Purchased for $855,000 in 2004, the single-family home at 166 Newton Street in Crocker Amazon has been operating as an illegal “hacker/co-living house for entrepreneurs, developers, digital nomads and students.”

Unregistered with the City but still listed on Airbnb, the host of the “Aviato Club” on Newton, whom had been offering weekly stays, has already been “instructed” by the City’s Office of Short-Term Rentals to cancel all pending reservations for stays of less than 30 days.

At the same time, as the property, which appears to have been illegally renovated to sleep up to 17 tenants at a time, remains zoned as a single-family home, a notice of enforcement has just been sent to the building’s owner (whom appears to have knowingly leased the home to the operators of the club).

And as such, the building’s owner is now facing a potential penalty of up to $250 per day unless the house is immediately restored to its use as a single-family home, “consisting of either one person, or two or more persons related by blood, marriage or adoption or by legal guardianship pursuant to court order; plus necessary domestic servants and not more than three roomers or boarders; [or] a group of not more than five persons unrelated by blood, marriage or adoption… unless the group has the attributes of a family in that it (a) has control over its membership and composition; (b) purchases its food and prepares and consumes its meals collectively; and (c) determines its own rules or organization and utilization of the residential space it occupies.”

Comments from Plugged-In Readers

  1. Posted by Dave

    This is an extreme example. The more common situation is, I presume, the home several doors down from me. The owner rents to 3/4/5 unrelated techies. The owner does not use AirBnB but Craig’s list and referrals to get tenants. The guess is he is not reporting the rent income on his taxes. The thing that caught my eye is “not more than 3 boarders”. Is that true across all RH1 neighborhoods? The home near me and many others in the neighborhood are rented to 3, 4 and 5 individuals.

    • Posted by Tipster

      Two or more related persons PLUS 3 boarders, or 5 persons unrelated. Doesn’t sound like they are doing anything wrong with 3, 4 or 5.

    • Posted by Dr. Pants

      Unless the landlord is getting paid all in cash, it can go as ‘unreported’ income but as soon as they get audited, the IRS will spank them crazy with penalties.

      • Posted by Notcom

        Do you realize what a small percentage of people are audited? Even if it happens – a big “if” – by the time it’s settled the spanking is likely to be elder abuse.

        • Posted by Peter

          I heard a statistic that for every $1 the US spends on the IRS for tax collection, they get back $5 – that is an awesome return on investment.

          • Posted by Brahma (incensed renter)

            Peter, the republicans in the U.S. House of Representatives don’t care about return on investment when it comes to government operations. They want to intentionally weaken the ability of the IRS to do tax audits so as to conform to the preferences of the republican political donor class, members of which are constantly pulling chicanery like illegally collecting rents in all cash so they can get away with not reporting income. I know because I’ve rented from guys doing this.

  2. Posted by Oh My

    We had one of these in our loft complex. It didn’t take long before we figured out why the water bill doubled in a month. 10 hot bunked people moved in with rotating faces….the unit owner hadn’t a clue.

  3. Posted by Richard

    I think I could drive a truck through that exception. Bylaws and common meals aren’t that hard to arrange.

  4. Posted by NYSHLONSF

    It seems the legal issue has to do mainly with the commercial nature of the arrangement. Per that snippet of law (has control over membership, collective meals, determines own rules), 17 people as part of a self-organized co-op or commune would be ok, but not if there’s a company making those decisions for them. Maybe the idea is that even with a commune, the membership is probably more stable and family-like than a short term boarding house.

    Not that I actually support any kind of residential use restrictive zoning, just curious about the law.

  5. Posted by r_sq

    So… they just need to eat dinner together?

  6. Posted by bachman_erlich_overdrive

    Really? San Francisco is going to tell people what a family looks like? This looks like a boarding house with a fancy web site.

    Airbnb says 30 night minimum. Aviato Club quotes monthly prices.

    What part of the house has illegal renovation? I just see sad furniture from goodwill, and cheap laminate counters…

    • Posted by SciLaw

      I guess you missed the paragraph stating that they have been asked to remove the weekly prices and to cancel all reservations under 30 days.

