Short-Term Rental Law Amendment Summary

The showdown between two competing pieces of legislation to further regulate ‘airbnb-ing’ in San Francisco is about to commence at City Hall.

Without additional transparency and reporting from the hosting platforms which enable the practice, such as Airbnb, San Francisco will be hard-pressed to ever effectively enforce its short-term rentals law, which is a key difference between the two proposed amendments as outlined above and likely by design.

Regardless of which amendment, if either, is adopted by San Francisco’s Board of Supervisors, the proposed ballot measure which would limit the short-term rental of any residential unit in the city to a maximum of 75 days a year, prohibit an in-law from ever being rented on a short-term basis, and require the City to notify neighbors of all units which are registered as short-term rentals remains on the table as well.

Comments from Plugged-In Readers

  1. Posted by Dan

    The same folks who say that supply doesn’t matter, in opposing new construction, want to stop short term rentals because they say they constrict supply. The logic is flipped faster than a Noe Valley Victorian.

  2. Posted by logankelley

    who cares about the logic of the housing market – no one should claim they understand it in its entirety. the simply fact is that airbnb is enabling people (owners, renters, whoever) to illegally rent their units. they are making money off people risking their homes by breaking rental laws, all with zero accountability. why try and keep airbnb safe? regulate the corporation and defend the underdog – whether the underdog is an evicted renter struggling to find a new home, or a landlord risking their clean record to make an extra buck on short-term rentals.

    • Posted by Toby Snozzwanger

      “No one should claim they understand it in its entirety.”
      Ah yes, that’s the same argument as the GOP climate change deniers who say “I am not a scientist” and use that as an excuse to oppose legislation on CO2 emissions.

      Extreme rent control created this problem, not airbnb. Fix the root cause.

      • Posted by formidable doer of the nasty

        “Extreme rent control created this problem, not airbnb. Fix the root cause.”

        ^^^This!

    • Posted by san FronziScheme

      Systems like airbnb allow a better use of housing units. They also allow people to have more freedom in their lives.

      For instance, the main reason I do airbnb (legally, for 30+ days stays) is because my wife had a career opportunity out of state and we decided to leave SF for a few years.

      What were our other choices?

      – Leave our place empty for 2, 3 or 4 years
      – Rent it out on the open market, which is akin to playing Russian Roulette. Market rents have increased by 25% since we moved out, and any tenant we would have found would have NO incentive to move out. This means doing an OMI, which is basically One-And-Done. After coming back from an OMI, any future rental would be much more restrictive.

      Current renter protection laws are too restrictive. They are there to address housing from an antagonistic point of view. One one side we have the tenant (aka the victim or underdog) and on the other the landlord (aka the capitalist oppressor). The end result is an oppressive system that generates countless unintended (and predictable) consequences.

      Well, there you have it. Renters are now the problem in my eyes because this is the way SF has structured the relationship. It didn’t have to be that way.

      • Posted by RobBob

        I don’t think airbnb insulates you from renter protection laws, one of your “short term” tenants from airbnb can invoke renter protection laws and you would run into the same problems you are trying to avoid.

        • Posted by san FronziScheme

          Yes, you are correct. But the strategy works because my guests who stay 1 to 3 months have no financial interest in validating their stay into a regular lease.

          If market rate is say $4000 and you pay $5500 for a 2-months stay in an airbnb place, would you have ANY interest in perpetuating the $5500 rent? This is the small slice of market opportunity I have found. And my rent has followed the market very closely. Maybe not the silver bullet, but close enough.

        • Posted by SFCitizen

          If I understand the information on this page, and you register with the City and pay the TOT (transient occupancy tax) for those stays then your short term tenants do not get to invoke renter protection laws.

          I’m sure if my interpretation is wrong that the other members reading this will correct me.

          • Posted by san FronziScheme

            We are talking about 30+ days stays. No need to register with the City and no Transient Occupancy Tax.

          • Posted by Amewsed

            That is the sweet spot. 30+ days. Still have to furnish it though.

    • Posted by Ivoryhouse

      Say again? Owners are illegally renting their units and risking their homes? wha?

  3. Posted by Mrs L

    I have a crazy question – what if I take a work assignment overseas for 1 year, and want to recoup some carrying cost of my residence by renting it out? Am I correct in thinking I can’t write a lease that just expires after 1 year, I would need to actually evict my tenant upon my return, right? Because somehow SF is some magical place where a lease isn’t actually a lease, it automatically converts into a month-to-month agreement if no other arrangements are made.

