San Francisco’s Short-Term Rental Market Faces Big Changes From New Airbnb-Focused Legislation

San Francisco Supervisor David Chiu introduced legislation Tuesday that would change how city residents can rent out rooms at homes and apartments through home-sharing websites such as Airbnb.

Chiu has proposed regulating short-term rentals through a program that would require residents trying to rent their home for less than 30 days at a time to register with the city’s Department of Building Inspection.

The legislation would also require that the homeowner or tenant primarily live in the home for at least nine months, or three-quarters, of the year, and that the resident or hosting service provide liability insurance for guests temporarily living at the home.

Businesses and residents that work with short-term rentals would be required to collect and remit a hotel, or transient occupancy, tax, and would have to inform users about the new rental laws.

Currently, city law does not allow for any form of rentals at residential homes for short stays.

With the growth of on- and offline home-sharing services such as Airbnb, VRBO, Craigslist and others, Chiu said this issue needs regulation.

He said there has been an “explosion” of short-term housing offered in SF, which has lead to the “unacceptable” practice of property owners taking entire units off the marketplace.

Chiu said his legislation aims to prevent owners from evicting tenants to convert apartments into short-term housing units and start running what is essentially an illegal hotel.

He acknowledged that some residents use short-term rentals “to make ends meet.” He said services offered through Airbnb and other sites are a “way for many San Franciscans to pay rent and put food on the table.”

Under the proposal to legally offer short-term rentals, qualified residents would register for $50 to be placed on a two-year registry, which would list an address but no names.

Violators, which the city’s Planning Department would track through complaints, would be fined and blacklisted from listing their unit on rental services until coming into compliance.

City Planning Department director John Rahaim said there has been an increasing number of complaints about home sharing and that the department sees this legislation as a way to regulate and cut back on short-term rental abuses.

The legislation would not allow owners with secondary or vacation homes in the city to do short-term rentals, to protect the city’s stock of housing, according to Chiu.

The legislation would also prohibit owners or tenants from charging more than a months’ rent for the short-term rental.

“We want to make clear that no one can make more than the rent due,” Chiu said.

He is aiming to cut back on profiteering in the so-called “sharing economy.”

Chiu announced the legislation on Tax Day, in what he called a symbolic gesture, with Airbnb agreeing on March 31 to pay a hotel tax for its housing services.

Airbnb released a statement on their public policy blog Tuesday morning praising Chiu for taking a “critical step towards recognizing the benefits of home-sharing for everyone in San Francisco.”

In the post, the company said “we strongly believe Airbnb helps make San Francisco more affordable for homeowners and tenants alike.”

The post noted provisions of the proposal “that could be problematic to our hosting community” including the registration system, which the company said would make personal information public.

“There is much work to be done to ensure that we pass legislation that is progressive, fair, and good for San Francisco and our hosting community,” the company stated.

All residential buildings with two or more units would be subject to the proposed legislation.

If the proposal passes, the new short-term housing laws wouldn’t go into effect for several more months, Chiu said.

There would be no retroactive regulation, but would apply to all future short-term rentals.

Sasha Lekach, Bay City News