According to San Francisco Administrative Code Chapter 41A, it is “unlawful for any owner to offer an apartment unit for rent for tourist or transient use,” defined as “occupancy for less than a 30-day term of tenancy.”

Any interested party may institute proceedings for injunctive and monetary relief for violation of this Chapter. In addition, the owner may be liable for civil penalties of not more than $1,000 per day for the period of the unlawful rental. If the interested party is the prevailing party, such party shall be entitled to the costs of enforcing this Chapter, including reasonable attorneys’ fees, pursuant to an order of the Court. If the interested party is a permanent resident, then the interested party shall retain the entire monetary award.

And in terms of Criminal Penalties:

Any owner who rents an apartment unit for tourist or transient use as defined by this Chapter shall be guilty of a misdemeanor. Any person convicted of a misdemeanor hereunder shall be punishable by a fine of not more than $1,000 or by imprisonment in the County Jail for a period of not more than six months, or by both. Each apartment unit rented for tourist or transient use shall constitute a separate offense.

An apartment is defined as a “room or rooms in any building, or portion thereof, which is designed, built, rented, leased, let or hired out to be occupied…provided that the apartment unit was occupied by a permanent resident on or after February 8, 1981.”

And according to the Administrative Code, “It is presumed that an apartment unit was occupied by a permanent resident on or after February 8, 1981, and the owner has the burden of proof to show that an apartment unit is not subject to this Chapter.”

This afternoon San Francisco’s Land Use and Economic Development Committee will review an amendment to Chapter 41 sponsored by Supervisor Chiu which would “extend the restrictions against converting apartment units to short-term occupancies to tenants or guests of corporate entities that rent such apartments” and allow civil actions to be brought by certain non-profit entities.

With respect to being offered for tourist or transient use, there are currently 1,938 rooms, homes or apartments in San Francisco listed on airbnb alone.

Proposed San Francisco Administrative Code Chapter 41 Amendment [sfbos.org]

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Comments from “Plugged-In” Readers

  1. Posted by Pablo

    Wonderful. Why should building owners get to decide what they do with their assets?
    Don’t people realize that private property is a public good?
    Oh wait…

  2. Posted by johnny

    yes. http://www.airbnb.com
    a disruptive technology …
    airbnb (david) v. sf tax authorities (goliath)
    I bet the vast population is on david’s side and that is typically how legislation originates

  3. Posted by anon

    yeah, gee, why would anyone care about using residential apartments as tourist hotels? Heck, all zoning rules should be repealed. Property rights roolz!

  4. Posted by lol

    The same David Chiu who interfered with an Ellis eviction 3 years ago with the Jasper Place. He wanted to forbid owners who evicted tenants from building garages. His goal in life is to punish landlords. He is following his master’s (larger) footsteps. It’s a good thing he is not being always followed.

  5. Posted by Fishchum

    Sorry, but I’m siding with Goliath on this one. Property zoning is there for a reason – I’d be pissed as hell if I bought a condo only to have my next door neighbor turn his unit into a hotel suite with god knows how many people coming and going at all hours of the night.

  6. Posted by tipster

    Wait until your building is fighting the same bedbugs every hotel in the city watches for and then agressively fights, because your next door neighbor decided to rent to 1000 different people every three years.

  7. Posted by lol

    Fishchum,
    You have the right to complain against your neighbor and use your HOA to do that.
    airbnb works so well in SF BECAUSE of property right limits imposed of the city. It is not the source of the problem, more like an unfortunate consequence of well-wishing regulation. You fix a short term problem by regulating against landlords. Now they’re whining no landlord wants to rent anything on the open market!
    Some nerve.

  8. Posted by anon

    being a hitman is so lucrative simply BECAUSE of those pesky laws prohibiting murder, more like an unfortunate consequence of well-wishing regulation.

  9. Posted by shza

    Airbnb is *already* illegal and civilly-actionable under the current law. This isn’t some new “Goliath” regulation — the proposed amendment is belt-and-suspenders at most, in terms of substantive law.
    The grant of standing to third-party non-profits and likely uptick in enforcement is the news here.

  10. Posted by lol

    Comparing going around rental rules with murder. That’s a stretch by any measure…
    In any case, I have 2 rentals out of town but in a place with similar rent control. One of them is rented to family, the other is corporate (more than one month). No way I will put them on the open market. No soup for you. Play whack a mole all you wish, we’ll find a way around.

  11. Posted by eddy

    Who exactly is going to be filing these complaints? Are the police going to setup a task force?
    [Editor’s Note: As noted above, “Any interested party may institute proceedings for injunctive and monetary relief for violation of this Chapter.” An Interested Party currently means a resident in an affected building, or the City of San Francisco. As proposed, any non-profit “which has the preservation or improvement of housing as a stated purpose in its articles of incorporation or bylaws” would become an Interested Party as well.]

