How we beat Airbnb

The news media have missed the real story of how a community coalition organized, ran campaigns, educated, and eventually forced the giant corporation to quit posting illegal listings

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.

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

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!

14 COMMENTS

  1. I can’t wait to see all the rent magically drop now. There will be no more blame game on airbnb. (hint – they won’t….it was a false claim by the hotel lobby / tenants unions).

  2. Not a mention of the benefits of Airbnb to tourists and hosts alike–cultural interaction, investment in local businesses, reduced cost of accommodation in many cases thereby encouraging longer stays , the convenience of staying near friends and family in parts of the city where there are few if any hotels. Many people who host Airbnb guests in their primary residences have no desire for full time roommates, and are therefore, not taking housing off the market.

  3. Yes, and sometimes, between me and the tourists. I have no issue yelling at people when they misbehave. Of course, it ruins their vacation but that’s not my problem.

  4. That’s because there are still loopholes that need to be closed (see article). NYC — especially the boroughs — have had a myriad of issues since they enacted stricter legislation in 2016.

    You can spin it and make silly analogies if you want, but Airbnb is an integral part of SF’s elite gentrification — their business practices greatly decreases the supply of long term SF rental units.

    How do you decide which avatar you are going to use on a given day? You just wake up and see how you feel? Can we expect to see Zhoosh upvote comments by Playland anytime soon?

  5. Here’s a thought: Many of us who purchased apartments in residential buildings don’t want to live next door to a business that allows strangers to have the keys to the building. What’s worse is that a good percentage of these tourists make a lot of noise, litter the common areas, scuff the walls and elevator with their luggage and are a nuisance.

    This is 100% independent of a housing crisis.

  6. Oh geeze. I support all regulations on AirBnB and good for SF for FINALLY getting something in place. But Welch is full of shit when he writes: “The curious thing about this extraordinary fact — no other city in the
    world has reduced Airbnb listings at all. . .”

    Consider doing some research before writing ridiculous nonsense like that.

    Berlin and Barcelona have been especially aggressive and other cities as well. In Barcelona, there is a unit of maybe 10-15 city employees who check on listing in AirBnb and others to see if they are legal tourist units. If they are, they fine the owners about $30k. They have fined Airbnb too and since July last year, AirBnB agreed to remove any unit that isn’t a registered tourist unit. Hundreds, maybe thousands have been removed. And Barcelona isn’t approving any new tourist unit permits. Also this investigative unit found that several people were renting multiple units, each time saying that they were going to live in the units and signing that they would not sublease or do vacation rentals, and yet they immediately put them up on AirBnB. If I tranlated correctly, one man who had several illegal units listed on AirBnB was a Vice President of AirBnB for Latin America.

    Berlin implemented at total ban of entire apartments on AirBnB, but that was challenged in court by AirBnB and AirBnB won a partial victory. I believe the ruling still limits the renting of entire apartments but loosens the number of days that rooms in home can be rented out in a year.

    Other cities have limited or are working to limit AirBnB rentals.

    While I’m happy that we got this law in place in SF, shame on San Francisco for allowing this to persist for several years.

    Now if we can get strict ride-share regulations, life would be better.

  7. I don’t think it will have a significant effect on Airbnb. A lot of the people who hadn’t registered hadn’t done so because it was such a cumbersome process. There are 1,000 pending registrations at city hall.

    Meanwhile there were less than 300 full units being rented for more than 90 nights a year, according to the city’s own numbers. So I don’t think that Airbnb is responsible for the homeless situation.

    Lastly, you can’t put toothpaste back in the tube. People like Airbnb and it makes their San Francisco experience travel better, and often longer. You stay in a neighborhood and feed the kids food from the local supermarket.

  8. Well written and informative piece. I was not aware of the loophole. These newly enacted laws have multi-billion dollar implications.

    The big question for Airbnb is when they will go public. SF’s and NYC’s tightened regulations on them set the precedent for what cities can accomplish. This is going to negatively affect their market valuation.

    Airbnb is currently monitoring Spotify’s move to go public without an IPO, and how it compares to a tech company like Snap Inc.’s, who’s 2017 IPO was the second largest ever for a tech company. Facebook is the largest.

    But Facebook is no longer the VC cream dream, Amazon is. Airbnb has it’s eye on the prize.

  9. Whereas you would be perfectly happy with AirBnB having a monopoly. But then the Hotel Association has followed the rules, where AirBnB pretended they did not exist.

  10. It wasn’t easy and we were not the first city to fight Airbnb, but, after years of struggle, our city officials finally agreed on a program to protect residents. A steady increase in homeless living on the sidewalks outside their former homes has brought the issue to a head in all the districts.

    No one wants to see more tents or desperate people on the streets. Dealing with illegal short term rentals is not going to solve all the problems that are driving people out of their homes, but, it is a good start. Now we can move onto other ways to keep people housed. This subject will be front and center in the race for Mayor. Which candidates will share some fresh ideas on how to keep people housed? Hopefully the media will have time to cover this in the depth it deserves.