40-44 Pleasant Street

The application to legally convert the three one-bedroom Nob Hill flats at 40-44 Pleasant Street from residential units into ‘hotel rooms,’ a move which would allow the building’s absentee owner to continue renting the apartments on a short-term basis, which is currently illegal per San Francisco’s so-called Airbnb Law, was unanimously denied by San Francisco’s Planning Commission last night.

As we first reported about the case earlier this week, the owner of the building has been facing the threat of daily fines for over a year.

25 thoughts on “Application to Establish an ‘Airbnb’ Hotel Denied”
  1. How did the city find out about this to begin with….dumb question eh?

    [Editor’s Note: Follow the link to the building owner above.]

    1. Zero chance of a “taking” lawsuit succeeding.

      She has great options available: (1) rent them as 30+ day corporate rentals, (2) rent them out as regular tenancies, (3) 1031 exchange for an income property in a non-RC jurisdiction, or (4) sell. Any one of those options will be very profitable – maybe just not as profitable as continuing to use it as an illegal hotel.

      1. It’s nice to see the rare, reasonable voice in the comments section here. Agree. If you buy property in a rent control jurisdiction, you have no basis to complain about regulations designed to bolster rent control. As for takings, this is literally the opposite of a permanent physical occupation, and your examples show why the airbnb law has questionable, if any, affect on the value of this property. She also can’t use it as an auto-detailing service, a meth lab or a night club. Damn government!

        1. Except I believe this building did not qualify for rent control when she bought it in 1993 (I think 4 units or less and you were exempt from rent control) so it isn’t fair to use the argument “she knew what she was getting into”.

          1. Four units or less were initially exempt from rent control only if one of the units in the building was owner occupied.

          2. That’s a good point (Prop I was before my day, so I don’t think about it a lot). However, I think that, if you’re talking about economic regulation generally, you have to concede that all of these arguments revert to the same thing, which is that this is a highly regulated market. As of 1979, owners of rental property have been on notice that their “business” is subject to severe regulation. (And even back in the day, landlords who purchased before rent control lost taking challenges as long as they received a fair return on investment.) So, in that context, I don’t think “regulatory takings” sticks if you enter a regulated market and the regulation does not lead to a total diminution of value of your regulated asset.

            So, while rent control obviously imposes a limit on profitability over time, I think you have to consider that, from the frame of reference of any particular tenancy, the owner was necessarily getting market rent as of the time of that tenancy. If their ROI is low, they needed to have invested more.

        2. So we should never change any laws for any reason? That’s nonsense. Agree that if it was under rent control when she bought it she needed to factor that into the decision on whether to buy – but I see nothing at all wrong with working to change a law you disagree with.

    2. Really, you’re calling a reasonable regulation on land use (hotel vs. residential) a “taking”? And let’s be clear that she’s been violating the law on short term rentals for more than 20 years. Hmmm, scofflaw antics justified with libertarian rhetoric – sounds like you should join your fellow travelers up in the OR bird sanctuary…..

    3. Folks like Ellis would be much happier in Somalia where pesky laws aren’t a problem. It’s a Libertarian dreamland!

  2. 3 nice one bedrooms that would likely bring in $120,000 or more in gross annual rent. If the landlord wanted a hotel, she should have bought one. You buy apartments, rent apartments.

    1. When she bought it 23 years ago, it was operating as a B&B. She continued to operate it as short term rentals.

  3. Who in the right mind wants to be a landlord in San Francisco? They are the most demonized people in the city. Be a landlord go to jail.

    1. Yes, this poor woman owns a 3-unit place (bought for $680,000 in 1995) that is likely worth ~ $4 million, she pays only $12,000 in property taxes thanks to Prop 13, and she could easily fetch $125,000/year in rents. Who in their right mind would want to be in a situation like that?!?!

      Good for her that she made a great buy at a great time. But I’m certainly not going to feel sorry for her because she is required to use it for a legal purpose.

      1. If an illegal immigrant can get free education, free healthcare and free legal services, maybe we should allow illegal airBnB?

        1. If we allow illegal airBnB rentals why not allow illegal squatting? Or do you only favor landlords breaking the law?

  4. Everyone who is AirBNBing should limit themselves to 90 days and raise their prices to correspond to the reduced supply – that will be awesome!

  5. Still wondering, can anyone explain why the draft of the decision citing testimony in front of the commission which had not happened yet, was already drafted and available on line before the hearing date? Is the Commission just rubber stamping the Planning Departments personal whims now?

Leave a Reply

Your email address will not be published. Required fields are marked *