proven track record of cracking down on electoral fraud, campaign finance violations, and violations of the sunshine laws.

I can think of so many candidates. It would be a disgrace if the Ethics Commission members can’t find one.

 

The negotiations between City College and its teachers continue, and the unions isn’t happy. One big reason: The administration, for whatever silly reason, doesn’t want “open” negotiating sessions — that it, the bosses don’t want rank-and-file teachers allowed into the bargaining room to watch what’s going on.

If the union leaders want their members to have a chance to see what’s on the table, and what the issues are, why could that possibly be a problem?

Bigger, maybe: The union wants the future of the school to be part of the discussion — that is, teachers say that City College needs a plan to restore its enrollment and rebuild after a long assault by a rogue accreditor. The administration says that’s not a contract issue.

Again, silly: If the staff wants to work with you to improve and expand an institution, why would you turn them down?

The future of the teachers’ contract depends on future enrollment. You have hundreds of people with a stake in the institution wanting to work to make things better. The cluelessness of this management crew continues to boggle me.

 

So yes, I ran the Zappos © Bay to Breakers. The shirts are so full of corporate sponsors that you wonder why you still have to kick in $60 to play. And yet … it’s still really festive.

You feel as if the whole city has come out to party – not way out in the Black Rock Desert, where you need a car, or an RV, and a big wad of money, and you still might not be allowed in if you don’t get a ticket. Bay to Breakers is the cut-rate local-go-on-the-bus version of a crazy party.

I understand some people got arrested. I understand there was probably some inappropriate urination. I understand that when you hold a big event in the city, instead of out in the desert, you have impacts on the residents.

But even in the cold, foggy morning, we had a great time. In a city where so much is so bleak so often, it’s nice to have a moment like that.

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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156 COMMENTS

  1. “What you can’t do is buy up a dozen buildings, evict all the tenants under the Ellis Act, and turn those units into hotel rooms”

    That’s not how the Ellis act works. Most homeowners in sf know that selling their property in the current market is big mistake. I really want to see the person who has the capital to convince homeowners to sell their property and lose long-term net gain. This article is just harboring progressive agenda and doesn’t even begin to address other supply side solutions.

  2. Again, I agree that scale is important. If I’m running LLing as a biz, then RC ‘losers’ are just the cost of doing business. But if I have a couple of units in the bldg I’m living in, its a whole other ballgame! Its personal in a way that those discussing this as policy never seem to get; which I think is why the phenomenon of ‘vacant units’ exists and is misunderstood.

    I can see a diff in people doing occasional ‘homeshare’ vs ppl doing ABnB – specially if its off-site or involves multi units. The magic is ‘occasional’. Even a traditional B&B is basically 24/7. If someone does a share once a month or so, no biggie; a half dozen a month and a couple of rooms/units – then we’re talking’ traffic.

    Some regs are fine. But it gets to be like taxis or MUNI and inevitably somethings gonna pop up to skirt the crustiness. AirBnB is the answer to rent control. If I had market rate units with no caps, its lot less headache to fill them long (or mid) term renters, with marginal loss of income. Meeting different people is nice though. But I’ve had some great tenants in the ‘old days’, before things got crusty.

  3. That is a great survey, thanks! It doesn’t suggest significant holdback, though there seems to have been at least one open-end response regarding ‘[f]ear of renting extra units due to potential losses.’ Neat stuff, appreciate it.

  4. Hotels would look like dwellings if there were a lick of truth to the assertion. Instead, most hotels spend a great deal of money looking quite different to dwellings, because there is great difference between dwelling and travel.

  5. Yes, my experience agrees with that i.e. that rent control motivates over half of all landlords.

    Some landlords are not effected so much. Either because they have so many units that the law of large numbers bails them out. Or because they got lucky and had above average turnover or less “loser-lifers” than normal.

    For the majority, it is a major factor that informs the low level of supply in SF. Why run a business where profits are artificially capped?

  6. Anyone who claims ethical precedence in a field like ethics which is entirely subjective is, of course, self-serving and very arrogant.

  7. The issue here is not so much what the “industry” thinks but rather what ordinary people think

  8. Instead of googling fictional surveys you might talk to some of the decision makers about their motivations?

    Just a thought

  9. “We don’t pay taxes. Only the little people pay taxes.”

