Responding to an executive directive from Mayor Lee last month, a working group co-chaired by the directors of San Francisco’s Planning Department and Department of Building Inspection has drafted a list of recommendations to accelerate the production of new housing in San Francisco and protect the city’s existing housing stock.
The working group’s thirty-six recommendations are a mix of short-term, mid-term, and long-term ideas and include the priority processing for projects with at least 20% on-site affordable housing; encouraging maximum permitted density for development sites; requiring property owners to justify the removal, rather than legalization, of existing illegal units in the city; lifting the 375 unit cap on the production of micro-units; and building code amendments to facilitate building up to seven stories in height.
With the estimated number of existing dwelling units in the city currently used for short-term occupancy versus their legal use as conventional, permanent housing running as high as 5,000 units thanks to “sharing” sites such as airbnb, another recommendation of the working group is to crackdown on the enforcement of illegally renting an apartment for less than 30 days in San Francisco.
While a crackdown on illegal short-term rentals could quickly move the needle with respect to available housing supply and affordability, it would likely put the Mayor at odds with airbnb, a site that he has championed. It will be interesting to see which side he favors.
The draft memo which details all of the working group’s recommendations to date: Executive Directive 13-01 Recommendations.
A crackdown will also anger both renters and property owners, since both are using airbnb. Definitely a tricky situation.
When you are a city with geographical constraints and regulatory framework like San Francisco, even nominal housing shortage generates pressure and intervention from multiple directions. This has been the historical problem of San Francisco housing policies. Whereas the regulatory pressures on housing providers tend to magnify it until they destabilize it in excess of the significance of the original issues.
Only solution that I can come up with in terms of the Airbnb/VRBO thing is: limit the total number of days you can rent out a unit per year and make that number fairly small (10-15 nights/yr).
Pro’s:
+ people who just depart their units for a few weeks a year can use airbnb/vrbo to provide some temp housing.
+ restricts people from using AirBNB/VRBO too much (the $ from renting unit normally > than small # of nights on AirBnB/VRBO)
+ appeases hotel industry a bit
+ appeases residents/neighbors of SF that don’t like AirBnb/VRBO
+ appeases AirBnb/VRBO (as compared to an out-n-out ban)
+ Mayor Lee appears to give something to both Airbnb/VRBO and also to longer term housing needs
As for how you ‘police’ that..haven’t thought that far. I’d rather like something where:
– city-owned website that each owner (if they want to rent out their place on Airbnb/VRBO) has to register. Very stiff fines if you don’t.
– anyone (ie, neighbors questioning illegal rentals) can look up a unit by address/unit to see if they’re registered and number of nights thus far.
– AirBnB/VRBO must cross-register the ID number from that website/unit in their postings…ie, the city uses that method to then make AirBnB/VRBO show their compliance.
Or something like this…
get rid of airbnb in the city altogether. these short term rentals are not cool in a shared building. nice to know your neighbors. this is what hotels are for.
@moto mayhem – 100% agree with how Airbnb/VRBO (full time) ruins the concept of a ‘neighbor’. That’s my #1 pet peeve. Had a unit next to us do it for 6-months and it was just awful after awhile.
But I would happily allow – enjoy even – if it was just a limited # of nights / year.
One small bonus: a landlord of a unit may then tell their renter ‘go for it but give me X% of the take’ to their renters if those renters wanted to airbnb/vrbo their units for, say, 7 nights a year.
The document produced is to grease the wheels of the planning and building department to make it even easier for “non-profits” types etc. to build affordable housing. Once again this will not serve the middle class buyer or market rate buyer, in fact it’s downright discriminatory. During the downturn the only units being produced because the were still funded were low income subsidized housing.
We need to simplify the approval process for all housing equally and get well designed projects that meet the zoning criteria through this byzantine process much quicker while eliminating many of the overreaching appeals available to anyone that can derail a project for years….
Ridiculous previous posts about airbnb. The obvious frustration from people who are reassured with paperwork, permits and other overreaching kafkaisms.
I am not a libertarian by far, and I believe in the power of government to help build a fair environment, but:
– If the hotel industry is afraid of competition, it should evolve instead of resisting change.