  12. Posted by shza

    Eddy, on the civil side, the proposal is to grant standing to “certain non-profit entities.”. Those entities, I would assume, will be funded by the hotel industry.

  13. Posted by The Milkshake of Despair

    Servas members are probably safe from this law because it is a nonprofit. Can you imagine the havoc that would occur if the city were to bully Servas?
    Couchsurfing on the other hand might be exposed since there’s a centralized cash exchange.

  14. Posted by neighbor

    Interesting this came out this morning as I introduced myself to an older couple coming out of the apartment next to me over the weekend – they used airbnb for the visit –
    A thought came up different than the topic above –
    Is it safe that all types of people have access to your building – I know you have references via facebook etc but who is to say 4 months later someone steals a bike from your garage – how can that be tracked when so many people had access to keys?
    Will landlords add clauses to their lease not allowing 1 night lease?

  15. Posted by ricker

    the existing legislation has been in place for a long time, and is only being tweaked — as noted above. far more interesting data/information would be how many actual fines/penalties have been handed down over a period of years. my limited understanding is there is virtually no investigative/enforcement mechanism in place, and therefore actual penalties are minimal.

  16. Posted by EH

    So, couldn’t someone create a “non-profit” that the airbnb space is rented to on a monthly basis, which then places people into the room or apartment willy-nilly? That is, the “corporate rental” model in use all across this fine city of ours?

  17. Posted by shewolfe

    How is VRBO exempt from this? That model has been around for a while and seems to work. Is is just because airbnb does mostly one nighters?
    Please enlighten me.

  18. Posted by eddy

    This will most likely have minimal impact. Mostly FUD that hasn’t stopped this business to date. Considering how quickly the city rolled over for Twitter, I find it hard to believe that the SF is suddenly going to start pushing too hard on SF Based Airbnb. These guys should be getting government funding as I’m sure there are more than a handful of ‘owners’ who are subsidizing their ability to stay afloat via these businesses. There are LOTS of things that are on the books that are not enforced.

  19. Posted by Eric Baird

    VRBO with its subscription model has flown under the radar. Airbnb has done a great job in marketing this concept and bringing it to the masses.

  20. Posted by Guest

    “VRBO with its subscription model has flown under the radar. Airbnb has done a great job in marketing this concept and bringing it to the masses. ”
    Airbnb uses an algorithm which moves all of its individual listings to Craigslist (with AirBnB member approval) to the Vacation Rentals, Rooms, Sublets and other category. Its marketing is essentially on the heels of CL, infiltrating in — and undermining CL — a local company –in the process.
    “Great Job” in marketing?

  21. Posted by Joshua

    So,
    Ron Conway backs Ed Lee for mayor (only after it’s obvious Lee will win) and raises a bunch of money for him.
    Now David Chiu goes after a Conway-backed company.
    Wow, this is really subtle.

  22. Posted by Brahma (incensed renter)

    eddy, I believe the legal term of art is “private right of action”. The idea in this case being that when the municipal authorities can’t or won’t take action (I think ricker’s right that there is little investigative and enforcement mechanism in place), the people who are aggrieved, such as the next door neighbors who get mites or bedbugs because you have been leasing out your apartment to thousands of people over the course of three years (to use tipster’s example), can bring a suit against the owners.
    I agree with you that this “will most likely have minimal impact”, but not for the reasons you do. Airnb is a menace and deserves to have their business model regulated. The problem is that civil litigation is expensive as hell.
    Again taking up Tipster’s example, let’s say you get bedbugs and you even notice it right away and call the exterminator right away. You still have to prove that it came from the unit that was being leased via Airnb and not the unit on the other side of you by owner/occupiers. I haven’t done any case research on this, but that seems difficult and expensive to prove. Even if it wasn’t, you’re going to spend a good five figures in legal costs just in discovery. So few people are going to be in a position to use this statute in the less tony parts of town.
    The largest group of people attempting to use this, assuming it becomes law, are going to be people in high-end condos and co-ops, who have the financial wherewithal to cough up a hefty five-figure sum to punish the absentee landlord doing the informal vacation rental. And those people are exactly the people who won’t ever need to do so, because the HOA or co-op board will take care of that for them, or simply not allow it in the first place and have the ability to enforce that policy.
    Not every start-up has a worthwhile idea, even if it is “disruptive” and they find a way to make money, and Airnb will turn out to be a good B school case study in this regard.