    –Leona Helmsley, Hotelier

  10. Quite so. Is there some randomized survey of landlords fielded by career civil servants out there?

  11. I’ve been told by those in the know, that the Ethics Commission is a parking ground for unemployed & failed Pols

  12. “Ridiculous” rent increases (I assume by that you mean increases to market, because higher increases than that are not allowed even for non-controlled units) can only be used to encourage tenants to move in uncontrolled units.

    and the problems we are discussing don’t apply to non-controlled units anyway, since rents can be increased to market. It is controlled units where the alleged problem exists

  13. SF is really the downtown of the Bay Area. But it contains most of the sights that tourists will want to see. So in practice tourists stay all over the city.

    Moreover there is little net difference in terms of traffic between one person staying 365 nights in SF and 365 people staying one night

  14. If you do not talk to landlords then you can have no informed opinion about how rent control causes different outcomes.

    It is legitimate to critique methodology

  15. There is no evidence that other sharing sites are complying with SF’s requests for data on guests.

    My point about Iran was to indicate the limits to extra-territorial laws.

  16. There was no criticism there of you personally. The criticism is of your methodological approach and how its limitations miss key factors.

  17. When it comes to short-term rentals taking vacant rental units off the market, progressives believe supply matters. But when it comes to building new rental housing to increase the rental housing supply, some progressives see adding additional rental units as a negative.”

    No – there’s the rent control factor. Most units taken off are RC units (short-term let margins aren’t THAT great) if you can increase long term rates anytime you want. And, new rentals are uncontrolled (i.e., not under the control of the progressives).

    And besides, new rentals – unless they’re “affordable” (under the control of the progressives) are anathema.

  18. That’s not the main reason hotels should be regulated: short-term guests generate traffic and behavior that is out of place in substantially all residential neighborhoods.

  19. You are arguing big-vs-small (Hilton vs home-share). I’m saying that Homeshare is just like a B&B (hence the moniker ‘AirBnB’). It is REALLY difficult to start a B&B in the City. Zoning, regs, variances, you name it. And in fact the VBRO of even 5 yrs ago simply wasn’t worth the work/hassle for the compensation.

    These days the rewards are more compensatory (rates are higher). And ease of doing biz is better – ABnB-style. Doing it outside the law is one way ($275k??), but there should be a better (legal) way to do it. I’m not a big fan of regul., but it can be helpful for customers, suppliers, and the community.

    I liked that I could book a ABnB when all the hotels were already full. And I’d prefer a ‘local flavor’ as opposed to a ‘chain’ experience anyway. But I don’t quite get that a “homeshare” is somehow not business (yet having a friend/family stay wouldn’t be ‘biz’).

  20. I don’t. But evicting people via ridiculous rent increases with the motive of converting the business to short-term rentals is – and should be – regulated.

  21. More second person, more ad hominem. There are more things on heaven and earth, Horatio, than ad hominem attacks.

  22. San Francisco already extracted concession from Airbnb. Other sharing services take those regs seriously enough to sue over them. The evidence indicates enforcement is not a problem.

    What does Iran have to do with Airbnb?

  23. Any use of the second person is a hallmark of ad hominem argument. Here there is overuse, with three uses of ‘you’ in a spare three-sentence comment.

    To talk is to take a survey of a small, biased set of respondents. Using small, biased surveys to underpin analysis is a recipe for failure, ‘Dewey Defeats Truman’ write large.

  24. Communist government used to reward neighbors who ratted each other out for ideological impurity. Progressives live that idea.

  25. Right, that’s ad hominem.

    The ‘contention made’ is that the supply curve for housing is steep, and that market dynamics fit the predictions of a simple supply/demand analysis in the presence of steep supply curves.

    Is the counter that the supply curve for housing is not steep, and what data support the idea? If that is not the counter, what is it?

  26. Right friggin on @chris12bb:disqus . It’s about time that someone had the cohones to talk about what we really need to do.

    Progressives like Tim Redmond have a long history of pushing private companies to turn over information on the activity of their customers to the government. It is a basic tenet of the San Francisco Progressive movement.

    We need to start right now to get the ISPs (not just the individual companies) to turn over that online data. Email too. Suppose someone is emailing an international relative about coming here without documentation? The law is the law.

    Campos? Avalos? Kim? We need just one Progressive hero.

  27. “But I don’t for a moment believe that in San Francisco rents/home prices will go down because of more housing.”

    Well, okay. But then you shouldn’t expect rents/home prices to go down from strong Airbnb restrictions either.

  28. Who follows regulations and who do not is a complex subject based on many factors.

    but obviously the universe of people or entities that follow laws is elss than the universe that it is intended to apply to,

    People are capable of making informed independent decisions about the risk-reward of any act or omission

  29. I’ll take that as an admission that you do not declare and pay it annually

    But don’t feel bad. Nobody does,

  30. Explain exactly how Tehran would stop you posting on-line ad’s that target customers in Iran. Be very specific about the steps they would take.