– If neighbors are afraid of seeing too many strangers (Who said housing was for community building? Do we have to be nice and neighborly by decree?) then they should revise their HOA agreement. If they are renters, they should complain to their landlord. If the landlord does not agree, then the tenant can always punish the landlord by moving out (though this is SF and most tenants would punish themselves out of their sweet subsidized housing, lol)
– If the rent control lobby is afraid of seeing units going towards airbnb, then they should have a deep look at why this is such a lucrative business:
Maybe rent control is making market rents more expensive. Maybe rent control is scaring away some landlords from doing a regular lease. Maybe rent control is an obsolete artifact of a fantasy class warfare waged by people who should have moved to an utopian land.
Disclaimer: I am making a living partially off airbnb and other furnished rentals, on 1+month stays and therefore not threatened by this recommendation. I’ll rent on the open market when rent control is repealed. For now, rent control tenants are the enemy of the landlord because of the unjustified burden put solely on landlords.
[end rant]
I’ll add to my rant that if a “community” wants to preserve itself, it should encourage home-ownership. But since these “community advocates” also have a undeclared but deeply seated belief that “ownership is theft”, they are faced with their own contradictions and are punishing everyone with their archaic and self-serving decisions.
AirBnB/VRBO have absolutely nothing to do with the cost/production of housing here in SF. don’t kid yourself.
It’s all about supply/demand, desirability, lack of more land, cost of construction/entitlements, delays, Nimbys, permit wackiness at the DBI and Planning.
We will NEVER get cheaper. Real estate is an investment. It’s not a handout. If you can’t afford to live here, then try somewhere else that you can afford.
Home ownership is one of the best ways to build wealth, and property owners are also entitled to a ROI.
Yes, I’m back. Stay tuned for more.
“Ask the Planning Commission to adopt a policy that encourages developers to maximize their permitted density when constructing major alterations or new construction projects”
It’s not *permitted* density that we need to worry about, it’s that we need to increase the allowable density and height limits in select corridors and locations.
Any real change will come from this — the rest is politic and going through the motions; nothing will change with these mushy recommendations.
Increase minimum height to 70′ on all commercial corridors and transit districts.
Don’t allow any new multiunit buildings in all of SF less than 7 floors
Agree 100% with Invented. Permitted density is the whole ballgame. If the city speeds up the permitting process, cuts out the NIMBY’s, etc., but does nothing about permitted density, all the city will do (by lowering the cost of building) is increase what developers will pay for land. This might have some marginal effect on the number of landowners who are ready to sell to a developer, but it’s hard to imagine that the payoff would be nearly so great as increasing the number of allowable units per parcel–which will raise the price of land (increasing sales to developers) *and* the number of units built on each parcel.
Oh good, micro-units. That will ensure the city (or actually just SoMA) is completely crammed full of the kind of people who can live in a tiny closet. I guess they city really doesn’t want diversity. If they did, they would require at least _some_ housing for families. I dunno, maybe one lousy 3-bedroom apartment per hundred shoeboxes?
Increase density!
….except on my block….
Can we also get priority PPA processing for projects with minimum 20% affordable units? 2 months + 18 months CEQA process is TOO long. How about 1 month PPA process!
An enclave for the rich is no different than a ghetto for the poor. Once you become isolationist for whatever socio-economic reason you lose all sense of the real world. Might as well put a gate around the city to ward off the middle class who will be priced out.
I’ve said it before, and I’ll say it again: blame skyrocketing rents on the rent control industrial complex. Too many people (including many who don’t need the subsidy) hoard their unit because it’s under current market rent. Take the freebie away and there’ll be less incentive to hoard units.
“Might as well put a gate around the city to ward off the middle class who will be priced out.”
Although not cheap by any means I think at least 1/3 of San Francisco is still somewhat affordable to the biggest bellyaches like me. It is just a choice that I don’t want to live in Portola or Crocker Amazon or in my case the Sunset, Miraloma Park etc
I do think we have a totally unbalanced mix of SFHs in these areas though. The market is just screaming for way more multi-family housing and much less SFHs. SF is structured like self-contained medium sized city which is no longer reality
Any mention of schools, transit, etc.? You know, the things that might actually support the density?
Afterall, I think the SFMTA is beginning to implement the TEP; in a couple more years we’ll be caught up to the needs of 2007.
The Planning Department’s recommendation should have been simply one bullet point:
Close down the ridiculous, addled, numbskull, politicized, churlish, useless San Francisco Planning Department.
@lol, i actually find your comments a bit ridiculous.