  23. Posted by johnny

    Not a single member of the human race can contemplate ALL of the consequences to an action, including politicians.
    politicians are voted in on popularity,yet have the authority to legislate, yet even the most popular person/politician cannot necessarily know more than the least popular person/”ordinary citizen”.
    too often in America’s history Individuals “in power” (i.e. politicians) originate and pass laws that they are “convinced” will solve one problem or another and that they have fully considered ALL of the potential outcomes of enacting a “law”, but 100% of the time, the law has “unintended” consequences.
    so, open your mind, imagine genuine property rights where the owner had the right to manage her property, including leasing it for one day or one year or one decade. what would happen, most likely, is a flood of lower prices and a natural equilibrium.
    I predict http://www.airbnb.com will survive quite well. It is a great idea w/ample room for improvement and provides a great service and freedom to a large section of any population. And if it doesn’t survive in America, it will survive on some other place on the planet where freedom and property rights truly mean something.

  24. Posted by cc

    Maybe someone can enlighten further, but I believe the main difference between VRBO and airbnb is that with VRBO you are renting out an entire rental property, or at least, a portion of a property designated as rental facilities.
    For instance, my friend owns a house, but the first floor has a studio with full bath and separate entry. This space is registered with the city as rental space and he pays hotel tax on the income. With airbnb it seems you are renting a room or couch that is part of the owner’s living space and the income is not reported.

  25. Posted by geekgrrl

    FYI, according to the code referenced, the penalties only potentially apply to vacation rentals in apartment buildings with 4 or more units (see SEC. 41A.4 Definitions).
    It does not mention rentals of rooms in a house which exempts many AirBnB listings in addition to all short-term/vacation rentals in 2 or 3-unit buildings.
    [Editor’s Note: That’s not correct, see our comment below.]

  26. Posted by redseca2

    How do these operators know if it is the property owner or just a renter who is making the offering?

  27. Posted by kddid

    You guys have missed the point – Chiu’s legislation is complete giveaway to the SF Tenants Union. The original ordinance is similar to the Federal Clean Water Act and other laws which give citizens power to enforce regulations when the government cannot or will not. Without this change, only the government or individual citizens could enforce the ordinance. This proposal specifically allows for non-profits to be the enforcer, and provides them financial incentives to do so. It now allows any “non-profit organization…which has the preservation or improvement of housing in its stated purpose” to bring all kinds of suits under the ordinance. If they win, they not only get compensation for their legal costs, but GET TO KEEP THE CIVIL PENALTIES OF $1000 per day!! The only problem will be dividing up the spoils between the SFTU, TNDC, Senior Action Network and others. This will be a huge revenue generator for them, so you can sure they will be scouring AirBnB, VRBO, and Craigslist to find the “perpetrators” and bring them to justice.

  28. Posted by geekgrrl

    @redseca2 – that’s a good question, I don’t think they do know. I imagine many renters are in violation of their lease by renting/subletting their apartments on AirBnB.
    The only property owners I know of, personally, who operate short-term vacation rentals own 2-3 unit buildings and pay the 14% hotel tax on income generated so this ordinance wouldn’t apply to them.
    I do have a friend who lives in a rent-controlled flat who rents rooms to tourists on occasion but he is always home so he can maintain that they are short-term guests.

  29. Posted by Brahma (incensed renter)

    imagine…where the owner had the right to…leas[e] it for one day…what would happen, most likely, is a flood of lower prices and a natural equilibrium.

    Elided to emphasize the economic argument.
    This is an interesting hypothesis. In the real world, isn’t it actually more expensive to pay for a hotel/motel room for one day than it is on a per-day basis to lease an equivalent apartment for a month? Why wouldn’t landlords, being rational small-business-owning maximizers of revenue, who are currently renting marginal apartments on a monthly basis migrate those apartments en masse to Airnb, counting on the fact that the higher per-day rents would more than make up for the increased vacancy rates, if applicable? If that happened, all other things being equal, wouldn’t supply on the non informal vacation rental market be reduced as those units became unavailable and thus force higher prices for people living in San Francisco?
    Or maybe you meant that a lower equilibrium price would be established on the market for units available via Airnb as supply of information vacation rentals increased. If so, forget undermining craigslist, it’s cannibalizing the real hotel/motel market and those businesses pay taxes and employ workers, so this whole business model is really about regulatory arbitrage.

  30. Posted by johnny

    complex
    you need to remember that there is a cost (and risk)associated w/every turnover in rental.
    in general, imagine the longer the lease the lower the associated cost of transacting that lease and presumably there would be lower risk, economic and otherwise, associated w/that lease.
    the benefit of airbnb is the ability to freely negotiate between parties unencumbered by the associated regulatory costs that I bet the typical parties to transactions could care less about.

