Supervisor David Chiu is slated to introduce new legislation this afternoon which would lift the outright ban on short-term rentals in San Francisco but establish a new set of rules by which airbnb hosts and others would have to adhere.

In multiunit buildings, the legislation would allow short-term rentals only in apartments where someone lives 75 percent of the year, effectively banning a unit from becoming a full-time vacation rental. It would require anyone renting out their place to pay hotel taxes, hold liability insurance and register with the city every two years.

If people fail to play by the rules and are reported to the city, the proposal would force websites to ban those renters. It also requires these “hosting platforms” to tell users of city laws and to collect and remit the city’s 14 percent hotel tax.

As proposed, the new law wouldn’t apply to single-family homes and would not supersede the terms of an existing lease (i.e., illegally subletting would still be grounds for eviction).

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Comments from “Plugged-In” Readers

  1. Posted by eddy

    Considering the effect the “outright ban” is having (i.e., almost none), these seem like fair rules and perhaps a model for other cities. Although, I can see some murky situations arising from TICs and what if a Condo CCRs expressly permit Airbnb. Not sure about the enforcement of banning those who violate the rules. Overall, I’m not sure we need laws governing this other than to ensure users have liability insurance and to pay taxes; which should be table stakes for firms like Airbnb to enable you to rent out your place.

  2. Posted by Hitman

    Pro-tenant anti landlord legislation…. a complete disappointment.

  3. Posted by SFHelmut

    Unless the legislation mandates that the tenant must received the landlord/owner’s express written permission, this proposed legislation blows.

  4. Posted by Sunset

    What about in-law units? Do they have the 75% requirement as well?

  5. Posted by mdg

    Hey David Chiu
    I won’t tell you how to live in your house
    And you won’t tell me how to live in mine
    Screw Chiu

  6. Posted by jimmy

    Another reason to Ellis your building. Your tenants can make money off your property; but sorry owner, you can’t.
    Another taking and another reason that rental prices will continue to escalate.

  7. Posted by MarinaBoy

    Just crazy! I agree with Jimmy makes me want to Ellis all my properties and leave them empty! How can a tenant in a rent control apartment be able to break my lease and not get in trouble for it. Thanks!

  8. Posted by Brian

    AirBnB should build out their 1 – 6 month short term, business traveler marketplace.

  9. Posted by tommybabe

    Chui gotta lotta nerve!
    Tenants undergo credit (and criminal) background checks…visitors don’t!
    What’s that…oh yea…my tax $$$$$$s being spent as SF City takes on liability for the lawsuits when good law abiding tenants are robbed, etc. by legislation that puts its citizens in danger.

  10. Posted by Wonkster

    Tommybabe:
    You can make lots of arguments against this but the argument that tax dollars will be wasted on lawsuits against the city doesn’t fly. I don’t think you can sue a city for passing a law like this even if you are robbed. And the whole point of the legislation (or at least a major point) is to collect city taxes that are currently being avoided. The tax impact here is almost certainly positive for SF.
    The way I read this proposal is that if a tenant has a lease that prohibits subtenants or long term guests they couldn’t do Airbnb. But it’s not clear to me.
    The folks who will really get gored by this are the ones that have effectively converted rental units into hotel rooms. I know of at least 10 units like that in my neighborhood (Russian Hill, which is attractive to tourists). They will either have to put those units on the rental market again or, as some have suggested, let them sit idle. Given the rents being collected these days, I’d be surprised to see them just sit vacant.

  11. Posted by Mike

    I am a techie landlord (most evil person in SF, by current definition).
    I have a no-subleasing clause in the rental agreement with my tenant. I would imagine there is no way this could be overridden via Chiu’s legislation.
    Its a pretty standard thing to have a no-subleasing clause in lease agreements.

  12. Posted by Futurist

    @ mdg:
    It’s not about “how to live in your house”. It’s about WHAT you can do with your house.
    You can’t install a gas station at your single family house.
    You can’t install a liquor license and bar in your house.
    You can’t install a car repair shop in your house.
    You can’t just do what you want with your house.
    There are rules. there are codes. there are zoning restrictions.

