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News + PoliticsPoll says voters support Airbnb regs -- but Airbnb...

Poll says voters support Airbnb regs — but Airbnb says there’s nothing wrong

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)

Landlords (Charlie Goss from the Apartment Association) and tenants (Jennifer Fieber from the SF Tenants Union) were united, for once, in favor of regulating Airbnb
Landlords (Charlie Goss from the Apartment Association) and tenants (Jennifer Fieber from the SF Tenants Union) were united, for once, in favor of regulating Airbnb

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.

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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31 COMMENTS

  1. Which is why there should be reporting reqs for hosts as well.

    With Craig’s List, if you find and flag an ad for an illegal activity, chances are they’ll take it down.

    Why doesn’t Airbnb remove unregistered units, instead of aiding and abetting illegal activity? Because that’s where they make their money, not off of poor souls renting spare rooms.

  2. But again, SF can apply pressure to Airbnb to provide that data mostly because Airbnb is located in the city

    How would SF enforce such disclosures from a site physically located outside of its jurisdiction and with no presence or asset in the city?

    So the reality is that this will put a local service at a competitive disadvantage to their rivals. And you have no solution for the “ad model” like with CraigsList, for instance

    Moreover many guests place ads looking for places and in those cases there is no record of the hosts who contact them. Only the host and the guest know.

  3. In concept, I’m not against AirBnB and similar efforts. But they need to be good citizens to city/state governments, they need 800 numbers for neighbors of their rentals to call and complain (we had a huge issue with a rental – several neighbors called the police and the ‘vacationers’ were evicted by the police), they need to comply with laws and regulations, etc.

  4. It’s not punitive at all. Airbnb isn’t the only site that books reservations. Some — like VRBO — simply carry ads and people book directly with the hosts. But for the many that operate like Airbnb, they’re all held to the same reporting standards. it’s not punitive at all and it’s not easy on the others.

  5. But how do you even know who the hosts are? That’s the point.

    And if I use foreign sites, you have no good way of getting that information.

    This is punitive on Airbnb and easy on the others

  6. Interesting article. What do you think was meant by “illegal sublets” in NYC? Short term? Unknowingly subletting from the original tenant/owner?

    I’d be curious to know what percentage of whole apts being let out (STL) are controlled vs uncontrolled. IOW, to what extend RC is a motivator.

    The risks are not insubstantial either way (STL vs LT-non-controlled; RC-rentals are magnitudes more risky)

    I personally know of a bldg around the corner that is … no, its NOT a condo – just a Vict duplex. Guess they prefer ABnB to RCrenters. I know another odd situation where two units are actually one legal condo; the owner could rent LT but prefers STLs primarily to meet new people.

    Personally, I think ABnB is vastly overvalued. When things finally settle down and the ‘sharing economy’ finally owns up to its responsibilities, it may be marginally better than traditional industries (taxis, hotels), but only marginally, if at all. Specially when traditional industries adopt more modern techniques.

  7. And if rent control covered all units, do you not think the only effect of that would be even LESS homes offered for rents?

    I own SFH’s, condo’s and live-work lofts. All are exempt from rent control. All are rented out. Impose rent control on them and NONE of them will ever be rented out again.

    Be careful for what you wish for.

  8. dude, try a google search. there are dozens and dozens of local websites renting units to tourists. they all have the same data on rental nights.

  9. Airbnb already did that when they insisted that enforcement be a ‘complaint-driven’ process.

  10. Yes, the problem is rent control. It doesn’t cover all rental units, including businesses, as it should.

  11. Bombshell! We shouldn’t believe AirBnB. We need to subpoena their data:

    “From the start, this regulatory process was as crooked as Lombard Street. But this Airbnb acrimony is wholly unlike the outcry in New York state, where officials readily slap back bad actors.

    New York Attorney General Eric Schneiderman subpoenaed Airbnb for user data, and found two thirds of the more than 19,000 Airbnb users in New York City were illegal sublets.

