SF’s Airbnb Law Approved, Short-Term Rentals LegalizedOctober 7, 2014
Supervisor Chiu’s proposed ordinance to legalize, but limit, short-term rentals in San Francisco, a so-called “Airbnb law,” has been approved by San Francisco’s Board of Supervisors by a vote of 7-4 with Supervisors Avalos, Campos, Mar and Yee opposing.
The new law will allow a permanent resident of San Francisco to rent out their primary residence on a short-term basis for a total of up to 90 days a year. A proposed amendment which would have also limited “hosted rentals,” in which the resident is present during the stay, to 90 days a year failed to be approved.
The new law is currently slated to become operative on February 1, 2015.
While the ordinance requires hosts to register their units with the city, the registry will not be made available to the public, a central requirement of the proposed ballot measure to further restrict short-term rentals in San Francisco to areas zoned for commercial uses, an initiative for which the qualifying signatures have already been gathered and remains waiting in the wings.
Comments from Plugged-In Readers
What about if your lease says no subletting? I want to make sure my tenants can’t use AirBNB!
MarinaBoy, the new law does not affect lease restrictions against subletting. It also contains a requirement that tenants must notify landlords before they lease their unit. If your lease agreement prohibits subletting, then as a landlord, you still have the right to enforce the restriction.
Can landlords update their contracts if not currently in lease?
Thank you Chris that is good to know!
Chris, RU sure they incl. the proactive “tenant must notify LL” before using airbnb? I thought that wasn’t in the original wording. Was it added later to the text?
Put in cameras. That will stop them.
yeah that sounds legal… 😉
It is! It is! In common areas, and you let them know in advance. Kosher move.
What are the deets on the ballot initiative?
Ron Conway’s investments in SF politics continue to bear fruit.
Every neighborhood, street, block in San Francisco now potentially has a hotel, or two or more in it. Is this what was intended when our zoning laws were enacted?
Welcome to motel 6 on every block
That is the problem in a nutshell. Zoning is the holy grail supposedly for any changes in our residential neighborhood. The Residential Design Guidelines, the Prop M Eight Priority Policies, they mean nothing and they are rarely if ever applied as they should be. Just the zoning. And now that is out the window. with this new law that makes legal something that should not be legal.
now, i will have to resort to scare tactics to keep my neighbor from airBnb’ing.
Yep. There is an ABNB listing in Noe where one of the photos of the bathroom shows a bath mat that says, “The Noe Inn”. I think you now have a hotel in your neighborhood. Not what you contemplated, likely.
There simply isn’t the demand to support this contention. Many neighborhoods simply don’t carry the interest to tourists or business travelers. Yes, certain neighborhoods are more popular than others, but this law will benefit those neighborhoods by restricting the number of nights that full units can be shared.
I think you are wrong. My neighbor rents her house occasionally on AirBNB when she is traveling or needs some money. We live in the Outer Mission – definitely not a hotspot for tourists! – but she has no trouble finding guests staying anywhere from 4 days to 2 weeks. I think this has the potential to affect many neighborhoods, as lots of travelers are looking for cheaper ways to enjoy SF than the overpriced down-town hotels.
The fact that your neighbor manages to occasionally rent her home does not negate the fact that the rentals with the most number of booked nights are in areas where the majority of tourists and business travelers want to be. Some tourists do seek out other neighborhoods, for example, to be near relatives that live in these neighborhoods or to be close to a place of business or other destination (like a hospital or school). Overall, the total demand from visitors to San Francisco for temporary rental space is limited by the number of planes, cars, trains and buses that can deliver these people to the city and by the number of people willing to open their homes or vacate their residence to these visitors.
heaven forbid! These horrible tourists are coming to our city and spending their money all over the place! think of the children!
airbnb has already been around for years at this point and people are already using it. I don’t see this law changing anything about this practice other than removing the risk that a tenant can be evicted for doing this. If anything, having a limit on days the apartment can be subleased should reduce the amount of airbnb use, right?
A tenant CANNOT airbnb without the express permission of their landlord. Do this and it’s a great way to get your ass evicted.
Yep. If you are a protected tenant and you get caught on AirBnB, chances are you’ll get no support from the Tenants Union either.