  13. Posted by mdg

    @futurist
    Making an analogy to having guests, paying guests, staying in your house to running a gas station, a car repair ship etc is just plain stupid.
    The AirBNB concept is no different from renting out a room to a roommate
    Is that next…? Is that illegal. No, it is not. The use of living space for living is the right of the landowner. Full stop. Will SF tell me how many people I can have over for dinner now too….?
    And given all of the crap that SF does to vilify landowners (Yes, I am a landowner AND a Landlord) – I’ll gladly take Chiu on for this. His ideas are almost as stupid as everything that comes out of David Campos office or came from Daly.
    Thanks he’s gone….

  14. Posted by anon

    I believe most condo HOA’s would still ban AirBNB activity as any inclination from a lender that some units work as hotels would stop lending in the building, at least until banks or Fannie would change their guidelines, but I would doubt they would re-write guides for AirBNB

  15. Posted by shza

    mdg, the closer analogy, of course, is to hotels, which you cannot operate without following a number of regulations and paying a number of taxes.

  16. Posted by anon

    Landlords, this ordinance is awesome for you. Make sure you have a no subletting clause in your lease, which you should anyway.
    First, under the ordinance, your tenant will have to register if they want to AirBNB. Just get the public list, and if your tenant is on there, evict them for breaking the lease.
    Second, if your tenant does AirBNB, they are almost certainly not going to comply with the law, either by not registering or not getting the proper liability policy. Then you can also evict them for breaking the law.
    Now, as to those landlords who are routinely breaking the current law by using your unit as a full-time AirBNB hotel? Yeah, you’re screwed. But you were breaking the law before, and you can just continue to do so.

  17. Posted by Futurist

    Actually the use of living space for living is NOT without regulations and controls to the owner.
    It’s not really “full stop”. It’s not unlimited and unregulated use for any property anywhere.
    There are code issues relating to the number of people actually living in a unit, with regard to safety, exiting, toilets and other physical attributes. I don’t believe you could rent out a 2 bedroom house to 35 people even if you wanted to and they wanted it.
    AirBnB needs to follow regulations, codes, laws and pay taxes.

  18. Posted by Rillion

    mdg: “Will SF tell me how many people I can have over for dinner now too….?”
    If you do it regularly and charging them money for the dinner, yes, the city will impose some regulations on you. Shocking I know to learn that businesses are regulated, even businesses being run out of your “home”.

  19. Posted by R

    “I don’t believe you could rent out a 2 bedroom house to 35 people even if you wanted to and they wanted it.”
    You can. I’ve seen it. Probably illegal, but nobody’s going to stop you. And overcrowding is not grounds for eviction.

  20. Posted by Futurist

    Yes, overcrowding is a grounds for eviction.
    The SB DBI and the Fire Department would immediately step in (once they know) and simply cite exiting and fire safety issues, if you were housing 35 people in a 2 BR unit.
    They would not hesitate to evict. Just imagine the tragedy if there WERE a fire.
    Another example: what if an AirBnB unit were renting a room behind a garage and the unit had no smoke/carbon dioxide detectors? And a fire occurred?
    Codes and regulations are for a reason, not to to “infringe” on your so called “rights”. They are designed to protect human life.

  21. Posted by anon

    Oh, yeah, I remember when we were looking for our first place in the late 1990s, our realtor showed us one 2 BR place in the Mission that had at least 30 people living in it, plus another half-dozen in the “tool shed” in the small yard. Really gross. We had no interest in dealing with that and passed (although the price was good, and a buyer who had no qualms about booting all those people would have made a mint).