  31. Posted by Brahma (incensed renter)

    kddid wrote:

    You guys have missed the point…The original ordinance is similar to the Federal Clean Water Act and other laws which give citizens power to enforce regulations when the government cannot or will not. Without this change, only the government or individual citizens could enforce the ordinance. This proposal specifically allows for non-profits to be the enforcer…so you can sure they will be scouring AirBnB, VRBO, and Craigslist to find the “perpetrators” and bring them to justice.

    Yep. Sounds like an innovative and “disruptive” way to enforce municipal policy while avoiding having to hire expensive and/or unionized city workers to perform said enforcement. Also avoids the marginal increase in pension costs. Minimizes bureaucracy.
    Who knew that Supervisor Chiu was a conservative?

  32. Posted by SocketSite

    FYI, according to the code referenced, the penalties only potentially apply to vacation rentals in apartment buildings with 4 or more units (see SEC. 41A.4 Definitions).
    That’s not correct. The definition of an Apartment Unit per Section 41A.4.a:

    Room or rooms in any building, or portion thereof, which is designed, built, rented, leased, let or hired out to be occupied or which is occupied as the home or residence of four or more households living independently of each other in dwelling units as defined in the San Francisco Housing Code, provided that the apartment unit was occupied by a permanent resident on or after February 8, 1981.

    The emphasis on the “or” is ours.

  33. Posted by geekgrrl

    @SocketSite – my bad, renting rooms within a house/unit are covered by the ordinance, apologies for the confusion.

  34. Posted by shza

    kddid & Brahma, permitting third-party plaintiffs to collect civil penalties in order to incentivize them to spend money to enforce a statute that the state is too stretched to enforce is not particularly new, innovative, or malicious. That is the typical mode of enforcement for most civil antitrust laws, among many others. The term of art is “private attorney general” (the law is, through monetary incentives, deputizing private parties to enforce public law).
    kddid, you’re free to file your own lawsuits too.

  35. Posted by wrath

    imagine a world where Telegraph Hill Dwellers are the Blackwater of San Francisco (while at the same time retaining the ability to rent on their own) – looks like you no longer need to imagine.
    aside from the above, does this basically kill the corporate rental (I don’t mean to others but to the company’s own employees) or not? It seems to talk about the employees of the owner; on the other hand it says it will not be offered for “rent” implying that you are supposed to be paying rents to the owner which an employee typically will not be doing (at least not in cash);

  36. Posted by kddid

    shza – that was the point I was making – citizen suit provisions are not new at all, and are in the current ordinance. What is new is that Chiu’s proposal opens that provision up specifically to non-profits. Most individuals either won’t know enough or won’t go through the hassle of filing suit over such a minor issue. Without Chiu’s provision, non-profits like SFTU have no standing to bring suit – if they wanted to enforce the ordinance they would have to find some aggrieved citizens and connect them with some pro bono lawyer to take the case and SFTU WOULD GET NOTHING OUT OF IT (unless they cut some side deal with the lawyer or the plaintiff). Chiu’s proposal gets rid of the middleman -SFTU or other non-profits that have the resources and expertise can file these suits directly, and can keep not only legal expenses but the civil penalties. That is new, and will make it much more likely that we will see more of these suits.

  37. Posted by lyqwyd

    what I find interesting about this is that this law has fairly stiff penalties for owners, but nothing to punish tenants who do the same.

  38. Posted by anon

    Any unemployed lawyers out there? Yes, I know, there are thousands. Just set-up a non-profit – the “preservation of san francisco housing law group” and then start scanning VRBO and airbnb listings and make yourself a pile of money! And you even get attorneys fees! fish in a barrel.

  39. Posted by Brahma (incensed renter)

    The resources available to your boogyman groups like Telegraph Hill Dwellers or The SF Tenants Union (what? No one brought up The Mission Anti-displacement Coalition?) aren’t unlimited, even if they are incentivised to file suit because of the provision to recover attorney’s fees and the civil penalties.
    If I understand it correctly, they’ll only get to recover the penalties mentioned if they win a lawsuit, and like I said above, the expenses of discovery will tend to have a countervailing effect to filing lots of lawsuits because those costs are so high.
    So I don’t think adding non-profits to the list of potential complainants will probably lead to a marginal increase in the number of lawsuits filed, even if there are lawyers out there willing to take on these cases on contingency. There are lots of other costs involved that the non-profit would have to cover up front.
    But suppose The SF Tenants Union is the big boogyman organization that some folks here say it is (I have no connection or special knowledge on this, btw). Landlords have The Small Property Owners of San Francisco Institute, and it can raise money to fight off these lawsuits on behalf of landlords, both amateur and professional, in the same way that The National Rifle Association gets involved anytime a municipality attempts to regulate handguns.