Not sure what you mean by saying the hotel industry should just ‘evolve’? that just sounds silly. What is an example of what they should do? Not pay the taxes that they have to pay but airbnb’ers/vrbo don’t really? oh, maybe kick out the union workers? oh, maybe they should buy up an apartment building next to yours and then just instantly turn it into a hotel..that’d go over well, right!?
Your example on the HOA stuff is fine, but it falls apart if you’re not in an HOA…ie, it’s the neighbor to your left and to your right who suddenly change their place into a weekly or nightly rental place. That’s why there’s zoning laws. Don’t even go there with a ‘there shouldn’t be those laws’ as then I’ll just counter and say that I hope your neighbors setup liquor stores in their units right next to yours…
Rent control: now that, I’m with you. I think getting rid of that could help but frankly that is a massive topic / no way I’m touching that.
lol posted . Maybe rent control is making market rents more expensive. Maybe rent control is scaring away some landlords from doing a regular lease. Maybe rent control is an obsolete artifact of a fantasy class warfare waged by people who should have moved to an utopian land.
lol then wy do landlords keep buying rent controlled buildings. All buildings built after
1979 are NOT rent controlled .
Go buy one and stop your rant
Go buy one and stop your rant.
DanRH,
Yes the hotel industry has to evolve, just like the movie, book and music business had to evolve in the previous tech revolution. Was it painful? Yes. Have we lost something in the process? Yes. Could it be avoided? I don’t think so. It was either evolution/adaptation or crippling mass piracy.
Ask the cultural control freaks in France what is happening right now! Netflix is coming to France, where illegal downloading is still massive and not bringing one cent of revenue. Netflix and Hulu were the response in the US and it worked. In France, there’s no sizable system that has curbed piracy yet. Netflix could be the answer but they’re talking about imposing a 3-year (yes THREE) wait for a movie to be allowed to be streamed to the French Netflix. This will not stop piracy.
In short, piracy was illegal, but its spread pushed the industry as well as outsiders to come up with profitable ideas.
And seriously, who are we trying to protect there? Mostly formula hotel chains who have overbuilt in a pure formula business fashion. Their hotels are impersonal, standardized to the extent that once you have passed the front door you do not know if you’re in Milwaukee, Cedar Falls or San Francisco.
Hotel chains still have a future, since I do not think airbnb will ever work for people who need to sleep next to freeways or business parks. There’s a business for predictability, and there’s a business for the personal and diversified experience.
About airbnb at your neighbor, well if something is done illegally, just dial 311. Maybe try and have a chat with the landlord before doing that, it never hurts. Just to be neighborly and all.
markk,
Nice theory: if you do not want rent control, just buy a post-1979 building.
I wish.
I did a quick search for multi-unit buildings built after 1979 in SF: ONE mix-used in the Bayview
Same search pre-1979: SEVENTY EIGHT
The reason: almost all rental buildings built recently are big projects (like the Trinity apartment buildings or NEMA) and the retail buyer has no access to that.
Any other genius idea?
I think his next genius idea will be: “don’t be a landlord!”‘
Next, he will complain about a lack of rentals and extortionate prices for those that exist.
And my next point: why don’t hotels just post rooms on airbnb and cab drivers use Uber? “If you can’t beat ’em …”
Jimmy,
There was an article in the Chronicle this AM about cab drivers and Uber/Lyft…
Some cab drivers are doing both actually.
lol, here’s one for you. I’ll stipulate at the outset that haven’t done due diligence on it, legal wise; maybe the real estate agents and flippers who comment here can see the obvious holes in this one.
First, find a multifamily building in an up-and-coming neighborhood that’s seen better days and needs a serious rehab, but is nominally subject to rent control but has units that could rent for a lot more if it were a post-1979 structure. Acquire it, either by yourself or with some LP’s.
Next, find a contractor or architect or both with serious credentials when it comes to rehabbing and improving existing multifamily properties. Hire them.
Now, go through the approval process and do serious rehabilitation and improvements on the building. You personally will probably get some serious non-pecuniary utility from this because you may get to kick out the existing residents (I don’t know enough about rent control law to know if that’s true) while you’re doing the construction since the units won’t be habitable, regardless of the terms of the existing leases.
Here’s the key: make sure you do enough construction to invoke a tax reassessment. Now you’ve got the equivalent of a new building. You can now lean on Costa-Hawkins and be impervious to rent control. Indeed, the San Francisco Apartment Association was instrumental in drafting this legislation for their vassals in the California State legislature.