I own a market rate rental, which we have been consistently raising rents about 12% per year for the last 5 years and about 6% per year from 2003 to 2008. the 2bdr unit has gone from $1800 in 2003 to $4600 in 2014. under rent control, it would’ve gone to $2090. For a similar unit as mine, the landlord would now be subsidizing the tenant by 55%.
in this situation I would prefer to airbnb the unit and avoid tenants. I think we could get about $360/night. with just 100 nights per year (im sure they wont enforce a little overage), we could get $36K/yr or $3K/mo on average. i know this is a crude measure and there are other, but think this will lead to more empty units. Of course, its the fault of rent control not being means tested and therefore too many people getting subsidies. If the city wanted to avoid this situation, im surprised they didnt limit it at 60 nights/year, which would change the economics significantly and i wouldnt airBnB under that situation. On top of that, you do have the situation that is very annoying if you are a homeowner and your next door neighbor has a slew of people coming in and out for 90 nights /year, without being in a commercially zoned space for hotels.
Overral, on all fronts, I think this is a terrible law, but not surprised at the shortsightedness of our little provincial govt.
Spencer, congrats on making that unit work well as a rental. I’m curious, have most of your tenants accepted a 12% annual increase, or did most move out after one year, and you rented to new tenants? Just curious what kind of turnover you have had there.
yes, ive had these tenants for 4 years, and the previous ones for 7. they have grumbled a little but its market rate. i think they have looked around and not found a better value. Its a nice place, well maintained.
Jill = Spencer? Is that you?
Good work with the tenants then. Non RC rental in SF is like printing money!
Unfortunately for you, your rent-control apartment scheme is covered by this law. You must have occupied the unit for the prior year — conversions from full time rentals are not allowed. (I won’t address whether or not this will be enforced).
So, after you’ve evicted your prior rent control tenants and lived in the unit for a year, you’ll be able to share your home on a part time basis. But, your ability to garner $360 per night for 100 nights a year is questionable. When you include taxes and AirBnB fees, the effective rate gets quite high, no matter how nice your 2BR place may be. Plus, you’ll have to furnish your apartment to a decent standard, clean the unit, and and provide clean linens to be competitive at that rate to standard hotels in your area. 90 days is not enough to generate an adequate return to a landlord in most areas of the city, after the upfront conversion costs.
im not talking about evicting. im talking about buying them out under the table.
It still won’t make economic sense at 90 days to buy out a market rate tenant. If you could buy out a rent-control tenant, you are better off renting to a market rent tenant or Corporate rental rather than a 25% occupancy AirBnB part time rental.
Nothing prevents you from doing 25% short term and 75% longer term
@ San FronziScheme No, it’s covered by the regulation. It must be owner occupied the remaining 75%
also, i think airbnb should have to enforce the 90 day rule because we all know the city govt wont do it.
That wouldn’t make good business sense for them. It’s like asking to get 70% of your paycheck iso 100%.
of course, it wouldnt make business sense. but , the city govt could try to madate it as a condition of passing a law that makes their business legit (because it wasnt before)
does anyone know if single family homes and condos exempt from these restrictions still?
I’m with Oscar, what about single family homes? Does anyone know?
I think the litmus test is if you live there and rent out a room/share, the no limits. If you rent it vacant, than 90 days. SFH or condo or apartment doesn’t matter. But don’t quote me on that.
As is typically the case, this legislation was drafted by morons and is a wordy, vague mess. Best as I can interpret it, it applies to any “Residential Unit” which the ordinance defines as follows:
“Residential Unit. Room or rooms, including a condominium or a room or dwelling unit that forms part of a tenancy-in-common arrangement, in any building, or portion thereof, which is designed, built, rented, leased, let or hired out to be occupied for Residential Use as defined in the San Francisco Housing Code.”
Clear as mud, right?
So one could argue it is broad and includes a “room or rooms . . . in any building” for residential use. Which would include single family homes. But if that were the case, then there would be no need to include the phrase “including a condominium or a room or dwelling unit that forms part of a tenancy-in-common arrangement,” so arguably the ordinance applies only to condos and TICs (or rooms in one of those) and excludes single family homes.
Generally, statutes are interpreted in favor of one accused of violating it (the “rule of lenity”). So if you ignore this new law and AirBNB a single family home to your heart’s content without restrictions and without registering anything, I’d say you should be okay should the city take you to court.