    So now, one alternative, which is to manage it as a short term rental a la airBnB, is being restricted as well, to somewhere between 60-120 days per above legislation.

    Seems like the best alternative is… to just let the unit sit empty. Yeah, we’re not continuing to create policies that lead to more housing crunch. Not at all. Asses.

    • Posted by Alai

      While the most vocal activists may claim to be fighting in the name of the poor, actual policy is driven by money. By people who would never dream of renting out their own homes, even if they leave for a year, but are most concerned with the idea that their neighbors might. They have no sympathies with renters (who are too poor to afford to buy) or with landlords (who make a distasteful business dealing with the aforementioned renters) but would really like to see the whole business eliminated– and what better vehicle than rent control, which turns long-term renters into de facto owners, while strongly discouraging new rentals?

    • Posted by san FronziScheme

      Do monthly and stay legal. The airbnb rent is 20%+ more than market rent which means no guest will have any interest in staying.

    • Posted by JR "Bob" Dobbs

      Depends. Talk to a lawyer.

      If your place is a house or a condo, or post-1978 construction, you likely don’t have to worry about it as it’s outside of rent control. Just write a month to month lease. You can’t “evict” but you could then increase the rent 1000% if they don’t want to move out. If your place is not one of these dwellings, yeah, I’d avoid a standard lease as rent control will apply to it. Corporate rentals or AirBNB would be the way to go.

      • Posted by soccermom

        1000% increase defines constructive eviction doesn’t it?

        • Posted by JR "Bob" Dobbs

          Clever argument, but no judge would buy that in a thousand years. The law gives a landlord of one of these dwelling types the absolute right to raise the rent to whatever you want once the lease term comes to an end, and the tenant can accept it or leave. There is no implied ceiling that turns a legally allowed rent increase into an eviction. Think about it – where would this kick in, with a $10,000 mo. increase? $1000/mo? $1/mo. 1 cent/mo? I’m sure SFTU-type lawyers would make this argument, but it would be rejected with a resounding “denied.”

          Constructive eviction does come into play in other contexts – it wouldn’t work here. If anyone has any evidence of this argument ever succeeding in this context in court, I’d be astonished. But show it to me and I will gladly admit I’m wrong about this.

          Btw, you do still need to give proper notice of a rent increase (60 days, I think).

          • Posted by R

            Less than 10% you can do 30 days I believe. More than 10% is 60 days.

          • Posted by soccermom

            I wasn’t trying to be clever – I thought this was really the case. There was a case I think in Bernal recently where the landlords removed an illegal second unit and made a house “back” into a SFH.

            Then they raised the rent on the leftover tenant by what sounded to frail SF ears like an exorbitant amount. I don’t know if it has been resolved.

            [Editor’s Note: Legislation To Close Eviction ‘Loophole’ Drafted.]

          • Posted by JR "Bob" Dobbs

            I meant your point was clever in the actual, literal sense (smart, creative). Not in the ironic, really-mean-just-the-opposite-sense (well aren’t you clever?).

          • Posted by folderpete

            It may ultimately be tossed out in court. But with Eviction moneys from the taxpayers proliferating, such 1000% increase could be locked up in court for … .

            Something along the lines of a 20-30% increase is plausible and most likely to be effective.

            Eviction controls are the real scourge of rent control – at least for those who occupy their units. I can deal with a bit less money; its much more difficult to deal with problematic tenants. But of course, the paradox is that ‘rent controls’ don’t work without ‘eviction controls’ – at least the way the laws structured. I’d be willing to accept Vacancy control if LL initiated; keeping market-rate rents when the tenant voluntarily (or ‘just-cause’) vacates.

    • Posted by GoBlueInSF

      If you own your place, its either a condo unit (exempt from rent control) or a single family home (exempt from rent control). There’s nothing stopping you from renting it out and then latter moving back. As noted, you can just raise the rent 1,000% and then move back in after the tenant vacates. Its quite cut and dried.

      If you DON’T own your place, then you are a tenant and its not your place to begin with. Moving overseas for a year and renting it out means you are talking about sub-leasing, which more likely than not is not permitted under whatever existing lease you have with your landlord. So why should any of us shed a tear.

      The amount of willful obfuscation on this AirBnB issue is just amazing.

      • Posted by san FronziScheme

        You are oversimplifying. Condos are NOT exempt from rent control if they were built prior to 1979. TICs: same thing actually. If you own a multi-unit building built prior to 1979 and occupy one of the apartments: rent controlled if you rent it out. There are 10s of 1000s of people in SF who own the place they live in and that can be subject to rent control if you choose to rent it out.