Benefits: Because the building isn’t subject to rent control, you can take markk’s advice above.
Drawbacks: You can’t lean on a low, low Prop. 13 tax basis.
That’s all just off the top of my head and probably has one or more holes, but if it works, you’re welcome to that idea, you don’t have to cut me in as an equity partner.
Well the first problem is you can’t just evict people (permanently) for the purpose of renovations. They have the right to return at their old rent. And in the case you describe, it’s unclear how that would be enforced since the new building would presumably be substantially different in configuration from the old one.
So… no, on many levels, I am sure if this was possible people would be doing it all over the city.
If nothing else SF should encourage new construction be built to its fullest based on approved zoning so that the numbers of housing units can be increased more quickly ,
Uh, why would a legitimate hotel pay airbnb’s cut when they have their own websites and can take room bookings from existing third-party booking sites that have much higher traffic than AirBnB’s?
Also, if there is anything like Karma in the world, Airbnb’s quasi-legality frankly wouldn’t be tenable long-term. Brian Chesky is a person who holds highly odious political views and if it wasn’t for Y Combinator teaching him everything he now knows, he’d be out on the street sucking wind through his teeth after failing to make it as a Arnold Schwarzenegger wannabe; why would the hotels he’s trying to run out of business contribute to making him rich?
Cue the tired, but inevitable “Brahma is a hater” comment in 4, 3, 2, 1…
Why do folks want to live in SF? IMO because it is a beautiful low-rise city. Based on the dire stuff recently thrown up along Market St – a transit corridor if ever there was one – the last thing needed is a blanket permitted increase in height to 7 storeys. Truly, the development beast is getting out of hand and if we are not careful will ruin this beautiful place. Keep it low.
^Cool opinion bro. Weird though, it doesn’t match my opinion or most other people that I know that want to live in SF! Perhaps we should use something other than anecdotes to figure this stuff out…
There’s plenty of opportunity to build up along major arterials, transit lines, and commercial corridors without losing the bulk of SFs low rise residential areas. Admire your lovely cake while devouring a slice.
@JB10 – But the thing is that San Francisco is NOT a low-rise city.
Many of the most famous neighborhoods are indeed low-rise districts…the Castro, Haight-Ashbury, the Marina, sure. But let’s look at the reality:
– San Francisco is #5 in the nation for buildings over 35 meters/115 feet
– San Francisco is #5 in the nation for buildings over 100 meters/328 feet
– San Francisco is #6 in the nation for buildings over 150 meters/492 feet
And then you have to factor in city-size. Let’s take LA vs. SF.
Over 150 meters/450 feet:
LA has 25, SF has 21
Over 100 meters/300 feet:
La has 70, SF has 88
Over 35 meters/115 feet (12 stories, give or take):
LA has 659, SF has 417
But LA has 503 square miles and 3.8M people.
SF has approximately 47 square miles and 820,000 people.
So let’s adjust the highrise stat again:
SF has just shy of 9 highrises for every square mile, and 1 highrise for about every 2,000 residents.
LA has about 1 highrise for every square mile, and 1 highrise for every 5,760 residents.
So, realistically, no we aren’t Manhattan. But to say San Francisco is a low-rise city is absolutely misguided. In fact, the data actually shows that it is one of the American cities with the highest concentration and number of high-rise structures.
Sorry, my conversion was way off for the second mention of 100 and 150 meters. The rest of the data still stands.
No one wants to make the marina or outer richmond or noe valley a high rise disctrict, but all of SOMA,mission bay, market st, van ness and geary should be fair game
^I actually think the outer Richmond would be a sweet high rise district, as long we extended BART out there. There’s nothing of architectural merit to save, so a nice neighborhood of back-to-back 40 story towers overlooking the ocean would be sweet.
I kind of agree with anon on that point. Lots of cities have a “second” downtown. Something along the 19th Ave corridor would be great — easy access to 280, shifting traffic away from 101 — and a BART extension. There are already a few tall buildings down there, might as well build on that success and make about 50 more. The whole area needs revitalisation!!
While I feel bad for the 116 Ellis Act tenants evicted during 2013.. I feel even worse for the Pedestrian Deaths and Accidents in 2013 and so far in 2014! Increasing housing density is not going to cure SF’s growing housing problem. The City has been plagued with high housing costs for decades. Increasing density will only increase an already problematic traffic and transportation problems.