  31. Do capsule hotels not follow hotel regulations? Does the Mt. Kenya Safari Club cheat the state of fees?

  32. Calling you out when you introduce race into a topic that has nothing to do with race is a reasonable response. You do it a lot. It’s a habit.

  33. The purpose of building homes is not to drive down home values. Existing homeowners would never support that.

    The purpose of building homes is because people want them and need them

  34. Nothing personal in there. I was simply describing the limits of your capabilities and how that informs some misjudgements

  35. Oh god, I forgot. Mentioning race stimulates your Pavlovian auto-response about losing a debate.

  36. The same way San Francisco would: by promulgating regulations, insisting Airbnb follow them, sanctioning Airbnb if it did not comply and enforcing its sanctions if necessary.

  37. You inadvertently bring up a good point. Why do people obey laws? There are only 4 reasons I can think of:

    1) You blindly follow every law regardless. That is almost nobody

    2) You agree with the law. That’s fine but the law is them irrelevant. you are simply doing what you want

    3) The probability of getting caught is so high, and the punishment so severe, that you decide it isn’t worth it. Typically that is only the case for serious felonies.

    4) You don’t like the law but respect the law-makers

    None of them apply here

  38. More housing is needed, that is clear. But I don’t for a moment believe that in San Francisco rents/home prices will go down because of more housing.

    I spoke with some RE people yesterday. The buzz is that we are headed into another RE correction within two years. I don’t know if this will actually happen, but I’d really like to see the data that makes these analysts believe that.

  39. ..ad hominem arguments are the last refuge of people who have the sneaking, nervous-making suspicion that they are about to lose an argument on the merits.

  40. Where we differ is that I don’t think that is a matter for Airbnb. It is a matter for the giests in that locality

    There are many SF guests who do this who don’t use Airbnb

  41. Luckily for those of us who jaywalk, we know the difference even if you do not. Luck has nothing to do with it.

    Do you offer to pay CA sales tax on your out-of-state purchases?

  42. They are all hotels if you choose to define them that way so you can maximize the tax you can try and squeeze out of them.

    Most people see the distinction, which is why we have different words for the two

  43. Unlike you, I’m not motivated by selfish, pecuniary objectives. I care about people, San Francisco, sensible and robust urban planning, and how the deck is stacked against the poor, middle class and people of color.

  44. They will be fine. They just have to figure out a mechanism to pay the proper taxes (like a hotel group) and in cities with tight housing supply they need to figure out how to co-exist with local ordinances. But people will want an accounting. No one (even the people) were happy with the failure to pay back-taxes.

    As for moving to an Omaha to avoid SF, AirBnB still needs to retain talent. They won’t move in the near future.

  45. If Airbnb offers stays in Tehran to people from SF, how could Tehran stop that? (Other than by going after the guests in Iran?)

    If an Iranian version of Airbnb offers stays in SF to people from Iran, how could SF stop that? (Other than by going after the guests in SF?)

  46. It isn’t, nor is a capsule hotel in Tokyo or the Mt. Kenya Safari Club.

    All four offer short-term accommodations for money.

    All four are hotels.

  47. Again, wcw, get up from your armchair, engage the real world, and take a walk around the Hilton hotel downtown and ask me if that is similar to my spare bedroom?

  48. I never wrote that my rent is determined by rent control.

    Existing regulations for businesses are appropriate for all businesses regardless of the technology used to initiate the customer/business operator-owner relationship.

  49. No, the question is whether Iran can successfully prevent you from offering SF services via the internet to someone who lives in Tehran?

  50. Sure, but that’s a terrible analogy. The question is whether Iran can regulate behavior in Tehran.

  51. Many owners do not withhold supply only because their units are occupied by tenants who wont leave. So you are examining and considering only a very small proportion of controlled units – those that happen to become vacant.

    An interesting survey question to owners would be this: If your controlled units all became vacant tomorrow, what percentage of them would you re-rent long-term?

    That would capture the real extent of the potential reduction in supply. And not just potential because, in the next 25 years probably 50% or more of those units will become vacant.

    So the short-term effect may be small. The cumulative effect over a couple of decades is another matter. Even as things are, we are losing between 1% and 2% of our controlled units each year to permanent long-term rentals. It adds up.

