Company’s new study says Airbnb has no impact on housing costs (but it also admits that 20 percent of its hosts are violating the existing law)
By Tim Redmond
JUNE 9, 2015 – On the eve of a major policy vote on short-term rentals, supporters of tighter regulations released a poll showing that two-thirds of San Francisco residents agree with the basic elements of legislation by Sup. David Campos.
The poll by Goodwin-Simon Strategic Research shows that 66 percent of San Franciscans think Airbnb should be fined for posting unregistered units and that 63 percent would support a ballot measure that’s in the works for November.
The Board of Supervisors will vote today on two competing measures, one by Campos that would limit short-term rentals to 60 days a year – and equally important, put the onus on Airbnb to make sure that all of the places its lists are legally registered and aren’t violating the law – and a measure by the mayor and Sup. Mark Farrell that would limit STRs to 120 days but impose no further requirements.
The central issue in all of this is enforcement: Everyone agrees that entire rental units shouldn’t be taken off the market and turned into full-time hotel rooms. But the mayor and Farrell seem to think that the law can be enforced without any information from the hosting platforms, and that somehow the Planning Department will magically find a way to track which of the more than 5,000 housing units listed at any one time on STR platforms are legal.
The Campos bill asks for simple information: Every quarter, Airbnb would have to tell the city, in a confidential filing similar to a tax report, how many days each place was rented. That way the city could check and be sure that the limit – whether it’s 60 days of 120 days – was followed.
Everyone agrees that short-term rental units should be registered with the city, but the mayor seems to think that a new enforcement agency he wants to set up will be able to find and abate the thousands of units that are listed but not registered. Campos wants to do the much more simple thing of telling Airbnb and other similar platforms that they have to make sure the units are registered, and have a valid city license, before they go on the website.
And just as Campos and his allies – including both tenants and landlords – held a press conference announcing the poll, Airbnb put out its own new study, arguing that short-term rentals aren’t driving up rents or making the housing crisis worse.
The study, authored by two Airbnb researchers and an Airbnb public-relations person, states that 80 percent of the hosts on the site “share only the home in which they live.”
That alone is a remarkable statement, since under existing law, and both the mayor’s proposals and the Campos proposals, it is and would be illegal to rent out anything except the “home in which [you] live.”
Which means that 20 percent of the listings on Airbnb right now are illegal – by anyone’s standards. The company itself admits that it is promoting thousands of listings that violate the city’s laws.
The study focuses on whether there’s an economic incentive to evict tenants and replace them with short-term rentals, and concludes that in most parts of town, a landlord would have to rent his or her (or its, if the landlord is a corporation) apartments for more than 200 days a year to make the same money as he/she/it would bring in by renting to a long-term tenant.
And since surveys (Airbnb surveys) show that most hosts don’t rent more than 90 days a year, there’s no way that STRs are impacting the housing stock.
(Wow. When I was an economics major in college, we used to call that a hand-waving proof: You wave your hands around a lot and say “QED!”)
And why is Airbnb, which is willing to use its internal date for its own studies, unwilling to share with the city?
Dale Carlson, one of the leaders in the Share Better SF initiative campaign, notes, “They drew these numbers from a survey of their hosts – how many hosts who aren’t renting their own homes do you think replied?”
Campos told me that Airbnb so far hasn’t been willing to share its internal data with the city. “The data used in the Budget and Legislative Analysts report is public and you can review it,” he said. “Until Airbnb shares its data, then we are just relying on their word.”
I contacted Christopher Nulty, the PR person who co-authored the study, to discuss this, but he hasn’t called or emailed me.
And, of course, whatever the Airbnb folks say, we know that there are landlords evicting tenants and turning the places into hotel rooms.
One reason: If you Ellis Act a building, or get a condo-conversion permit, get rid of long-term rent-controlled tenants, and then immediately re-rent it to new tenants, you can get in a lot of trouble.
But these days, if you get rid of your tenants – who come with that pesky rent-control thing – and turn the place into a hotel, you can get often get away with it. The city’s enforcement has been weak or nonexistent – in part because Airbnb won’t share the necessary data.
It may be that a landlord would have to rent a unit out for the short term 200-plus nights a year to compete with the income from a traditional long-term rental. But housing prices are going crazy in this city, and a long-term rental comes with rent control.
So that 200 nights a year might drop to 150 next year, depending on demand. And your long-term tenant will pay the same rent this year, next year, and into the future.
In other words, there’s a huge incentive for landlords to cheat, to turn existing rental apartments into short-term hotel rooms.
And, of course, even for people who own their homes or rent out rooms in their primary residence, there’s an impact. Not that long ago, a large percentage of San Franciscans, particularly young people and new arrivals, lived in shared housing with roommates. (Real shared housing – they shared the rent, often the cost of food and utilities.)
Now, homeowners and people with leases on flats are more likely to see that there’s fast cash by using those rooms for tourist hotels.
We will hear much about the competing studies at the board meeting. But I don’t understand why Airbnb is so against a law that says: You, and every other rental platform, have to follow the rules, and help the city make sure that your hosts aren’t cheating.
Unless, of course, Airbnb knows that its business model, which has turned it into to multibillion-dollar company, only works if people are allowed to break the law.