In a move that surprised many, on Tuesday San Francisco's Board of Supervisors approved legislation that hit amateur hotelier platforms in their soft and tender parts — and even SF's Airbnb-friendly Mayor is powerless to stop its enforcement.
Though companies like Airbnb, VRBO, and the like are notoriously non-transparent regarding data on their hosts, it's estimated that over a fifth of the revenue Airbnb makes in San Francisco come from listings that violate SF law. The company, itself, admitted in early April that around 20 percent of its SF properties were posted by people who were listing multiple units, which is against SF laws.
But though the company vowed to crack down on scofflaws, that wasn't enough for Supervisors David Campos and Aaron Peskin, who a few weeks after Airbnb's admission proposed legislation fining the company as much as $1000 per day for every rental unit that had not been registered with the city, as has been required for the past year.
As the legislation gathered support earlier this month, word from the Mayor Ed Lee's office seemed to suggest that he might veto the law. Lee, who has opposed attempts to regulate Airbnb and others in its industry in the past, "will consider the legislation when it reaches his desk," a mayoral spokesperson said, but warned that "It’s important to remember that voters rejected this and other short-term rental restrictions just last year."
As it turns out, Lee won't have to consider anything, though! On Tuesday the full Board of Supes unanimously passed the legislation, 10-0. It was "a somewhat surprising move," 48 Hills reported, with even "Scott Wiener - who has always sided with Airbnb in the past" voting in favor after asking for an amendment calling for SF's Office of Short-Term Rental Enforcement to make it easier for hosts to register. (Supe Mark Farrell recused himself from the vote, the Ex reports, "citing business interests he has with the short-term rental industry.")
With 10 votes in favor of the legislation, it has a veto-proof majority, and can't be blocked by Lee. But that didn't stop his spokesperson from crankily telling SFist that "The mayor continues to be concerned about how this new law will stand up to a legal challenge, however, he supports streamlining the process to make it easier for hosts to register and comply with the law."
According to Airbnb's own records, in early April there were 9,500 listings for short-term rentals in SF, listed by 7,046 unique hosts. At that same time, there were only 1,647 registration applications from all users of short-term rental platforms, making as many as 75 percent of Airbnb's SF listings in violation of this new law.
According to a SF Budget Analyst's report from May of last year, between 925 and 1,960 of SF's residential units are kept vacant by owners who instead rent them out full time on Airbnb. In fact, SocketSite reports, "an estimated 26.1 percent of listings for “un-hosted” stays appear to have been rented for more than 90 nights a year, with a median of 180 nights, which violates the City’s 90-night cap."
So you can see why Airbnb might be freaking out, as this law means fines that SocketSite believes "could theoretically total over $5 million a day." Given that Business Insider reported in December that the company isn't "yet turning a profit," any move to cut their business must be very upsetting for them!
And upset they were in a statement sent following the vote:
An estimated 1,200 San Franciscans avoided foreclosure or eviction by hosting on Airbnb, and this legally-questionable proposal puts their housing at risk without offering any real solutions to fix the complex process.
The board acknowledged that the registration system is broken and, in order to help people to be able to stay in their homes, The City needs to fix it. We hope the board will act to fix this broken registration system, and we are considering all options to stand up for our community and keep fighting for real reform.
The office of SF's City Attorney, however, doesn't seem worried about these "options." Despite a letter sent to the city by tech lobbying group CALinnovates that claims that the law would violate the Communications Decency Act, which seeks to protect platforms that host online content, Deputy City Attorney Jon Givner says that “This ordinance does not regulate the content of any posted information on the website of a hosting platform."
"Rather, it regulates the business activities of the hosting platforms. It extends the type of information they must collect in order to engage in booking services and doesn’t regulate the content of the website.”
According to the Ex, the new law requires "short-term rental websites to post registration numbers on listings or email the number and name of the host to the Office of Short-Term Rentals." If the agents with the city see rentals that appear not to be registered on platforms like Airbnb, "the listing services would be required to respond with details about those properties within one business day or face fines," the Chron reports, with the fine revenue going toward SF's affordable housing efforts. The new law also requires that the Office of Short-Term Rentals provide quarterly reports on its enforcement.
The legislation will take effect, reports the Ex, in about 30 days, so if you're an as-yet unregistered hoist, better get cracking.