        Rent control covers more than 1/2 of all the housing stock in SF, but it is not limited to RENTED places. They can be owner occupied.

        • Posted by JR "Bob" Dobbs

          All condos are exempt from rent control per state law (unless the landlord is the one who converted from non-condo to condo).

          • Posted by san FronziScheme

            Many pre-1979 condos are previous rentals. A lot of 2-Unit TICs who do not have to go through the condo lottery for instance.

          • Posted by anon

            I don’t think the pre ’79 rental matters. I thought that the rule was that condos only become exempt from RC following the first sale of the property following the conversion. There might be some grandfathering with respect to date of original tenancy also.

        • Posted by R

          All condos are exempt from Rent Control, but not Eviction Control. Doesn’t matter when they were built. The only exception I know of is if it’s converted while tenant occupied, then that tenant remains under rent control.

  4. Posted by nopa_sf

    You’re correct. You’ll have to do an OMI when the lease goes month-to-month

    • Posted by san FronziScheme

      Yes, but the issue with OMI is that you can only use it once. IANAL but I think you cannot use it receptively.

      This is precisely why I decided not to put my place on the regular rental market. There were so many “what-ifs” with 95% of the cases ending up in “tough luck, you’re screwed” dead ends.

      Rent control is a taking of property income, taking of property value and taking of freedom of use.

      • Posted by san FronziScheme

        autocorrect mangled my “repeatedly” into “receptively”.

      • Posted by GoBlueInSF

        Is it a condo? Is it a single family home? Then you can easily just jack up your rent to whatever you feel like and watch your tenant quickly move out when they can’t afford to pay the rent. This is not complicated.

        • Posted by san FronziScheme

          there are other cases than these 2 options.

  5. Posted by SFCitizen

    I saw this quote the other day that I think this group would appreciate it. I think it gives some insight in the tenant mentality of the City and please note this is from 1994.

    “I think many of us share the belief that rent for housing is immoral. If people are to own something, then it should be on some kind of limited equity basis. So if you own property, you cannot sell it for any kind of profit. The concept of rent as payment to someone else to make money off of housing is wrong.” Ted Gullicksen August 1994 Haight-Ashbury Free Press

    • Posted by R

      That’s the sentiment.. That we landlords should use our capital, deal with tenants complaining about every little thing, fix leaking sinks at 2am, all out of the goodness of our hearts. Because making a profit is immoral.

      • Posted by san FronziScheme

        +1

      • Posted by GoBlueInSF

        Allow me to bust out the world’s smallest violin.

        • Posted by R

          Nobody’s whining. I’m happy being a landlord. But I’m not going to go through the trouble for free.

        • Posted by san FronziScheme

          This attitude is antagonistic. The tired “don’t complain, you’re a millionaire” is what has been used to justify the obscenely ridiculous rent control system of SF, with a new piece of legislative 2×4 added to the system every month, hoping it will not fall apart under its own weight.

          SF has the most expensive rental market in America. That’s the end result. Yes, it’s partly due to Tech. But Tech’s effects are multiplied by 5 with the insane supply constraint added by rent control.

    • Posted by san FronziScheme

      Well, he was typical of the closet communists that we have to deal with. They have no idea about the notion of risk. They have no idea what it takes to build things. For them housing is a human right and a given like air or water.

      Of course who builds this housing is a concern too low for these very deep intellectuals.

  6. Posted by GoBlueInSF

    The entire AirBnB model – just like the Uber model and most of these “sharing” platforms – is based on regulatory and tax avoidance. “We’re not a hotel company – we just created a on-line place for people to ‘share’ their homes. And set up the payment system. And the rules. And the standards. And rental system. But NOPE, we are NOT a hotel company. Nope. Nada.”

    Almost every city in the country has a zoning code. And almost every one of those zoning codes regulates transient occupancy commercial buildings (that is, hotel, motels, lodging houses, and bed&breakfasts). AirBnB is just a Wall Street play to get around that system with a pretty thin excuse. And thus, very little public sympathy for those whining about how regulating AirBnB is unfair.

    • Posted by JR "Bob" Dobbs

      True. But with Uber/Lyft, I’m a little more sympathetic. The taxi industry is a classic example of regulatory capture, where a regulated monopoly is horribly abused with a resulting disservice to the public – high prices, limited availability, artificially high barriers to entry.