Really disappointed that:
– there was no limit put on the hosted rental. That makes no sense to me. Need to limit that.
– there won’t be the ability to see the listings publically. This is crazy. I want to know if my neighbor is trying to run a hotel out of one of their spare rooms. If you are a home or condo buyer in SF, wouldn’t you want to know if the $1M you are about to put down on a unit is next door to that type of business?
You should be able to view the registry. Here is what it says on that:
“The Registry shall be available for public review to the extent required by law. except that to the extent permitted by law. the Department shall redact any Permanent Resident names from the records available for public review.”
So it sounds they intend only to redact peoples’ names, not addresses or anything else, and to only do that much “to the extent permitted by law.” The “law” is very strict about permitting public review of government records, and it is the rare circumstance that something can be withheld.
OK, I don’t need names, just the address, so that would suffice for me.
On my first point about the hosted rental part…I really don’t like that there’s no limit. I think that hurts renters (ie, instead of renting out a spare room to a full time renter, it’ll just be put onto Airbnb), and it hurts people nearby who have to live next to this. 90 days / year would be one thing. All year long is quite another.
This does make it interesting too: if I am a landlord and I have a 2 bedroom unit with just 1 person renting it currently (as the other person moved out), I would be highly incentivized to allow the 1 remaining person to rent out that spare room full time on AirBnB all year (so long as we each got a cut) vs. having that 1 renter find another full time SF renter. This will decrease the rooms available to rent in SF…and thus increase rents.
After this law passes, we should track (on Craigslist / housing / rooms & shares) on a monthly basis to see if the listings go down.
As an SF landlord I have mixed feeling on this, but still think it benefits me. I agree that living next to an airbnb place would kinda suck. What I really think is missing from this legislation is a clear mechanism for neighbors to complain. And if the host can’t remedy the situation, then the city takes away their right to airbnb. That would help reduce egregious cases of bad guests, etc.
The reason I’m pro this is two fold. One, the sharing economy thing as a whole is generally a good idea, and we should all try to embrace it, inc. car-taxi-share-thing, etc. Two, I like other landlords airbnbing their units, as there is less rentals available, making my job even easier and my future rents even higher. Why have all those airbnb LL’s placing their units in the rental pool. Less competition for moí? Check!
With fleet week and the Nike Marathon these next two weekends we are currently sitting at 98% occupancy rates at our hotels. Should we discourage tourism? Put up blockades at SFO? Pass out tents at baggage claim?
c’mon – I find this a very poor comment (and my knee-jerk reaction is that you must be an Airbnb lobbyist type). You should know from reading up here that folks are pretty interested overall in allowing some sort of house-sharing to work (whether that be Airbnb, VRBO, etc.). What we are trying to discuss is a bit more of how to make it work, but also allow for what is good for long term renters (and landlords) of SF.
Your comment makes folks want to knee-jerk the other way and vote for super-strict restrictions.
I’ve only read the article so pardon me if this has been addressed by the law, but what’s to stop a tenant from staying beyond 90 days? Let’s say a savvy SF resident pretends to be a transient and rents a rent-controlled unit with a short-term lease. After 90 days the tenant says, “I’ll keep paying you rent and I’ll keep living here until the day I die!” Can a landlord evict without just cause (without invoking the Ellis or OMI)?
If they rent for more than 30 days, they have rent control protection. BUT, usually the daily or weekly rate is very high, not making it a good value, as opposed to just renting a room long term and paying proportional rent.
Yes, that may be true. However, what do you do if they’ve been there over 30 days and registered vote at the new address (establishing residency) and then STOP paying rent? It’ll take you at least three months to get them out.
What prevents hosts to do 89 days of short term and then offer the place for 30+ days for the remaining 256 days of the year?
Nada. Business as usual
I think you misunderstand what air bnb is. It’s for tourism. The 90 day cap is for people not to rent their unit out (in which they are not living) for greater than 90 days in a year. Most actual stays are transient in nature: 4-5 days. And no one rents out (typically) for more than 29 days which does not create a tenancy situation.
They are talking / asking about this type of scenario: http://www.sfgate.com/realestate/article/Airbnb-squatters-have-left-the-building-5706884.php
This is simply not true.
My business model is 30+ days airbnb. Since guests are paying 20-30% over the regular rental rate, I am almost certain no-one will ever ask for a regular tenancy. Who would want to overpay for rent?