  52. Randy Shaw makes the kind of point that many of us have been trying to make all along. Perhaps you’ll take it better from his mouth.

    http://www.beyondchron.org/sf-progressives-become-housing-supply-siders/?utm_content=bufferc0e81&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

    “Some San Francisco progressives seem to hold diametrically opposed positions on the value of increasing the rental housing supply … When it comes to short-term rentals taking vacant rental units off the market, progressives believe supply matters. But when it comes to building new rental housing to increase the rental housing supply, some progressives see adding additional rental units as a negative.”

    You can’t say that more housing supply is a bad thing in one case and then say it will help in the other.

  53. What distinguishes a hotel guest from a personal guest, if not compensation?

    What distinguishes a hotel from a home, if not offering short-term accomodations for compensation?

  54. Airbnb will be just fine because almost everyone loves them. The fact that a few left-wing extremists in SF have a problem with them is irrelevant. If I ran Airbnb I’d move them out of the city to avoid some of these tasteless ideological attacks, but anything as popular as Airbnb will be fine – the people always prevail.

  55. Price controls do not materially affect supply where supply curves are steep. The supply curve for housing is steep.

    If the assertion is that the supply curve for housing is not steep, then that assertion is testable. What market dynamics would prevail if the supply curve for residential units were moderately sloped?

  56. Don’t worry about that RichLL, the end game is an IPO and AirBnB is not going the way of a Caribbean poker hosting site no matter how much you argue they are similar.

  57. It matters if thousands of people are not persuaded because, as we have seen, then there is close to zero compliance and the entire regulation becomes moot. You are supposed to pay sales tax on out-of-state purchases as well, but almost nobody does.

    Nobody has been banned from this site as far as I know. I fully comply with Tim’s request that we only use one account name at a time

  58. It doesn’t matter whether you are “personally persuaded”. I’m sure you could argue you weren’t “personally persuaded” that slavery is bad. So what? You are renting out short term living space for profit which is what a hotel tax is for. Regardless of whether your place more like a motel 6, a Hilton or a B&B, you are profiting from a short term tenant. (and why aren’t you using your SolAlex moniker Sam, did it get banned as well?).

  59. They changed the site a while back to give much less information. You can still find out whether property taxes have been paid on a property, but the name and address of the owner is now suppressed, presumably for privacy reasons

  60. People do see them as different, however. Partly it is a matter of scale – me occasionally having a paying guest in my spare bedroom is nothing like running a 1,000-room hotel 24/7.

    It’s also a very informal and friendly – you get to meet people from all over the world and, often, get invited to stay with them overseas. In that sense it feels more like home-swap and time-share businesses, which have been around for decades and which nobody seems to have a problem with.

    The fact that it is on-line doesn’t affect the host or guest much, except that it is convenient. It does affect the platform though, as there is no longer any physical presence or entity which can be legislated or taxed remotely.

    Personally I think the taxation and regulatory issues are a matter between the city and the guests, since only the guests are physically within the jurisdiction of the city. And only the guests get to vote on city policy

  61. A home-share may not be a Hilton, but it is – how different from? – a BnB.

    The fact that the ‘sharing economy’ is individuated and run online instead of out of a Yellow Pages does not that big a distinction make.

  62. Even if Airbnb does hand over their users private data, it will not solve for other sites, so I think San Francisco should ask ISPs for all residence internet usage. That way they can see if people are listing on multiple short term rental sites.
    While they are checking they can also see if we are downloading illegal movies, buying drugs and other activities Campos deems Un San Franciscan.
    Also this legislation encourages neighbors to grass on one another which is a particularly good idea. I think this should be expanded so we have a line to call for any minor infractions to laws, but of course only laws that are un San Franciscan per Campos’s world view.
    May be San Francisco should employ some of these “good” neighbors so they are rewarded for informing on who is behaving as a good San Franciscan citizen, and who are not conforming. Then we can classes to educate the “bad” neighbors on good citizenship.

  63. Ok, well, I’m having a hard time finding my own (or neighbors) addresses. It used to be upfront and simple.

  64. You have previously admitted to living in a rent controlled apartment in SF.

    Existing regulations do not seem appropriate to the sharing economy, which is why those regulations are widely ignored and not enforced.

  65. So you agree that safe jaywalking is not a problem.

    And that the real problem is risky behavior.

  66. My rent isn’t set by rent control and my apartment isn’t crappy.

    My crowing achievement – if I have one – has nothing to do with where I live.

    If you are being paid by those with whom you share your home, you are operating a business and subject to regulation.

  67. Owner names are still on the recorded documents, and you can still search by name on criis, then get the address from the APN.