  40. Posted by lol

    Who knew that Supervisor Chiu was a conservative?
    Brahma, I do see the tongue-in-cheek. Chiu actually tries to get an old rule applied. This law was probably voted with the idea that it would appease the ever unhappy tenant union and would be so hard to enforce that it would be moot from day one.
    Sometimes lax enforcement on minor non-criminal issues is the grease that helps a complex real-life system work despite an overabundance of rules that are sometimes contradictory or non-productive. For instance some people will double-park their U-Haul when they move. Or cars are parked more than 3 days in the same space. Or many many things that we all do each and every day that we know we shouldn’t but actually do not cause too much harm. Movement is impossible in an hyperstatic system…

  41. Posted by Brahma (incensed renter)

    I should have also mentioned The Building Owners and Managers Association of San Francisco, which has a dedicated political action committee:

    Each election cycle, BOMA analyzes local ballot initiatives and interviews local candidates. When necessary, BOMA is prepared to bring its own policy initiatives to voters directly…Most importantly, we raise the money to wage effective campaigns and we win.

    Emphasis added. BOMA’s oriented more toward business property owners, so I don’t know if they’ll get involved in this, but landlords certainly aren’t on their own.

  42. Posted by kddid

    Brahma, they don’t have to prove anything as complex as causation of bedbug infestation. The ordinance only says a complainant has to demonstrate the owner has offered an apartment unit for tourist or transient rental. We’re not talking deep discovery here – respond to an AirBnB or VRBO posting, get the name of the person renting the unit, figure out from public records if they own the unit, and VOILA – evidence enough of a violation. Yes, anyone could do it, but most people don’t have the motivation or the time. But any reasonably staffed group could spend $500 for a lawyer to draw up a boilerplate complaint and have volunteers fill the blanks in with information from the internet. Even if they win 1 out of 5 cases they get enough revenue to fund more cases.
    “This law was probably voted with the idea that it would appease the ever unhappy tenant union and would be so hard to enforce that it would be moot from day one.”
    This probably explains why Chiu made this proposal. It may never get used, but I guess we’ll have to troll the superior court to find out.

  43. Posted by shza

    The scope of damages (“penalty”) is unclear. The violation is, as kddid points out, defined in terms of the offer (“It shall be unlawful for any owner to offer an apartment unit for rent for tourist or transient use.”). But the civil penalty is for up to “$1,000 per day for the period of the unlawful rental.” “Rental” is not defined but the natural interpretation is that it refers to an actual period of bargained-for occupancy — not just an offer of same.
    So despite the violation occurring as soon as the listing goes up, it seems no penalty actually attaches until someone at a minimum agrees to stay at the place and, likely, actually stays there. So the cost of discovery is somewhat higher — you’d have to do more than simply file a complaint attaching a printout of the listing — though that may be enough to beat a demurrer and allow you to serve a document request for all docs relating to the rental of the property for less than 30 days, etc. etc.
    Discovery is entirely one-way here, so far more expensive for the airbnb landlord than the non-profit plaintiff (or “interested” neighbor).
    Because it’s a civil penalty rather than a true private damages award, however, this isn’t the type of thing where plaintiffs can just roll these guys by filing a thousand suits and taking $500 settlements (since it’s not technically their case to settle).

  44. Posted by lol

    kddid,
    My comment was about the original law. Chiu’s addition is actually to give this law teeth by giving a more practical frame along with a financial incentive. But was it intended to be enforced?
    As always with well-wishing initiatives, brace yourself for the “unintended consequences” that will come 10 or 20 years down the line. Dysfunction will ensue. Nature will find a way around as it always does. Outcry will come. More inane regulation will be voted.

  45. Posted by shza

    lol, the financial incentive is already present in the current law. Chiu’s addition just broadens the class of potential plaintiffs (to include housing-directed non-profits).

  46. Posted by eddy

    ^^Exactly. It hasn’t stopped this practice and there would be a major uproar if we started to see this being enforced. I’m surprised AirBnB isn’t trying to get in front of it; but I guess there is no need to call attention to a law that isn’t being enforced. I’m calling FUD until we see a case; or wide-spread case. But it’s good to bring the issue to light in any event.

  47. Posted by redseca2

    So airbnb.com is kind of like Napster?
    In that it is stepping on a million contracts, county, state, federal and international laws, but that don’t matter because they are so darn cute?

  48. Posted by Brahma (incensed renter)

    kddid, that was just an example, but you make a very good point about the violation being just about the offer and not necessarily about any follow-on deleterious effects.
    lyqwyd wrote:

    what I find interesting about this is that this law has fairly stiff penalties for owners, but nothing to punish tenants who do the same.

