New Airbnb Legislation
Could Transform Character of San Francisco
By: Andrew Noerr
After
years of debate and protest in San Francisco, the city has finally acted upon
the Airbnb crisis. Mayor Ed Lee on Monday signed a new law that makes Airbnb legal
in San Francisco after the Board of Supervisors voted and approved of it by a tally of 7-4. It had
technically been an illegal hotel business since it was first established in
2008.
As
noted by Patrick Hoge of the San Francisco Business Times, this comes at the
heels of vigorous debate that had occurred between members of the Board of
Supervisors in San Francisco about whether to make Airbnb legal in a city that
is suffering from an immense housing crisis. The San Francisco-based company serves as a middleman, allowing property owners, tenants, and landlords to rent out their space to anyone from all over the world. They would post
the info about potential vacancies on the Airbnb website, and then people seeking
to temporarily stay in the city can rent out rooms or even entire homes for whatever price
is demanded by the person allowing the space to be rented.
However,
this new legislation has not resolved the controversy that has surrounded this
issue in San Francisco. Tim Redmond of 48hills.com has noted numerous times
that a combination of landlord groups, tenant protection activists, and hotel
workers have all opposed the Airbnb legislation due to the potential impact
that the new legislation could have on the housing crisis in San Francisco, the
ability of the city to collect taxes from Airbnb, and the concept of community
that is lost when rooms or apartments are rented out by tourists instead of
being occupied by long-term residents.
Mara
Math, a counselor at the San Francisco Tenants Union, said, “I’m disappointed
about the legislation. It does not address the fundamental problems of Airbnb.
It didn’t even include the proposed amendments that we wanted.”
There
were numerous amendments that were proposed to the legislation. One would be that all rooms on Airbnb could only
be rented out for 90 days per year. Another proposed amendment was that Airbnb
would only become legal if they paid their back taxes first, as they owe
approximately $25 million. Those taxes would be the money that they owe to San
Francisco that they haven’t paid since the company was first established in
2008.
Ultimately, these
amendments were not passed, although the Board of Supervisors did agree to some
other suggested amendments. One is that neighborhood groups, tenants, and non-profit organizations are allowed to sue Airbnb if
they are not following the law. Examples of this include someone on Airbnb
renting out an entire home for less than 30 days, as that is still forbidden in
San Francisco, or if someone rents out a room in a building that has been
subject to Ellis Act evictions in the past.
Still, the failed
attempt to limit rentals to 90 days per year has alarmed many people who are
concerned about the health of the housing market in San Francisco. If one looks
at the Airbnb website and checks how expensive it is to rent a room in the
city, one will notice that prices range anywhere from $70-$199 per night,
although they are usually on the more expensive side. Since there are no limits
to how long a room can be rented, landlords or others could simply allow a room
to be rented out all year by numerous customers through Airbnb instead of
making the room available to residents of San Francisco.
“The San Francisco
Tenants Union doesn’t like Airbnb because landlords have been evicting tenants
so that their property can turn into Airbnb hotels,” Math said.
Indeed, it can be more
lucrative for landlords to rent out rooms through Airbnb to tourists than to
rent them out to long-term tenants. Through Airbnb, for example, if a
private room is posted for $150 per night, the landlord could make $4,500 per
month off that room. In comparison, if one looks at Craigslist and checks how
much a private room costs for long-term renting, prices range from $700-$2,000
per month. This, according to Math, has instilled fear into many people about
the motives of landlords for evicting tenants in San Francisco.
Another hot issue with
the Airbnb legislation is the desire from many people for the company to pay
its back taxes. According to Mai-Cutler, it owes around $25 million in taxes in
San Francisco, as it should have been paying taxes that commercial hotels must
pay annually. The amendment that would have forced Airbnb to pay those taxes
was denied though, as it was ambiguous as to how the company would pay them and
how long it would take. This issue has stirred its own controversy among many
people in San Francisco.
“(San Francisco residents)
inherit the financial burden from Airbnb not paying their taxes,” Math said. “That
money would go into the General Fund to benefit the residents of San Francisco.
Instead, we’ll get asked to sign on for bond measures for things such as
libraries or roads that should have already been funded by those taxes.”
One last protest that people have brought up is that the concept of having housemates in one’s home will soon cease to exist. Redmond of 48hills.com said that more homes could become Airbnb hotels and be filled with tourists looking to stay on a short-term basis, and the community feeling that is prevalent among long-term residents in San Francisco would diminish.
One last protest that people have brought up is that the concept of having housemates in one’s home will soon cease to exist. Redmond of 48hills.com said that more homes could become Airbnb hotels and be filled with tourists looking to stay on a short-term basis, and the community feeling that is prevalent among long-term residents in San Francisco would diminish.
“I enjoy my
housemates,” said Victor Gavallos, a senior undergraduate at USF who lives in the
Richmond District. “Having housemates means that I always have people that I am
close to at home. We have our own micro-community that is supportive, and I can
turn to them when I need it.”
After
much debate, the Airbnb legislation was still passed by Mayor Ed Lee, and
according to the CBS San Francisco report, it will be in effect starting on
February 1, 2015. Other rules were included in the legislation such as people
who allow their rooms to be rented out must be San Francisco residents, they
must live in the unit for at least nine months per year, they must register
with the city first, have liability insurance, and pay a 14% hotel tax in San
Francisco. Even with these rules, some San Franciscans have lamented that the
city has lost some of its character as a result of the new legislation.
“It’s
bad for community,” Math said. “The San Francisco Tenants Union is here to
protect the interests of tenants, and we know that this is bad for what makes
San Francisco a great city.”