  68. A woman distantly acquainted was from New Mexico. She so often had trouble using her NM identification outside her home state when people thought it was foreign ID that she got into the habit of shouting at the hapless and dim, ‘Fifty states! Fifty!’

    Two crayons, Sam. Two.

  69. Yes, but you used to be able to pull up owner name & address, as well as search props by owner. Not any more. Gotta make a fun run to CH for that.

  70. Jaywalking is victimless until the inevitable collision.

    Unregulated hotels harm nobody, until they do.

  71. Shit on the street is a health hazard.

    Me safely jaywalking harms nobody.

    Me having a paying guest in my home harms nobody.

  72. Many local dog owners think those pesky ‘No Dogs’ signs apply to every dog except their own special snowflake.

    The inevitable result is dog shit on public spaces: a perfect metaphor for this line of thinking.

  73. It is possible in some cases where enough diplomatic pressure and leverage is applied by a sovereign state with a lot of power.

    How successful do you think Iran would be at compelling you to obey their laws?

  74. Wait, what? The poker settlement demonstrated that jurisdictions can and do enforce regulation beyond borders.

    Pretend history may comfort those whose world view facts threaten, but make-believe is an awful way to make policy.

  75. Rent control deters supply.

    If you do not believe me, get out of your armchair and talk to some owners. Google won’t tell you everything you need to know.

  76. Right: sitting tenants affect prices at which the market clears by continuing to demand their units at below market price.

    In order to draw supply and demand curves, use both crayons.

  77. It affects how people perceive the reasonableness of any attempt at regulation or taxation.

    It is quite common for small businesses to be exempted from legislation that targets big businesses

  78. Using any road dangerously is a problem.

    Me jaywalking when it is 100% safe and there is no risk or danger is not.

    Context matters. Rote and technicalities do not

  79. ‘[A] place that has rooms in which people can stay’ covers Airbnb, Tokyo capsule hotels, the Mount Kenya Safari Club and the Hilton. That not one of these resembles the other does not mean they are not all hotels, each and every one.

    Why would the similarity of the Hilton to Airbnb be an issue?

  80. It is supply and demand at the margin that drives price. Sitting tenants only affect that by not moving.

    A small change in supply and demand can make a big difference if the vacancy rate is low, as it is in SF.

    Those who support rent control should not ignore the fact that it deters property owners from choosing to offer a controlled unit for long-term rent again. Airbnb is but one of many options for an owner deterred by rent control. The effect of banning Airbnb would not make much difference.

  81. The success of enforcement typically depends on we the people being willing to spend actual money enforcing it.

    We are willing to spend a lot of enforcing some things. I don’t see the voters wanting to spend millions on spying on who stays in a private home.

    But there are always things you cannot enforce e.g. the behavior of people beyond your jurisdiction.

  82. Demand for housing supply includes all existing tenants.

    Supply of housing includes all units not held off the market.

  83. What does that matter? That enforcement is not perfect has never been an argument that enforcement doesn’t work.

  84. Jaywalking is not victimless. The inevitable pedestrian collisions traumatize drivers and witnesses, death or protracted recovery from serious injury affect family and friends, costs are borne by an already overwhelmed healthcare system and decreased respect for traffic regulations makes for a less pleasant, more dangerous environment on the road.

    https://www.youtube.com/watch?v=qWGEPZlbtX4

  85. On-line poker is still illegal in the US and still operates here illegally.

    The fact that one class of players participated in a settlement did not eradicate anything. And that was the full might and power of the federal government – and not some mid-sized city

    If you were sat next to me now, I could show you illegal on-line poker games going on right now.

  86. There are probably about 150,000 rent-controlled homes in SF. Probably between 1% and 2% of them vanish each year for a variety of reasons. But in many other cases the owner will behave differently because of rent control.

    If rent control had no effect on owners there would be no point in having it. But if you really want to learn about the 101 different ways LL’s deal with rent control, you are going to get out of your armchair and talk to some.

    You cannot learn everything using Google. Sometimes you have to engage the real world.

    Demand is a different thing. There is probably infinite demand for rentals at a cheap rent. But the vacancies are all at market rent so the effect of rent control on new demand is limited

  87. Online poker is exactly the enforcement model that demonstrates how US jurisdictions enforce collection of taxes from European sites. They settled, payed a billion dollars in fines and forfeitures, and now comply with US laws.

    Cognitive dissonance is a powerful thing, I guess.

  88. Hotels are a superset. Airbnb is a hotel; the set of all hotels includes more than is dreamt of in Airbnb’s philosophy.