  22. Posted by lol

    Chiu does what Chiu does best: screw things up.
    On one side of the spectrum you have a tech revolution happening right in our city. We are at the forefront of it. We have the right people, the right culture. The world is looking at us all the time for what it will look like 5 years from now.
    And on the other side of the spectrum you have the passeists who long for whatever was there 5 years ago and is no more. Landlords who do airbnb will NOT go to regular rentals. People will simply switch strategy until Chiu proceeds in his clueless overreaching little man crusade.
    Well, all this means is that I am gonna get more competition from short-term rental types who are switching to my business model of 1-3 months corporate relocation. The margins are thinner though but I don’t mind. I still make a killing and I WILL NEVER BE RENT UNDER THE IDIOTIC RENT CONTROL LAWS PERIOD.
    Chiu really outdid himself. He just can’t get a clue.

  23. Posted by R

    @Futurist: Take it to the rent board, and grandma shows up with her SFTU lawyer and says my grandkids were visiting for the weekend, tell me how well that eviction goes. It’s very very difficult to evict anyone. Trust me, I’ve gone down that road.

  24. Posted by mdg

    The fact that SF HAS, and always HAD, buildings with 2 bedrooms and 10, 12, 15 or more people living in it is nothing new. ANd regulating businesses and being reasonable is…reasonable. I bought a 2 unit buildings in 2000 that had…..hold on….36 people living in it. SF knew it and had done nothing about it for 12 YEARS.
    Its this Cities never ending focus to vilify Landlords, land owners etc that is unacceptable. WTF pays the taxes here….not those 35 poor souls living w/ 1 or 2 toilets. Renting out a spare Bedroom via AirBNB or Craigslist or whatever pales in comparison to what really happens. Go clean that up – and leave people alone to manage their properties. No one is hurt or bothered – whether it’s 1/10 days or 10/10 days rented to a tourist.
    Cheers

  25. Posted by Jackson

    MDG states: “The AirBNB concept is no different from renting out a room to a roommate.”
    Except that is incorrect. A master tenant may not charge additional money to sub-tenant (roommate) than proportional share of the rent, i.e. half the rent of a two bedroom apartment. They may not profit off the roommate.
    Recently, there was an adjudicated case where the master tenant was evicted for charging roommates more to cover his share of the rent.
    We both know a tourist’s Airbnb room rental will enrich the pocketbook of the master tenant, since that is the whole purpose.

  26. Posted by MamaBear

    I agree with Chiu on the reasonable 75% long term tenant rental only.
    Landlords are the one who is paying for management fee, property tax, etc. This law will be able to finally protect landlord from their property being released for a profit by someone else (those tenants who has already completely moved out 100%).
    If you are the owner of your property, and someone else is eating the profit while you are paying for all the expense to maintain this business, wouldn’t you be upset?

  27. Posted by SFHelmut

    The 75% clause does not help landlords. How exactly am I, as a landlord, supposed to figure out if a tenant is in the property 75% of the time?

  28. Posted by R

    Just take their word for it, of course.

  29. Posted by chitrana

    “If people fail to play by the rules and are reported to the city, the proposal would force websites to ban those renters.”
    Presumably, the city would simply ask AirBnB to ban users renting out their locations for more than 25% of the calendar year? Or alternatively, the city will know of the 75% rule based on unusually high annual tax receipts? Seems like a reasonable compromise that’s easy to enforce.

  30. Posted by DanRH

    @sunset – I am also wondering: how do in-laws factor in here? (ie, a SFH with an in-law).
    My thinking: if in-law is a separate (warrented, I think is the term) unit (which with recent legislation, it could become more easily), then technically it’s a 2-unit bldg now, in which case it’s treated as such.
    But if you keep your place as SFH with an in-law (that is NOT a separate unit, from the city perspective) then you are actually OK to keep listing that in-law on Airbnb/VRBO full time.
    If that’s true, wouldn’t landlords want to keep their in-law unwarranted / not converted into a separate unit? Because if it’s a separate warranted unit, then both it and my unit are subject to rent control AND I can’t list them on AirBnB/VRBO more than 25% of the time…

  31. Posted by Joseph A

    Tenants still need to deal with how their leases were written so it comes down to seeing if they can get them amended to allow them to rent out space a few days per month.
    The big impact though will be to make it harder for owners of apartment buildings to divert their housing from renters to hotel stock.