    The New York investigation also revealed why Airbnb seems so keen to protect users who abuse its platform.

    The top five New York Airbnb hosts by number of listings rented out 80, 35, 31, 29 and 28, units on Airbnb, the attorney general’s office found. Almost half of Airbnb’s $1.45 million in 2010 revenue in New York City came not from grandmas renting out spare rooms, but Airbnb entrepreneurs who had more than three listings on the site.

    Airbnb declined to provide us numbers, but it stands to reason it has similarly large amounts of money to lose in San Francisco should The City decide to crack down.”

    More here:

    http://www.sfexaminer.com/sanfrancisco/on-guard-airbnb-regulatory-process-rigged-from-the-start/Content?oid=2932672

  12. Some of the comments generated here – clearly divisive, patronizing and many just cruel – have sparked this citizens turning against each other and neighborhood wars and resentment; take some responsibility

  13. OK, got it. So we need to have Airbnb, the only local company, turn over it’s data, otherwise we can’t enforce the law. We have a separate policy for its competitors.

    The judge is going to love that one.

  14. Yes, let’s turn citizens against each other. Great idea.

    You really a spiteful and vindictive person

  15. The can city pay a $1,000 reward to San Franciscans who report units that are illegal vacation rentals. City fines the owners $5,000 the 1st time and increments $5,000 for each subsequent time the unit is rented. Then they can put a lien on the property in 1 year if not paid, and ultimately force the sale or better yet, confiscate the property for BMR housing.

    Between plugging the hole in the in AirBnB and other local companies and going after property owners who are illegally renting their units, we can solve most of the problem and make a ton of money for the city. Win-win.

  16. I get it…forcing Airbnb to turn over data won’t really do anything to deter people from going over the limit; savvy landlords will know that they have to spread their advertising around. If you plug the biggest hole in a bucket water will still leak out through the 20 smaller holes.

    But we don’t care. The objective here isn’t to control short term rentals, it is to use governmental power to screw the one company that Ron Conway invested in.

    Just like with the TOT tax. Progerssives were in an uproar about Airbnb’s TOT taxes. Then Airbnb paid up and the issue went away. Nobody cares about all of the other coompanies. No Ron Conway.

    And you wonder why people feel that Progressives can’t govern. Duh.

  17. Why would you want to disadvantage a local business that employs local people, over a competitor from out of town or overseas, which the city cannot pressure in the same way?

  18. The real issue is much simpler. I would agree that all these units that are not owners’ homes are units that are removed from the long-term permanent rental market. And maybe you think that is a problem.

    But I near guarantee you that very few, if any, of these units would become affordable rentals if Airbnb were suddenly made illegal. Some might find their way back onto the long-term market at current market rents (say 5K a month for a 2-BR). But most will be used in some other way e.g. short-term corporate lets or TIC.

    Why? Because most of these owners doing Airbnb have decided they no longer want to deal with rent control. And banning Airbnb will simply push owners to find other uses rather than long-term rental.

    The real problem isn’t Airbnb. That is just a convenient scapegpat for you. The real problem is that rent control deters the supply of rental units. And you have no plan to fix that problem.

  19. Last year, AirBnB was fined €30,000 for illegal tourist rentals in Barcelona, where many residents were displaced by AirBnB rentals. And now, the newly elected mayor (2 weeks ago) wants to curb AirBnB rentals.

  20. Just because we can cure all cancers at once doesn’t mean we shouldn’t continue to battle individual cancers. And AirBnB is the biggest of the group.

  21. >”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.”

    That’s awesome!!!! Thanks for figuring that out, Tim. Works perfectly.

    Except maybe for the part about rooms being rented out via craigslist, VRBO, Homeaway, TripAdvisor, Travelmob, OneFineStay, Guesthouse, …

    …aw heck…just Google “short term vacation rental san francisco” to see the rest yourself.

    And that says nothing about advertisements on local sites in places like London or Shanghai.

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