  89. Right: Airbnb and rent-control supply effects are de minimis.

    Rent control absolutely motivates conversion from controlled to noncontrolled status. Conversion is not deterrence, and is substantially more significant than same. Conversion, of course, removes zero units from the housing stock. Demolition removes units, but demos are so few as to be invisible.

    Rent control’s only significant effect is on demand.

  90. That is one definition and there may be some overlap with home-sharing.

    But most people understand the difference between the Hilton and a flat.

  91. The definition of hotel is:

    a place that has rooms in which people can stay especially when they are traveling : a place that provides food, lodging, and other services for paying guests

    That exactly describes an Airbnb room.

  92. Like I said, less than 1% of SF homes are advertized on Airbnb, and many of those are genuine shares rather than full-time businesses.

    So the numbers are small and Tim is massively exaggerating the problem.

    That said, rent control deters long-term rentals, and we see that not just in short-term lets, but also in Ellis and OMI evictions, TIC formations, condo conversions and other alternate uses.

    Price controls deter supply.

  93. Right: the more new building, the more organic ‘other’ vacant. A realistic guess is that owner reluctance to let affects at most half of those 0.9%, and 0.4% and below is not a significant effect.

    Price controls do not materially affect supply where supply curves are steep. The supply curve for housing is steep. Even two-crayon economists understand that.

  94. I have jaywalked (safely) every day of my life, often right in front of cops. No ticket.

    The only place I know that enforces it is Berkeley, and it’s just a revenue exercize for them.

    Everyone breaks laws. I’d be upset if you broke the law against murder, rape or some other serious crime. If you redo your kitchen without a DBI permit, I couldn’t care less.

  95. FACTA relies on the co-operation of foreign entities. Some will co-operate; some will not.

    Short of sending in US troops, all extra-territorial laws rely on voluntary co-operation

    And those on-line poker sites are still operating.

  96. Jaywalking is and should be a moving violation. Jaywalking tickets do and should count as points on a driver’s license, and insurers rightly are allowed to consider these in setting rates.

    Every idiot wandering through traffic against lights checking a smartphone is living reminder that these are good laws.

  97. The compensation is irrelevant. The presence of an individual in my home is a private matter.

    What you are seeing in SF right now is thousands of people wilfully sharing their homes in defiance of a law that they see as unjust and invasive.

    Tim has often supported civil disobedience in the past, and favors non-complaince with various laws about illegal immigration, illegal drug use, prostitution, sit-lie, public nudity, holding up traffic to make a political point and many others.

    I am surprised you would visit a site like this if you hate civil disobedience and the fight against injustice

  98. The existence of laws such as FATCA continues to remind anyone with any experience at cross-border regulation that this line of argument is uninformed, at best.

  99. Usually this is true, though there are exceptions even there.

    Once an owner or tenant accepts compensation for accommodation, the transaction turns his visitor into a hotel guest, and regulating hotels is city business.

  100. Relative vacancy rates depend on other factors as well e.g. zoning and availability of new build.

    It is quite obvious that a policy designed to reduce the profits of a particular business will have the effect on those running such a business. You don’t need a study to realize that. You just need to think about it for a minute.

    Price controls inflate demand and deflate supply.

  101. Nor are hotel guest registers a matter of public record. Hotels must, however, comply with city regulation.

    Regulation of hotels is uncontroversial. Why should that change if individuals are allowed to access that market?

  102. No biased survey of individuals known to a single person will ever be useful. Try a professional survey, like the Census’s.

    A simple comparison might be San Francisco to San Mateo counties. San Francisco’s ‘other vacant’ proportion is around 0.9% greater than San Mateo’s. Landlord reluctance to rent can account for at most 100% of this difference.

  103. But guests who visit or stay in my home are not available publicly or even privately, and should not be.

  104. To produce data you would have to perform some kind of study and survey. Have you done that?

    My information is based on the many landlords I know and talk with. There is a clear reluctance on the part of many to deal with rent control and that inevitably leads to less controlled units being offered for long-term rent.

  105. Yes, SOME say, but not TOTAL say.

    If my building is a residence and I choose to allow a guest to reside in it, then that is not the city’s business

  106. To argue that ‘unwillingness [to rent long-term] is a direct result of rent control’ it is necessary to demonstrate that some fraction of units held off the rental market would not be vacant in its absence. How do these data show that?

  107. I do not think the government should restrict your freedom to have whomever you want in your home

  108. Exactly. So it appears as if, via zoning. The City does have SOME say in what you can or cannot do in your home.

  109. I think it does matter. Almost everyone breaks some kind of rule, law or regulation every day. And the reasons we all do that is significantly based on how appropriate and reasonable we think that law is.