    • Posted by Anonymous

      I very much enjoy this level of parody.

    • Posted by Mystery Realtor

      That furniture is bottom of the rung Ikea

    • Posted by bachman_erlich_overdrive

      Raise your hand if you have “control over the membership and composition” of your family and “always prepare your meals collectively.”

      I don’t know where to begin…

      • Posted by Notcom

        You might begin by thoroughly reading the applicable wording and noting that pertains only to groups of people NOT “related by blood, marriage or adoption.”

  7. Posted by Amewsed

    This is an administrative hearing “ruling?”
    It would be difficult to find a judicial ruling like this in SF Superior Court.

  8. Posted by Notcom

    The various reals estate sites list the house – it’s the white one, not the one the pic centers on – as having been built in 2002…which from the looks of it must be either a typo or a major remodel.

    Anyway, the rental listing from “******” – which tho inactive is still up – describes this at one point as being “1 bedroom” then at another as “8 bedrooms”, offered at rates from $975 for a shared triple to $1075/double; it then closes with “No leases, no commitment – Fully furnished – Fully equipped kitchen – Deposit $250″….so “stable and family like”?…not unless it’s the Mansons.

    [Editor’s Note: 166 Newton is actually the house at the dead center of the pic above.]

    • Posted by Neighborhood Activist

      I’m sure I’m not the only one that thought the salmon-colored house was the subject of the photo, based on the angle. Now I realize that the photographer was trying to avoid the tree in front of the subject property. In any case, I think the salmon house “reads” as the subject property without the clarification, so thanks for that.

      • Posted by Notcom

        Yes, to add further – and expand on the “Editor’s note” – I believe this is a cropped photo from a larger panorama: thus, while 166 is indeed at the center of the photo – as shown – I believe 174 was actually from where the photo was taken, based on the fact that we can’t see its side walls.

        But enough of that Kodak moment, and back to the octet of bedrooms: just how itty-bitty ARE they ??

  9. Posted by Kraus

    “…unless the group has the attributes of a family in that it (a) has control over its membership and composition; (b) purchases its food and prepares and consumes its meals collectively; and (c) determines its own rules or organization and utilization of the residential space it occupies.”

    This last is the key phrase. All “Aviato” has to do is present proof — just like Chateau Ubuntu did a couple of years ago — that they meet this definition of ‘family”.

    The “Adamson vs. Santa Barbara” court decision in the 80’s makes this threshold rather low.

    If they act accordingly, Avaito, is doing nothing illegal and put this Planning Code “enforcement” nonsense to rest.

    That being said, they have to make sure that they operate in compliance with Building Code requirements with regard maximum bedroom occupancy based upon the bedroom sizes.

    • Posted by Notcom

      Of course that was described as a “ten bedroom/six bath” home and the lessor was also an occupant. Which as you (correctly, I would concur) point out gets to the heart of the matter : overcrowding.

    • Posted by SocketSite

      In addition to the lessee not being a tenant, keep in mind that (a) the actual tenants have no control over the membership and composition of the house, (b) food is explicitly not included in its operation; and (c) the tenants do not determine their own rules and utilization of the overall residential space they occupy.

      On the other hand, the current operation does fit the definition of Group Housing (“A Residential Use that provides lodging or both meals and lodging, without individual cooking facilities, by prearrangement for a week or more at a time, in a space not defined by this Code as a dwelling unit. Such group housing shall include, but not necessarily be limited to, a Residential Hotel, boardinghouse, guesthouse, rooming house, lodging house, residence club, commune, fraternity or sorority house, monastery, nunnery, convent, or ashram”), for which the home is neither zoned nor permitted.

      • Posted by Kraus

        Just like Chateau Ubuntu, let’s see how this one plays out.

        A mildly competent land use attorney will help them we the (weak) “family” definition and get them through this.

  10. Posted by NJ

    Erlich lives!

  11. Posted by Ohlone Californio

    Am I the only one hung up on 855K in Crocker Amazon in 2004? That must have been a record.

    • Posted by Neighborhood Activist

      Well, it was probably the only 8 bedroom home in Crocker Amazon. :p

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