  32. Posted by Brahma (incensed renter)

    I completely agree with anon at 1:10 PM above, if/when this takes effect it’ll be an unmitigated boon for landlords, for all the reasons stated.
    And Joseph A at 8:00 AM, no rational, revenue-maximizing landlord is going to agree to amend a tenant’s lease to allow for partial AirBnB-type casual hotel usage unless the tenant agrees to pay a LOT more in rent to cover the increased risk.
    That’s true even without getting into the insurance ramifications, etc.
    Where there’s a normal “arms’ length” relationship between the lessor and tenant, that means the landlord is going to recoup almost all of the difference between the market rent and the amount available from AirBnB-type “guest” rentals, in which case it’s not economically feasible to go through the trouble of amending the lease.

  33. Posted by lol

    I have received a letter from airbnb today:

    Earlier this week, we told you about new proposed legislation that will help San Franciscans like you share your home.
    David Hantman, our Head of Global Public Policy, will be hosting a webinar tomorrow at 3:00 PM PT to take your questions. We hope you’ll join us and share your thoughts.
    But it’s also important that lawmakers hear from you about why this legislation is so critical. You may have heard that under current law, some predatory landlords are evicting Airbnb hosts, leaving them only 72 hours to vacate their homes and no opportunity for recourse.
    That’s why Peter, an Airbnb host and the leader of the Home Sharers of San Francisco Airbnb Group, started a petition that now has over 10,000 signatures calling on San Francisco lawmakers to fix the law and protect hosts from losing their homes.
    Sign Peter’s Petition to Stop the Evictions and Fix the Law in San Francisco.
    At this time, it is essential that lawmakers hear from San Francisco residents about how home sharing is helping everyday people pay their bills and keep their homes. I hope you’ll make your voice heard now by signing Peter’s petition.
    Thank you.
    Douglas Atkin
    Global Head of Community

  34. Posted by lol

    I especially love the term “predatory landlords”. Airbnb knows the BOS is stacked against landlords and want to be under their good graces. But this kinda makes me uncomfortable, because this sets a precedent from airbnb against landlords who just want to use their property as they see fit.
    Beware at trying to appease lunatics (aka BOS), because you can’t possibly predict what they will come up next.

  35. Posted by DanRH

    After giving this more thought:
    – overall I like the policy. I like how it provides a way to rent out your place now (for a few weeks a year). This is going to appeal to the thousands of folks that don’t do this today. This is a win for AirBnB and for folks wanting to stay in SF.
    – I don’t like how this excludes SFHs. From what I can tell, this means that if you own a SFH or a SFH with an unwarranted in-law, you are good to use AirBNB/VRBO for 52 weeks a year. I don’t like this. It promotoes a ‘hotel’ atmosphere to that SFHs neighbors. It potentially decreases the value of neighboring SFHs. It makes that SFH (and it’s unwarranted in-law) even less likely to ever be rented to San Francisco residents, or be sold to a San Francisco resident.

  36. Posted by DanRH

    @Brahma, one part that you’re missing: that landlord that had that unit full-time on AirBnB/VRBO cannot do that any longer. He can keep doing it illegally, true, but a neighbor can now more easily report him/her and AirBnB/VRBO will be forced to remove that unit from the website.
    I just spoke to someone I know who has a 4 unit building where one of the units is full-time on AirBnB/VRBO. He’s bummed. His plan is to now turn that unit back on over to the normal rental market.

  37. Posted by Brahma (incensed renter)

    DanRH: I concede that.
    A “landlord who had that unit full-time on AirBnB/VRBO” should go through the process of locating their unit in/on a property properly zoned for a hotel and pay the necessary taxes and conform to the all the regulations that a hotel would have to. Because what they were doing was improper regulatory arbitrage, and it was tenuous position all along.

  38. Posted by lol

    ^ or the landlord could simply choose to rent for 30+ days and stay outside of the definition of “short term stay”.
    But I wouldn’t advise that, for the sole reason that they would compete with my lean mean money making machine.