    So for instance I jaywalk every day because I think it is a dumb law. Technically I could get a ticket but, in practice, it isn’t enforced because very few people agree that enforcing such a law makes any sense

  110. “It’s my home. You’ve no right to tell me what I can or can’t do with it!”

    Stick to your guns or don’t.

  111. Again that is different because the purpose of your home is to house people and not to run chemical plants.

    So having people reside in your home is a normal use of a home. Making chemicals in it is not.

  112. Depends on zoning. There are dwelling units in areas that are zoned for commercial and industrial use. It seems plausible, if not likely, that some units could support a legal supply business.

  113. True, Jon, and in fact it is ONLY Airbnb that is collecting local taxes. No other platform is.

    There are also European sites that will arrange short-term stays in SF and the city clearly has no way to enforce collection of taxes from them

  114. Not that it matters, since regulation does not depend on personal opinion, but even a dimwitted child knows the difference between a guest and a stranger who pays for accommodations.

  115. The restrictions on Airbnb are mostly in a few cities with a liberal city government. That leaves thousands of cities Airbnb could move their HQ to, including unincorporated areas and overseas nations. I do not believe that any city can strong-arm a corporation that is located elsewhere – that city would have to go after the hosts, and that would be much less popular with its voters.

    Again, many locations do not have a hotel tax, and I have never personally been persuaded that such a tax should apply to home shares

  116. Really? I’m thinking of opening a chemical supply company in my apartment. Do you think anyone would mind?

  117. And yet I never see you seeking zero tolerance towards people, say, smoking pot in their homes, or entertaining a hooker, or doing business with an illegal immigrant.

    The laws you care about appear to be highly selective

  118. I do not believe that the people sharing their homes have been convinced that they are running hotels

  119. That may be. But those have nothing to do with the city trying to dictate what you can or cannot do in your home

  120. Depends what you mean by “significant”.

    Tim is complaining about, at most, a couple of thousands units being used short-term. Personally I would agree with you that is “insignificant” – it’s less than 1% of homes in SF.

    But if we accept for a moment Tim’s claim that that number is “significant” then the real issue isn’t Airbnb at all, but rather that those 2,000 or so owners do not want to rent long-term.

    And that unwillingness is a direct result of rent control.

    But your disagreement is with Tim’s categorization of significance, and not with the fact that rent control does drive the motivations and actions of property owners

  121. “relocating from SF just to escape these petty attempts at intrusions”

    Yes, but … SF is not alone in requesting/requiring additional info from these companies. I think Port OR has a stricter policy; and probably a few other places. And ABnB seems fine with that. And I’m not sure requring a Regis # before listing isn’t a valid point too (assuming that registration is not the PITA it is already).

    Of course, there are various levels of privacy. You used to be able to get prop tax records with owner info online from the CCSF. Try to do that today. So maybe allowing third parties & neigbhors to see all that you’re doing doesn’t mesh with the way the City does business otherwise.

    Which leads me to my third Q: if only 300 units are “registered”, are those the only ones paying the TOT? Or is the City getting somewhere close to the actual 6000 Us TOT; just not having all the paper work in order?

  122. KH, I was not suggesting that Airbnb refuse to promote home-sharing in SF. They are free to operate wherever they choose.

    The suggestion was that the city is trying to take advantage of the fact that Airbnb HQ is physically and geographically located in SF in order to subject them to special pressures.

    If Airbnb was located elsewhere, even overseas if necessary, then the city would be powerless to threaten them. The city would instead have to co-operate with Airbnb, rather than bully them.

    Online businesses really do not need a physical presence anywhere which is why they are so hard to regulate except on a global basis. On-line poker has been illegal for years in the US, for instance, but carries on operating with impunity overseas.

    I fear all the city may achieve here is driving Airbnb beyond its jurisdiction and sphere of influence.

  123. um…@GarySFBCN…you might want to consider giving up the ‘not paying taxes’ thing.

    The city’s tax commissioner is perfectly happy with the $1 million a month that Airbnb collects on their host’s behalf and remits to the city; plus they paid the city a lot more in back taxes than they earned. And they did it a few weeks after the city gave them a dollar figure to pay.

    Meanwhile, somebody can go through craigslist and the city won’t lift a finger to collect any taxes.

  124. That depends; Most HOA’s in condo buildings don’t allow short term rentals and a “no subletting” clause is pretty standard in most residential leases – security and liability are very much real concerns for people involved, so yes, it’s possible that it is my business who you share your home with.