    Depending on the terms of the lease, the landlord can take care of punishing tenants by terminating their lease.
    I read your comment and grabbed my copy of the most recent lease I signed, and my landlord has a few clauses in it that would prevent me from listing my unit on Airbnb without immediately violating my lease agreement. Here’s just one, for example:

    Assignment and Subletting:
    Tenant shall not transfer this agreement or sublet any portion of the leased premises without the prior written consent of the landlord, which consent shall not be unreasonably withheld…

    After that it goes on to list a whole host of reasons that consent to sublet will be withheld regardless of whether or not it’s deemed reasonable, including that the subtenant doesn’t have the required, verified financial ability or stability, has a poor credit history, blah, blah, blah. There’s a whole other section describing rules about “guests” of the tenant.
    Airbnb calls people participating in this scheme “guests” and “hosts” like this is all just an internet-facilitated hostel arrangement for college-age backpackers, but since money is changing hands as compensation for access to the properties listed, I think it’d be easy for a judge to consider this just a subleasing scheme if “hosts” don’t own the property in question.
    I don’t know a lot about Airbnb other than what I’ve read in the popular press, but assuming that most landlords have similar lease provisions to the one I excerpted, if a lessee wanted to list a place on Airbnb, they’d have to get prior consent from their landlord, and the landlord could just say “nope”, because the lessee couldn’t provide the detailed financial information on the “Airbnb guest” prior to the stay that a landlord requires to make a determination that a tenant will be financially stable or responsible what have you. Such a landlord seems unlikely to accept an Airbnb “user profile” in lieu of a clean credit report and references, and a lot of landlords, including mine, charge a hefty fee payable in advance to pre-approve a subtenant.
    All that said, there’s always going to be renters that just want to flout the rules, and there are some landlords that aren’t sticklers about enforcing lease provisions or that have weak lease agreements, so it wouldn’t surprise me to see leased units appearing on Airbnb. I just wouldn’t expect it to be common.

  49. Posted by 48yo hipster

    The reason airbnb doesn’t care about this law is because they operate nationally, and this kook-koo law is SF specific.
    The ex-Lembis had a few buildings operating as short term corporate rentals. If they’re not paying that hotel tax thing, they may be under the radar of a tenant activist group. I doubt they would go after onesi-twosie landlords- but there must be plenty of those in the city not happy about this provision.

  50. Posted by anon

    Who cares about proving penalties? You show they offered the place for hotel use and you get an injunction and you’ve “won” so now you get attorneys fees. The landlord being sued pays his own lawyer $20,000 (plus misses a few days of work for depositions) and then has to pay the “non-profit’s” lawyers another $20,000. After about three of these cases, which again are fish in a barrel, word will get out that this is manna for plaintiffs attorneys.

  51. Posted by shza

    Who cares about proving penalties? You show they offered the place for hotel use and you get an injunction and you’ve “won” so now you get attorneys fees.
    That may be the case for certain non-profits that are mission-driven to stamp this type of thing out specifically (versus other, generally more pressing, housing issues). But the attorney fee provision obviously doesn’t supply any independent incentive for a plaintiff to bring the suit. (And btw, there’s no way it costs $20k for the minimal work done by whatever two-bit shop would handle stuff this local and piddly.)
    I go back to my earlier hypothesis that hotel groups may incorporate their own non-profits to file these lawsuits. They’re the ones with a true business interest and external (to the penalty provision) incentives to act.

  52. Posted by hmmm

    I could certainly see the large hotels in the City banding together to try to enforce this rule. Why? Because they clearly have to pay the hotel tax and here you have potentially thousands of rooms being rented illegally and unfairly not paying the hotel tax, let alone the fact that units are just illegally being rented as tourist rooms at all and these hotels had to go through serious process and get the right approvals to build and operate.
    I don’t see any rational policy reason for turning a blind eye to this. There’s the huge tax losses to the City and there’s basic fact that it’s just plain unlawful to rent units/rooms for short-term tourist/corporate stay without the proper approvals, if even allowable in that zoning district and all of the housing policy considerations that go along with that.
    And legally there’s no difference between Air BNB and VRBO. I don’t have a conceptual problem with either. The premise of the service is that the people are renting their places are doing so legally and paying any applicable taxes.

  53. Posted by eddy

    The city and taxi authority tried to come after UberCab over a similar issue. They changed their name to Uber and the problem went away. It will be a burden to even attempt to enforce this thing. And I don’t feel sorry for the city losing revenue due to lost taxes and I doubt that is the real issue here. This whole thing is funny.