      I don’t see the same types of abuses with zoning/hotel limitations. Those serve a valid purpose, and I don’t see any regulatory capture or unreasonable consumer-unfriendly nonsense there.

      • Posted by san FronziScheme

        Hotels do serve a valid purpose. But they have also had a captive audience for centuries: vacationers or travelers who want/need to visit a place and have to sleep somewhere.

        But this model hasn’t been a monopoly. It you travel around Austria or Germany you’ll find all those “zimmer frei” signs. Airbnb is some sort of expansion of that concept.

    • Posted by san FronziScheme

      You have absolutely no idea what you are talking about.

      airbnb is not designed to “get around zoning codes”, but to facilitate something that has been practiced for a very long time: home-swapping. At least that’s the original rationale.

      If you have ever done home-swapping, you have probably gone through either Craigslist or other more professional websites. You have your house in Napa, and want an apartment in Paris. and you’ll be travelling between July 22nd and August 13. I defy you to get your perfect match using the traditional platform.

      What airbnb does is solve the ages-old barter problem: how do you get 100 people to exchange 500 types of goods while ensuring the best possible outcome: Money!!!

      You rent your place to “someone” and then use that money to rent from “someone else”. You can even stay in 4 places while 3 people will use your place. It’s a great idea.

      I am not addressing the issues of zoning, legality, abuses. There are a lot of valid concerns but that’s also being debated.

      But saying that airbnb was designed to circumvent zoning laws simply ignores the fact that there is a very basic need (optimized home swapping) and that some companies just decided to fulfill it using technology.

      • Posted by anon

        You’re being silly. Every commercial transaction fulfills a need. People need food, shelter and transportation. And all those areas are regulated.

        I agree that taxi’s are a worse mess than hotels. But even hotels exploit regulatory capture to limit competition via zoning. In both cases I think the current markets are over regulated to the detriment of consumers, but the Uber/AirBnb free for all is going too far in the other direction. The whole ‘I get the profits, you get the problems’ dynamic is bound to create problems if left unchecked.

        • Posted by san FronziScheme

          What problems? So far, 2 years of airbnb and I haven’t had any complaints. A neighbor does it since 2011 and no issues.

          The problems you are seeing are an effect of the Disoccupied San Franciscan Syndrom (DSFS) that sees all cyclists as scofflaws, all Googlers as gentrifiers, all new buildings way too high and all airbnb hosts as criminals. The world goes too fast for them, it makes them seem less and less relevant and they just want to things to slow down. This is social Nimbyism.

          • Posted by anon

            You said yourself a few days ago that one reason you switched to longer term rentals was to avoid the problems of the transient renter crowd. And if you don’t want those problems in the context of living out of state and getting compensated for your trouble, why would you think that someone who actually lived nearby would want to put up with those problems for nothing?
            Now I’d guess that long term corporate type renters would be among the least likely groups to cause problems. But I also don’t think that they represent the majority of airbnb usage.

          • Posted by san FronziScheme

            anon, I have done a little bit of shorter term airbnb, to fill the gaps. Sometimes you have a 10-day stretch between 2-months stays. I thought I’d give it a try, just for the sake of not dismissing it without having experienced it.

            My conclusion: short term airbnb is a very different animal from longer term. 1 – Logistics is very different. 2 – The crowd is different and when you get breakage / stains they do not have the time to get anything replaced or fixed. That’s more headache. 3 – They will have many questions because they want to do things now, now, now. 4 – The average IQ is lower since these are not the smart people relocating, but the “let’s experience SF in 3 days” people, therefore less interesting people to interact with. 5 – I am one spoiled happy camper who will not bother with unnecessary complexities like what I have detailed above…

            After now 2 years of experience, I will probably change my model to 45 to 120 days. You still get some riffraff in the 30 days. I want corporate relocation or high end researcher exchanges, not the “I need to be in SF for one month because of an unforeseen life event”. I also had a conductor for his season. Very nice people.

          • Posted by anon

            But that’s my point. You’re out of state and you don’t want to deal with these people. Think about the people who bought a house or condo to live in quietly and now have to deal with one (or more!!) of these pop-up hotels nearby.

          • Posted by san FronziScheme

            You are assuming there are visible negative consequences. It’s not a given.

            It is an inconvenience to do short-term from my standpoint because I’d have to manage very little things very often (hiring a task rabbit to do store runs, etc). Doing that every 2 months? No biggie. It’s also about the unnecessary dealings that come with smaller payouts. For instance If someone breaks a $30 plate on a $250 night I’d bother using the deposit. For a $12000 stay? You just have the person doing the walk through that the furniture is still there and the place in perfect shape to host the next person. Plates, glasses, lost spoons (what’s up with lost spoons? WTH?) I just have a stash of spare ones in a cabinet. No need to count beans and that’s a major time saver. It also helps keep all relationships civil.

