San Francisco to vote on measure to allow neighbors to sue over Airbnb

SAN FRANCISCO — In a city where real estate is an intensely political and highly contentious topic, San Franciscans are set to vote on a measure that would curtail use of short-term rental sites like Airbnb by cutting the number of allowable rentals to 75 nights a year per unit and adding other restrictions.

A severe housing crunch in San Francisco has made short-term rentals a major flashpoint. Supporters of Prop F, which is on the Nov. 3 ballot, say Airbnb takes desperately needed rental units off the market . It is supported by hotels, hotel unions, landlords, housing activists and some neighborhood groups.

"A lot of people think that San Francisco is becoming a rich person’s city and their argument is that this is taking away housing stock from tenants,” said Margaret Russell, a law professor at Santa Clara University in Santa Clara, Calif.

Prop F opponents say sites like Airbnb allow residents to bring in extra income from unused rooms so they can afford to stay in a city where real estate values are going through the roof. The No on F campaign is mainly supported by Airbnb and a coalition of its hosts.  Airbnb, the San Francisco-based home-share site led by CEO and co-founder Brian Chesky, has donated more than $8 million to defeat the proposed measure, according to the San Francisco Chronicle.

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"Prop. F is a hotel-backed measure that is falsely drawing a line between regular San Franciscans sharing their homes and a decades-long housing crisis," said Christopher Nulty, an Airbnb spokesman.

Cities around the nation are grappling with the rapid proliferation of what's sometimes called the "peer-to-peer economy," whether it's rooms on Airbnb, car rides on Uber or odd jobs on TaskRabbit.

This spring, Santa Monica, Calif. banned whole-apartment rentals for fewer than 30 days. Some New York City Council members have proposed upping fines for illegal short-term rentals to $10,000. New Orleans is discussing regulations. A Massachusetts politician believes short-term rentals should be subject to inspection.

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While Prop F is being touted by some as a referendum on the entire notion of the sharing economy, it's more a product of the politics around building in San Francisco, said Enrico Moretti, a professor of economics and expert on urban economies at the University of California-Berkeley.

"Rents and housing prices are increasing in San Francisco by and large because San Francisco has constrained new housing," not because of Airbnb and short-term rentals, Moretti said.

Airbnb is the largest of multiple sites that allow people to rent out rooms or entire apartments and houses short-term, with all payments handled through the web.

The city of 837,000 has about 6,000 Airbnb “hosts” who use it for short-term rentals. About 35% of Airbnb listings in the city are for entire apartments or homes, the rest for rooms, according to Airbnb.

SUBSIDIZING HIGH RENTS

For Blase Hents,  58, renting out a room in his four-bedroom flat makes it possible for him to work at a nonprofit and still afford San Francisco.

Hents and his partner share one room, they have roommates in two others and the fourth room he rents out on Airbnb for $100 a night. He sometimes also rents out a tiny 5-foot-wide room that just fits a bed and a dresser.

Being an Airbnb host gives him flexibility. “If I had to get a tenant for one of those rooms, when my mother came I wouldn’t have a place for her,” he said.

Those who live near Airbnb rentals aren't always so pleased.

Alan Resnik, 48, has lived on San Francisco’s Telegraph Hill for five years. He said his block has gone from a community feel to more like a hotel, with one house and units in two apartment buildings being used almost completely for Airbnb rentals.

“People are coming and going with suitcases multiple times a week,” he said. "These people are running businesses and it’s really unregulated and it needs to be regulated."

APARTMENTS IN SHORT SUPPLY

Due in part to an influx of tech jobs and in part the difficulties of building housing in the often change-adverse city, housing prices in San Francisco in the past few years have gone through the roof.

A one-bedroom apartment without parking was renting for about $3,000 in August, according to an analysis by the site Rent Jungle.

Rental units make up 65% of San Francisco's housing stock, but home prices, too, are rising. The city has one of the nation's highest shares of homes worth more than $1 million, 58% according to real estate site Trulia.

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SUE YOUR NEIGHBOR?

Under current San Francisco rules, only permanent residents may rent out rooms or their homes for fewer than 30 days. They must register with the city and pay a 14% hotel tax on what they earn from those rentals.

Those regulations themselves came as part of a fiercely fought battle earlier this year in the city's Board of Supervisors, the local equivalent of a city council, which made short-term rentals legal.

If Prop F passes, hosts would only be able to rent for 75 days a year, down from 90. They would be required to submit quarterly reports to the city detailing how often they rented to travelers and how many days they lived in their home. Short-term rental of in-law units would be illegal. Building owners would be notified by the city if their renters were renting out their units short term, as would everyone who lived within 100 feet of the unit being rented.

Proposition F, brought to ballot as an initiative by a petition drive, requires majority voter approval to pass. If it does, it would go into effect Jan. 1, 2016.

One of the more contentious portions of the measure would allow neighbors to sue those who violated the rules for up to $1,000 a day.

Current polling shows Prop F losing by 19 points, said Airbnb's Nulty. A survey conducted between Oct. 25 and Oct. 27 found that 55% of likely San Francisco voters would vote no and 36% yes.

ADVERTISING RUSH

Residents are being inundated with paper mailers on both sides of the issue, along with TV ads and billboards. Airbnb got heat last week  when it posted snarky ads implying residents should be grateful for the taxes it brings in.

The fight took a national turn Thursday when a New York-based group called ShareBetter launched an online ad aimed directly at Airbnb. Funded by hotel unions, elected officials and housing activists, the video accuses Airbnb of allowing corporate real estate interest to covert housing into hotels and evict tenants.

The real reason other cities should take notice of Prop F and the San Francisco election is because platforms like Airbnb create a parallel business system, a part of the economy that’s beyond the reach of regulation, Russell said.

“If they don’t like what’s happening in San Francisco," they need to get going with their own regulations, she said.