San Francisco has set another first in the annals of the tech economy: a 50% reduction in the number of Airbnb listings for the City and County. The curious thing about this extraordinary fact — no other city in the world has reduced Airbnb listings at all, let alone by a whopping 50% — is that the center-left labor community coalition that is responsible for it received no mention at all in the media coverage of the astounding reduction in short term rentals. Indeed, the media seems to imply that Airbnb itself, or perhaps the city attorney, is responsible for this dramatic turnaround.
That is not quite how it happened — and given the victory that has been achieved, it is important that people understand what took place so that we might apply the lessons to future battles, even future battles we need to fight against Airbnb.
The responsible party is a coalition called ShareBetter San Francisco. It is a classic “only in San Francisco” coalition with its core membership made up of usual opposites: the San Francisco Tenants Union, which represents tenants, and the Apartment Association which represents landlords; Local 2, which represents hotel workers, and the Hotel Association, which represents hotel management.
But it gets even broader: The Coalition of San Francisco Neighborhoods, Senior Action Network, the Council of Community Housing Organizations, the Housing Rights Committee and the Haight-Ashbury Neighborhood Council. These were the folks that drafted Proposition F, an initiative petition on the November, 2015 ballot that sought to control short term rentals, dominated by Airbnb in San Francisco.
At its core, Prop. F sought to force accountability on the web-based “hosting platforms”—particularly Airbnb — that started the web-based and wildly mis-named “home sharing” portion of the “sharing economy.” That accountability was required in Part Four of the proposed ordinance, which held the platform liable for a fine of $1,000 a day for listing any un-registered address (see Voter Info Pamphlet 2015 ) in San Francisco. This requirement was featured in all of the Yes on F campaign lit.
While the coalition expanded during the campaign to include the Building Trades Council, the Sierra Club, San Francisco Tomorrow, the Labor Council, Jobs With Justice, the Anti-Displacement Coalition, San Francisco Rising, SF Women’s Political Committee, West of Twin Peaks Council, the Latino Democratic Club, and the Community Tenants Association, Prop. F lost at the ballot being massively outspent by Airbnb. It is interesting that no Yimby group supported Prop. F which shows their key linkage to big tech money and their ideological aversion to regulation of the housing market.
In a subsequent study done by the Public Press a year later it was found that Airbnb paid for some 47.4 hours of No on F TV ads on all five commercial stations that then ran only 3.5 hours of news coverage on the entire election (see Corporate Cash Dominates 2015 Election).
Losing a ballot measure rarely stops a land-use fight in San Francisco and ShareBetterSF was not through. In a series of post-election meetings, core members agreed to submit as separate ordinances those parts of Prop F that they knew, from their campaigning, were popular with San Franciscans and effective policy. With the victory of Aaron Peskin in D5, in large part due to the issue of STRs in the district, the majority of the board favored controls on STRs. In addition, Prop. F did very well in key districts that would have supervisor elections in November of 2016. And two supervisors, Jane Kim and Scott Wiener, were going head-to-head for a State Senate seat and the thinking was that Wiener, a strong supporter of Airbnb, did not want to hand Kim an issue and could be “boxed” in on voting for controls.
In January, 2016 core coalition members decided to request allies on the Board of Supervisors to draft a standalone ordinance that would include the objectives of Part Four of Prop. F. Supervisor David Campos agreed to sponsor the legislation and in March the first draft was prepared. In the end, ShareBetter SF analysis was correct and the measure passed unanimously (with Farrell requesting to be excused for a conflict that he did not have when he voted for two pro- Airbnb measures in 2015 and 2016). Sups. London Breed, Malia Cohen, Katy Tang and Wiener — all of whom had opposed Prop F – voted for it.
With 10 votes the measure was veto proof and Lee let it go into effect without his signature.
Two weeks later Airbnb filed suit in Federal Court saying it could not be held accountable for the illegal actions (failing to register in San Francisco) of folks using it.
In October, 2016, ShareBetterSF submitted its second piece of legislation aimed at making the law enforceable. The original legislation of 2014, drafted by then-Sup. David Chiu with Airbnb’s full participation, included a huge loophole that made the ordinance impossible to enforce. The Chiu ordinance created a distinction between “hosted” and “unhosted” rentals. A “hosted” rental was defined as occurring with the primary resident of the unit present during the rental and could be done at a minimum of 275 days a year. An “unhosted” rental was defined as a rental in which the “host” was gone and would be limited to 75 days a year. Chiu (and Airbnb) boasted that the new law would “limit” STRs to “75 days a year” without ever mentioning the “hosted” loophole.
The simple fact is that the city has no way of determining when a host is “present” in the unit. It depends upon the host self-reporting their presence or absence. Moreover, other than having a streaming cam or a GPS implant, there is no way to prove when someone is present in a unit — rendering the 75 day “cap” un-enforceable and allowing, in effect, unlimited STRs, a fact Chiu to this day has yet to acknowledge.
Breed, facing a fight for her life election in District Five from Dean Preston, saw her way clear to introduce a 60 day “single-cap” legislation in October, 2016. It also included a “private right of action” allowance for long standing tenant and affordable housing non-profits to sue if the city failed to act on complaints.
This was a stunning reversal for Breed, who had voted against an amendment that would have required 60 days in 2014. But she refused to waive the 30-day waiting period for new legislation (even though a version of this legislation had been debated in 2014) ensuring that the matter would not be voted on before the November election. This decision by Breed meant that her ally, Wiener, a strong supporter of Airbnb, would not have to vote twice against it in one year.
Sure enough, on November 29, the Board voted 7-3 with Wiener, Tang and Cohen voting no to pass the 60-day single cap. And sure enough, ten days later Ed Lee vetoed the measure since it did not receive the veto proof eight votes that it might have received if Breed waived the 30-day rule and had the vote before the November election.
While City Attorney Herrera and his able litigators defended the City and reached a settlement with Airbnb that allowed the ordinance to take effect, Airbnb did not purge 50% of its listing because it was a law abiding player. It did so because it did not want to lose in Federal Court and set a precedent for other jurisdictions. A settlement agreement only binds the parties in litigation and cannot be used in other proceedings.
But the facts of the matter, that fully half of the apartments listed by Airbnb were purged because they simply could not meet the regulation requirements, should be sobering as the registration requirements are absolute minimum requirements: you must simply prove that the unit listed is your primary residence — and half of those listed on Airbnb could not meet that requirement!
Recently the Office of Short Term Rentals reported that application rejections are currently running at 38% of applications. The money is so good that relying on people to self-police or self-report in reference to the “hosted” or “un-hosted” loophole is simply silly. The city needs to pass the 60-day single limit and remove the temptation to cheat. Hopefully Breed will not veto the measure that she introduced last October, but it’s been a long and winding road and predictions are perilous.
In any event, ShareBetterSF continues to meet and act. Watch this space!