  125. It is every San Franciscan’s “business” if you are breaking the laws, including not paying taxes. It is every San Franciscan’s “business” how you run your business.

  126. So let me make sure that I understand this one…if a company is successful then it should give the government private information about its customers without a fight.

    And registering with the city might not impede their success if the city had an efficient registration system which they do not. Right now they would ask Airbnb to give up most of its San Francisco listings while those people would simply move to other platforms once they realize what a PITA the city’s registration system is.

  127. I really enjoy Tim’s rationalization of John St. Croix’ management failures. Presuming for a moment that St. Croix was not a compliant tool of the Mayor’s office, what is a manager to do when their staff refuses to do their job? In Tim’s world, nothing, absolutely nothing. When there is a Charter provision to point to that clearly enumerates the task of the executive director, and an individual collects a salary in a position of responsibility to implement those provisions, that is all that matters. In Tim’s world, plausible intent is sufficient, outcomes are purely irrelevant. This is what it is like in a world without accountability.

  128. SF is a prime short term rental market. Airbnb is making millions of dollars from transactions that take place in this City. We are a great market place for them. The idea that act like toddlers and simply take their ball away from the game when asked to play by the rules seems a) a bit simplistic and b) not the type of business community we want to build. What kind of role model is it for our society when wealthy and successful businesses do not seek to play by the rules and do not set an example of civic citizenship. The people who own Airbnb have become wealthy and have a successful business. Registering with the city will not impede their success and will be helpful to the community at large and to the city. We need to ask our successful and wealthy corporate entities to be active participants, to be generous, and to be law-abiding.

  129. Yes, I think Tim is conflating “sharing” with “charity” In his mind, if you’re not giving something away for free then it’s not sharing.

    The reality is that most sharing is a give and take. I do something for you and you do something for me. Generosity is typically reciprocal.

    I can foresee Airbnb relocating from SF just to escape these petty attempts at intrusions of privacy and invasions of choice.

  130. It’s not hard to figure out the difference between some visiting French academic on a short-term assignment and someone like you whose crowning achievement in life is clinging to a crappy rent controlled apartment for decades.

    There has been a long history in this nation of civil disobedience against unjust laws, invasions of privacy and government overreach. I am proud to be a part of that fight.

    It’s none of your business who I choose to share my home with.

  131. Why should anyone have to obey laws? Remember that when your temp-rental tenants refuse to move out. Like every nutcase libertarian, you claim ‘infringement’ until you need help from the government.

  132. Re: “Of course, Airbnb already knows that, and so does the City Tax Collector,”

    Then why doesn’t the city just get the information from its own tax department? Because the city considers that to be a breach of a citizen’s privacy? So we want Airbnb to breach the privacy of private citizens for us?

    And outsourcing enforcement of a city law obviously won’t work; there are just so many ways for someone to cheat without Airbnb ever knowing about it. Too many to even begin to list here.

    Also: “and sharing is the wrong word, since this is a simple commercial transaction”

    Interesting.

    That isn’t the case in the English language. Merriam Webster list the following synonyms for the verb “share” : split, divide, go halves on;
    informal: go fifty-fifty on, go Dutch on”we share the bills”

    A commercial transaction is not mutually exclusive with a share. If I say that I am sharing office space with another company it doesn’t mean that the other company doesn’t compensate me. If two people agree to share a sandwich for lunch it doesn’t mean that only one will pay for it. In real estate there have been “time shares” for a long time now. Ride sharing is another example.

  133. Re: Bay to Breakers and Tim’s question: “The shirts are so full of corporate sponsors that you wonder why you still have to kick in $60 to play.”

    Answer: B2B raises money for the United Way of the Bay Area, National Kidney Foundation and others.

    I read stuff written by real journalists also.

  134. Tim, you didn’t explain here what you can never explain. If I own a housing unit and do not want to rent it out long-term because of rent control, then even if you shut down Airbnb totally, I am still not going to rent it out long-term.

    I will find one of various other productive and profitable uses for that unit instead. In fact I have already moved on from using Airbnb and other locally-based hosting platforms because they are potentially too exposed to political interference.

    Owners will always be several steps ahead of whatever invasive laws you try and pass. Because in the end, you might be able to drive Airbnb out of town. But you can never force me to rent out a unit long-term if I simply do not want to.

    Why instead don’t you investigate how rent control drives up rents by deterring property owners from offering rentals? What they instead do with those units is a forlorn cause for you because you can never control that.

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