The City needs to pause and take a more thoughful approach to the entire growth issue. Let’s not let the political agenda of Mayor Lee result in band-aids which appear to treat symptoms, while creating even greater problems for the future.
“The City needs to pause and take a more thoughful approach to the entire growth issue. ”
All the city planners ever do is pause. its one big pause
Legalize and encourage the in-law units and do away with parking space requirements for new housing. SF government, still it’s own worst enemy.
As an elderly owner of a 3-unit building, I am loosing money on 2 units due to long-term tenants and rent control. Thanks to airbnb short-term rental, I barely stay afloat. I pray for the day when I can do airbnb on all 3 units. I am sure I am not alone. Thousands of other airbnb rentals are due to owners who are so afraid of our all mighty Tenent’s Union and our politicians who need tenant’s votes. Tenants always win in this town. Take my advise, don’t be a landlord. If you are stupid enough to be one, do airbnb. Don’t be stuck with long-term tenants.
Why don’t you just take a second mortgage on the property and buy out your two tenants? Or Ellis Act and convert to TIC and sell. OR, just sell it. To me. For 60% of market price.
Yes, but at the end of the day, you’re still in possession of a million+ dollar asset with a fixed tax liability. I can imagine worst situations. You could be your tenant who’s about to be Ellis’d.
UPDATE: Recommendation To Crackdown On Illegal Rentals Goes Missing.
If you dont want to be in a “regulated” environment you should invest in arizona or florida. your freedom from government is more than compensated for by bad fundamentals. your choice. anyone who invests here knows what they are getting into for 30 years now. thats the way it is.
my direct experience with one high rise condo downtown is that they have a minimum 90 day rentals exactly so this type of hotel type occupancy will not destroy the quality of the building.
owners there clearly believe they have more value preservation with the rules, that with churning renters.
personally i think airbnb is in a grey area that should and eventually will be limited, politics notwithstanding. dont have a good answer for smaller building.
it sounds like a pure downer to be next door to one of these units. it will become a disclosure issue soon for any buyer with intel.
Brahma – Your strategy won’t work because the date used is the 1st date a certificate of occupancy was issued. Rehabbing a residential building does not change that date.
Breaking news: airbnb will start collecting an occupancy tax in San Francisco this summer, per this blog announcement.
I think this applies to short term (less than 30 days) stays, but I could be wrong.
I think this could lead to 2 things:
– hosts passing through some or all of the cost, which will mean more chance for hotels to compete.
– some hosts changing their business models and doing 30+ days stays as I am doing now
In any case, a major development for airbnb in SF.
^ Presumably airbnb will be remitting the list of taxpayers along with the tax?
And renting for less than 30 day still isn’t legal.
So this seems to answer the question of how the city will find out about illegal rentals.
Nice try anon2,
I do not think SF will declare airbnb illegal. If anything cities are caught unprepared for this disruption.
But they are learning, and fast.
France has enacted a law to legalize and regulate short-term rental activities such as airbnb. The old way was something akin to a request for change of use, cumbersome and obsolete. This new law gives airbnb-type rentals a legal framework. Local ordinances can still exist, but nationally they aren considered a legitimate activity.
There’s a lot of resistance to new business models brought up by technology. I was in Paris lately and all cab drivers have only one word on their lips: Uber. A lot of good argument from cab drivers, but can they stop the tide?
Same goes with airbnb. It’s to going anywhere. Better make the best of it, collect some taxes, regulate a little and embrace the possible increase in the flow of tourists this may bring.
I don’t see the point of your post or your snark.
Under 30 day rentals are clearly illegal under the current laws. See the top of this post for details.
Are you saying that SF has agreed to change the law in return for AirBnB collecting the tax? Because I don’t see that anywhere in the blog post you linked to.
anon2,
The Chronicle had an article about that this AM, and they were one among many to report about it. David Chui was involved and some level of regulation is coming.
It might be “illegal” but it’s not enforced. And the reason it’s not enforced is because it’s not a clean-cut issue. If it were truly illegal, why are the cops not posting cease-or-desist notes?
Other news source have other levels of insight. More is coming I am sure.
I have a meeting next week with my SF supervisor.
Can anyone point me to a URL on how many projected units are rental versus condo?