  54. Posted by lol

    hmmm,
    The effects to the city coffers and the hotel industry are collateral damages.
    The reason behind these rentals is not really greed. It’s a pain to have frequent turnover, you have higher wear and tear on your property, your neighbors will not always like having new faces that often in their building, you multiply risk with each and every tenant.
    As I said earlier, I am renting a place with very similar rental restrictions in another city using the monthly corporate schema. Even with the rental renewed every few months I have to deal with some of these issues. Overall the moneys collected end up in par with a market rate rental for many reasons.
    My issue with keeping my units off the regular market is that punitive rules are set on my property by someone who is not helping me or protecting me in any way. The game is slanted. I take the risk and yet my rent would be pegged for as long as the renter wants to stay. I cannot afford subsidizing a tenant for 30+ years, and I do want to cut on maintenance to make up for the lower income. I found an alternative and it is 100% legal. If prospective tenants are angry at the lack of available market units, they should vote these laws out and the clowns who created this dead end situation along with them.

  55. Posted by Brahma (incensed renter)

    Brahma, I do see the tongue-in-cheek. Chiu actually tries to get an old rule applied. This law was probably voted with the idea that it would appease the ever unhappy tenant union and would be so hard to enforce that it would be moot from day one.

    It was tongue-in-cheek but only the last line. This is a fairly simple issue to understand on its face.
    Airbnb and to a certain extent VRBO have business models that revolve around facilitating illegal or at best quasi legal transactions. Many of the units listed on these sites are not zoned for vacation rentals and when they are occupied in the manner of a vacation rental, it imposes negative externalities on neighbors, other property owners, etc. The owners usually don’t have the requisite licensing and haven’t conformed to the relevant codes. This is exactly what johnny is admitting when he writes:

    the benefit of airbnb is the ability to freely negotiate between parties unencumbered by the associated regulatory costs that I bet the typical parties to transactions could care less about.

    Well, duh. As I said above, this is really about regulatory arbitrage.
    The City has the regulations for a reason. Some folks don’t want to conform to those regulations because it involves a cost of some kind that they don’t want to pay (the hotel room tax is just one example), more often than not because they’re just greedy and they’d rather put that money in their own pocket (e.g., not have to pay the hotel room tax). But they can’t just come out and admit that, so they invent all kinds of hokey rationalizations (“this is just to appease the ever unhappy tenant union”) to justify their opposition to whatever regulation is extant or proposed.
    It’s really not difficult to understand. The city regulations are there for good reasons, the people who want to flout those rules because it is in their economic interests to do so will not be convinced by any rationale, no matter how logical, so the city has to pass more laws to reach the desired enforcement level. This proposed amendment is a decent attempt to increase enforcement without incurring a lot of overhead. I don’t think it will have a huge effect, but it’s at least worth trying.

  56. Posted by R

    Well said. And I’d add there’s not much of a downside, unless you are illegally renting your unit. In which case, you asked for it.

  57. Posted by lol

    Brahma, I didn’t deny the illegality of these rentals. Just that the people who voted the original law didn’t give it any teeth. I give a reason for it (they knew it would be too huge a task to enforce). If Chiu manages to change the law that will be another story as the usual suspects will have a new shiny and lethal weapon at their belt.
    In any case. The more laws like these are voted, the less regular rentals will be out there and the more expensive they will become.

  58. Posted by kddid

    I agree with Brahma completely, but with a guilty conscience. I’ve rented VRBO houses a lot – not in SF – since I enjoy the comfort of a house over a hotel in many cases (and it can be a lot cheaper if you have a lot of people). All of the ones I’ve rented collect hotel tax, though I can’t verify if they actually PAID that to the government. I would be sad if this affordable and comfortable type of accomodation went away!!

  59. Posted by kathleen

    Most renters are violating the no subletting clause in their lease if they use airbnb.
    Homeowners will owe the city hotel tax if they use airbnb.

  60. Posted by anon

    As far as I can discern, this new tax rule confirms that rentals like those brokered by airbnb must may the hotel tax, and airbnb is the entity that must collect and pay it, and they must pay it regardless of whether it is actually collected.
    http://www.sftreasurer.org/modules/showdocument.aspx?documentid=263

  61. Posted by Rillion

    People that help buy elections should be exempt from taxes, its the American Way.

  62. Posted by anon

    So I am a little confused on a couple of points. Firstly the law seems to state that the renter is the party that can be sued. So how does the statement in the treasurers memo work with that claiming that AirBnB is responsible for the taxes whether withheld or not. If as an owner/lessee I am sued I’m going to turn around and say it’s AirBnB’s problem. They are going to turn around and cite the original law and say it’s the lessee’s problem. Sounds like several years of expensive litigation in State court to me.
    Also, bed bugs aside, there will presumably be a burden of proof on the entity filing the suit. The up to a $1000 fine per day is for actually renting something, not just advertising something for rent, someone presumably will have to demonstrate that money changed hands beyond some reasonable doubt. An online calender hardly does that, it only marks the days the apartment is not available, if I were letting my friend or family stay there for free presumably that is not illegal. So someone is going to have to demonstrate it was illegal transaction, does this mean they need witnesses or to actually book rooms exchange money etc?
    At the end of the day this will likely end up being the same as all the other efforts to control housing and rents in this city, counterproductive and just more bureaucratic headaches for people who are just trying to live here and get by.