          • Posted by BobN

            (what’s up with lost spoons? WTH?)

            My theory is still-groggy clean-up after morning coffee. Into the bin they go…

          • Posted by san FronziScheme

            BobN,

            I think there’s an international conspiracy in the spoon industry. There’s a lady on Union Square who steals spoons at Emporion Rulli (though she’s also taken a fork from right under our nose). I think all spoons are made in one factory in the world and the manufacturer recently discovered they used radioactive recycled iron, and they are busy stealthily recalling them. Just a theory.

          • Posted by san FronziScheme

            btw, I get the mystery of the vanishing spoon in my 3 other furnished rentals. I will soon have to open a budget line for that, lol. Or maybe I should buying the cute stuff.

        • Posted by Futurist

          I know this may seem pretty weird, but I’m actually supporting what you say..all the way.

          Every single comment by the constant rants by Fronzi are only about his needs. nothing else. NOTHING.

    • Posted by Futurist

      Exactly. AirBnB, Uber and other similar so called “sharing platforms” are just lying about what they really want: That is to make billions for the owners of the company. It’s all bs.

      I live in a residential neighborhood because I don’t WANT to live next to strip motels with people coming in and out at all hours.

      AirBnb should be shut down completely in SF.

      • Posted by san FronziScheme

        So much relevance in the argument. I am sold!

  7. Posted by BobN

    I wonder if the folks seeking to limit AirBNB might have resolved the more pressing problems simply by limiting the number of units any given person could AirBNB.

    • Posted by san FronziScheme

      That’s great! Yet another random proposition from Campos next week. Or is there enough time this week?

      • Posted by BobN

        It strikes as quite a bit more targeted than random, not that I want to give them any ideas.

        • Posted by san FronziScheme

          Too late. Expect a new project, rejected despite the hecklers bussed from the Mish, then turned proposition.

          • Posted by EcceMorons

            @san Fronzi Scheme – I keep meaning to ask you (and don’t answer if it’s too personal), but how big are the units your rent under your model?

            I ask because it sounds like the perfect model for SF, but I suspect my units might not work for it – because they’re huge-ass 4 bedroom flats, and my suspicion is that there probably isn’t NEARLY as many good short-term tenants for huge units as there would be for, say studios, one bedrooms, maybe two bedrooms…..

            I can see myself expensively furnishing a 4 bedroom flat and then advertising it and then….crickets….

            Thoughts? Much appreciated.

          • Posted by san FronziScheme

            For relocations most people will look for 1 bedrooms and 2 bedrooms. But you can target families with your 4 bedroom though I do not know that market. After all relocations are not always one single guy or a young couple. Pricing will not be proportional. You can’t multiply and ask double of a 2BR. To stay within the norm, maybe call it a 3BR + office.

            Prior to jumping in, I advise you to look at the target area (1/4 mile radius), look for places that can accommodate 6 to 8 people, then check their listings. Look for one that does 30+ days. On the main page, look for the link “View Calendar” and you’ll see how the booking is doing. If there’s no availability it should show, but be aware a place can be non-available for a number of reasons. If the calendar shows a few days available here and there spaced by more than a month, it’s a sign these are likely real bookings.

            To test the waters, set a low price. Plus you need to build a reputation. Not too low otherwise you’ll get the regular renter crowd. See how it fills up. Airbnb will show you the number of visits per day in your dashboard. For me it takes ~20 visits to get a real booking but it depends on the season.

            Also, you could start with cheap furniture, and upgrade as the money flows in. I have also heard of potential hosts who put pictures from places that were not theirs to see how much demand they would get and then invest in real furniture when they see the numbers are good. I am certain this is frown upon by airbnb and I have not done it myself.

          • Posted by san FronziScheme

            Also, do not blame me if it tanks 😉

          • Posted by EcceMorons

            Good ideas. Thanks, SFS.

  8. Posted by Ohlala!!

    All politicians need votes to stay in power. Mr, Campos is doing a great job protecting his base of renters. Ohlala!! thinks that a property owner should have the right to rent his or her property for one day or 365 days. Is Mr. Campos giving property owner a discount on property tax if he limits your property rights to 60 days out of 365 days? p/s: Ohlala!! regrets voting for Mr. Campos.

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