  39. Posted by lol

    I’ll add that 30+ days means the tenant could claim this is subject to rent control laws. But since the rental rate is roughly 20% to 30% over regular rents, no guest would ever think to lock himself into a high rent lease.

  40. Posted by Brahma (incensed renter)

    lol wrote:

    But this kinda makes me uncomfortable, because this sets a precedent from airbnb against landlords who just want to use their property as they see fit.

    What you don’t seem to get is that a property owner has never been able to “use their property as they see fit” with no regulation. AirBnB is now and always has been exploiting the propensity of landlords to do something illegal in pursuit of a financial gain.
    Land use in the United States hasn’t been absolute ever.
    Ask yourself how would you like it if I bought the building next to yours and started operating a Sriracha sauce factory out of it and the fumes and other side effects from that use made your AirBnB “guests” unlikely to ever stay at your place again, and I justified as “just wanting to use my property as I see fit?”

  41. Posted by lol

    I am not denying that, Brahma. For the record (broken record since I keep repeating it), my airbnb model is 30+days and therefore neither illegal nor subject to transient residency tax. Also, I will welcome any guest claiming that their 30+ days stay is a regular lease. But this is not an economically interesting move therefore I don’t think this will ever happen.
    What I am really afraid of is that too many landlords doing short-term airbnb will decide to do what I am doing. Then as the number of 1-to-6 months rentals explodes, an idiot at the Comical or SFBG will be outraged at the rates, or the success, or whatever. Then Chiu or another idiot will impose more limitations.
    To give you one example: France has a moderate rent control system, but market rents have risen quite a bit especially n Paris. The latest law voted in the past few days frames what a rental rate has to be in EURO/m2 depending on the area.
    My point: we have both been around long enough to witness the whack-a-mole game and the never ending attempts by the Supes to stop the market from changing SF (or what they think what SF should be). Their idiocy is only challenged by their creativity.

  42. Posted by DukeLaw

    Stop complaining about pro-landlord legislation that reins in your competition because of fear of future legislation.
    Right now this generally helps property owners instead of renters looking to make a buck.

  43. Posted by lol

    DukeLaw,
    Contrary to many I do not welcome changes ONLY when they are in my favor. The Supes are micro-managing this City due to too much time / too many people / too few issues people really care about.
    Every Supe is stepping over himself to get to the forefront of the easy fight (defending the little guy vs big guy).
    This reeks of populism. These are short term fixes (fixing the effects of high demand and low supply) for long term issues (not enough housing), and I am against every short term fix.
    Plus, if history teaches us anything, any short term fix came with its own unintended consequence(s). We all suffer for it because a few years from now the situation worsened beyond anything imaginable and they have to go back looking for stronger even less reasonable short term fixes.

  44. Posted by anon2

    Herrera sues short-term rental scofflaws for illegal conversions, unlawful business practices
    Two cases target ‘egregious offenders’—both involving Ellis Act evictions of disabled tenants to illegally convert residential apartments into tourist lodging”
    Apparently the city does plan to do some enforcement.

  45. Posted by lol

    It is deeply ironical that such a wastefully mismanaged city would bite the hands that fills the coffers. After all without the windfall from tech money (workers, companies, directly or indirectly) they wouldn’t be able to close the year.
    A sign of the waste: almost every time I pass on VN by City Hall there are trucks with party equipment, catering, etc. City Hall is in a forever party mode, funded by tech money. They always have something to celebrate, like how they stuck it to landlords or big tech. Oh the irony.

  46. Posted by The Milkshake of Despair

    lol – You might be seeing wedding receptions being catered. Some of the space around City Hall can be rented for events.

  47. Posted by lol

    MoD, I certainly hope you are correct. Still a city with too many city-funded overlapping not-for-profits, too many activists on the payroll throwing san franciscans against other san franciscans. Without tech money the main debate would be how to stay solvent and welcome new business, instead of waging anti-tech battles.
    [/end rant]

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