OK, there’s the occasional outlier: someone who cannot rent because of bad credit or other, but who somehow has the 5500 to pay for a 2BR long term. I am not losing ANY sleep on this. Heck, I’d welcome this person to stay as long as he wants. Sucker!!!
shhhimsleeping, how long a landlord meant to rent out the unit is beside the point; the point is that there is now this arbitrary 90-day limit that the landlord has to abide but it is possible, through no fault of the landlord, that the short-term rental extends beyond 90 days. I think a better way to phrase it is: If it is the tenant, not the landlord, who decides to break the 90-day limit. What then? Shouldn’t there be a way to remove them legally without invoking Ellis/OMI, etc?
Pretty good point. So if you have Airbnb’ed your place for 89 days, then a new Airbnb renter says he wants to rent for one night but stays on a couple longer, you are technically in criminal violation of the ordinance and face jail time. And you face eviction if you are a renting tenant subletting via Airbnb. Yeah, you probably wouldn’t be prosecuted, but the point is valid. This is a silly law. Better that it was just flat-out illegal. I’m all for the “limit to commercially-zoned” initiative.
On a side not, no Airbnb’er who is also a tenant is going to get the half million insurance coverage. So landlords will still be able to evict.
New law is a joke, and best thing to ever happen to Airbnb’s world clout and biz. model. For my neighborhood it is beginning of the end. Since houses all around me are now motels, I really have little choice but to go with the flow. Thus, I will keep a room in the back, and rent my house out 365 days a year to strangers. Weirdest dang thing I could ever imagine. Only in SF.
Suddenly illegal in-law apartments are very valuable. If I buy a nice house with a separate apartment, then I could live in the apartment and rent out the house 365 days – It’s all the same address and I’m living there full time. I would think that I could not only live for free but also make a very nice profit, after all costs.
mas…I don’t think you actually understand the model of airbnb. it doesn’t make sense to rent and then just stay longer because it would be too expensive. If one were looking to abuse rental laws airbnb would be the last place to go. Guys? It’s in 160 countries. There are tens of thousands of people staying in homes every night all over the world. I hate to say it: but San Francisco is just not worthy of an exception the rest of the world is embracing. We are very special here but we are still just another city. Get over it. The spaces being offered for vacation stays more often than not were never meant to be rentals to begin with.
Mr. AirBNB public relations person, er, I mean, shhhimsleeping – yes, SF is different from most places because (a) we have a far tighter rental market than just about anywhere else, and (b) short-term rentals are expressly illegal by statute.
“The spaces being offered for vacation stays more often than not were never meant to be rentals to begin with.” And what the hell does that mean? Yo should talk to your AirBNB corporate superiors before you spout such nonsense. The company has some decent arguments, and I suspect your bosses would not want you to make such ridiculous, bad faith assertions.
new to SF neighborhood. I am confused about this new law. If I have a spare bedroom in my house that I live in, can I rent out the spare bedroom (as long as it’s under 90 days) on AirBnB? Thanks!
NY AG report (namelink) claims many Airbnb NYC rentals are illegal. The key findings are summarized in the first few pages. Some I hadn’t heard of before:
– some listings have been booked more than 365 nights/year and may be multi-unit illegal hotels/hostels and not just single rental units
– 40% of revenue from just the Lower East Side/Chinatown, Chelsea/Hell’s Kitchen, and Greenwich Village/SoHo; compared to less than 3% of revenue from all of Queens, Staten Island, and the Bronx
from the WSJ coverage:
“A long-awaited report from the New York attorney general concluded that 72% of the reservations made on Airbnb over the past several years violated New York law, findings that could complicate the home-sharing company’s operations in one of its most important markets.
The report also said that certain hosts were using Airbnb to operate multimillion-dollar businesses. While only 6% of hosts ran large-scale operations on Airbnb, that group generated 36% of all rental transactions and collected 37% of total revenue, about $168 million, after the company’s cut.
One user had made $6.8 million in less than five years from Airbnb listings, according to the report released Thursday. New York law prohibits renting out apartments for fewer than 30 days unless one of the occupants is also there.”
Gothamist has some of the better graphics, but the report itself is an easy read.
UPDATE: Mayor Lee Signs San Francisco’s Airbnb Legislation Into Law.
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