  63. Posted by the Hitman

    I disagree with the Socketsite interpretation that the law applies to 1, 2 & 3 unit buildings. Your emphasis on the last “or” would not make sense. The preposition “as the home or residence of 4 or more households” modifies all prior verbs.
    Thus, an apartment unit is a room or room that is:
    designed (as the home or residence of 4 or more households)
    Built (as the home or residence of 4 or more households)
    Rented (as the home or residence of 4 or more households)
    Leased (as the home or residence of 4 or more households)
    Let (as the home or residence of 4 or more households)
    Hired out (as the home or residence of 4 or more households)
    If the term Apartment Unit was so broad to include all residential units, Chiu could just define it as “all residential units”.
    In any event this is poorly drafted and will allow me and my new non-profit the ability to attack several AirBNB landlords! Thanks!

  64. Posted by Jacob Kane

    Airbnb Is One Of the scariest most unprofessional, unorganized, unhealthy organizations in San Francisco. I hosted after doing couchsurfing… found out i could get money to rent my spare bed or couch to people… Airbnb does not even meet you or know you or does not even respect the idea that people may bring bedbugs or steal or go through your stuff when your not at home. Such is the case of all three with me. I have reported them to the better business bureau. There are some serious health code issues and professional standard issues that are left in the gray because its a fly by night operation. There are no standards of excellence whatsoever and it is unsafe and it is causing the spread of bedbugs in SF. Thats just half the story. Nightmare!!!! Don’t Do It. It should be illegal.

  65. Posted by Eddy

    Speaking of FUD^^^, whatever happened to the above amendment that was the subject of this post? Plugged in readers want to know!

  66. Posted by V.Hanson

    I’m calling FUD until we see a case
    There has been a case won by a CityApts avatar to oust a long-term tenant, on the implicit basis that the city of SF was an implicit ‘interested party’. Got an eviction based on ‘use of premises for illegal purposes’ with only evidence of airb&b listings & feedback & no Planning Dept. citation, as prescribed in the statute.

  67. Posted by eddy

    @V
    I was talking about a case where the aforementioned amendment was enforced by a non-profit. I’m pretty sure CityApts is a for profit entity. Obviously, a landlord can take action on a breached lease term.

  68. Posted by Katya

    I’ve just got eviction notice from my landlord citing Chapter41A! I did use airbnb. Anyone can recommend strong lawyer who might have successfully dealt with similar cases? Any advice you can provide? Would appreciate any info you can share!

  69. Posted by emanon

    Katya, my advice is to follow the rules in your next rental.

  70. Posted by lol

    Katya,
    I think the sftu.org website is the first place to go for you. Good luck on your rental.
    airbnb is like a honeypot put in front of tenants. Beware, beware, especially if you are already having a very sweet rent controlled deal. You do not know how good you have it until you lose it. It’s a wild place for prospective tenants out there today.
    Many landlords find the current laws pretty biased and counter-productive to the general interest. If the law provides them the means to strike back, why would they hesitate? Once a place is freed-up, it’s ka-ching time.

  71. Posted by Jackson

    I am aware of an similar case on the 700 block of Sanchez street where a rent-controlled tenant, renting to tourists by using AirBNB, was evicted.
    The landlord used the online advertizing, and neighbors testimony of seeing suitcase wheeling tourists as proof.

  72. Posted by EchoIt

    Personally I’m glad landlords can use that tool. I’m a fan of AirBNB but not when folks are misusing it. Cracking down on that helps and keeping things above board will help keep the service legit.
    I echo LOL’s comments: you do not know how good you (may) have it until you (may) lose it.

  73. Posted by Dr Poone

    I agree that it’s legally dubious to hold a lease that you *don’t* live at and rent it out on AirBnb. Renting spare bedrooms in this manner also qualifies.
    However, I really don’t see what’s wrong with renting out your own place when you’re on vacation. How does that hurt anyone? Leases and the law should be updated to reflect this. It’s just a nice way to make SF more affordable for everyone.

  74. Posted by Fishchum

    Dr – Why? Because there are liability and safety issues with giving strangers the keys to your apartment, that’s why.
    Since when is it a private property owner’s responsibility to make San Francisco a more affordable place for everyone?

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