S.F. ballot measure would severely limit short-term rentals Group seeks cash, support for a November initiative

Financial executive Doug Engmann (left), housing advocate Calvin Welch and PR executive Dale Carlson made their way through City Hall to a meeting with supervisors Monday April 28, 2014. A group of neighborhood activists are organizing a ballot initiative to rein in short-term rentals like Airbnb in San Francisco, Calif. less Financial executive Doug Engmann (left), housing advocate Calvin Welch and PR executive Dale Carlson made their way through City Hall to a meeting with supervisors Monday April 28, 2014. A group of neighborhood ... more Photo: Brant Ward, The Chronicle Buy photo Photo: Brant Ward, The Chronicle Image 1 of / 19 Caption Close S.F. ballot measure would severely limit short-term rentals 1 / 19 Back to Gallery

A trio of well-connected San Franciscans is backing a ballot initiative this fall that would severely curb Airbnb's operations in the city, The Chronicle has learned.

The group, which includes longtime housing activist Calvin Welch, public relations professional Dale Carlson, and former San Francisco Planning Commissioner Doug Engmann, is spearheading a measure in November to restrict people from renting their rooms or apartments to travelers via Airbnb, VRBO and similar sites.

"The short-term rental market is exploding and cries out for some sort of regulation," Welch said. "People are stunned to find out that a house on their block is now a hotel."

Among the more controversial parts of the proposal would be to financially reward residents who spot hosts flouting the rules, although the organizers may still scuttle that idea.

"We don't want to see it run wild all over the city," Carlson said. "If a neighborhood wants to have this sort of thing, there is a mechanism and process at the Planning Department to request a change in zoning."

The group is still seeking money and endorsements. Carlson said it has commitments for about $20,000, but he wouldn't identify where that money is coming from. That's almost half of the estimated $50,000 cost to gather the 9,700 signatures needed by July 7 to place the item on the ballot. He estimates the full campaign would cost an additional $150,000 to $200,000.

Tougher than Chiu's plan

The nascent proposal is much tougher than the law proposed by San Francisco Supervisor David Chiu. Whereas Chiu's legislation would legalize short-term rentals citywide, the ballot initiative would allow temporary rentals only in neighborhoods with commercial zoning.

Both proposals would create a mandatory registry for San Franciscans who rent out short-term space. But Carlson's group wants to make that information public. Chiu's legislation would keep the registry private except through sunshine law requests.

The ballot measure also requires hosts in apartments or condominiums to show permission from their landlords or homeowners associations, require Airbnb to verify with the city that each unit is registered, and require hosts to show proof of insurance.

In addition, the proposal calls for a private right of action for any citizen to file a complaint about an Airbnb rental, go to court, and receive 30 percent of any fines and back taxes that result, along with all their attorney fees. That idea is still in flux.

Both Chiu's law and the ballot proposal call for Airbnb to remit the city's 14 percent hotel tax. The San Francisco company has already said it will start doing so by the summer.

Airbnb strongly opposed

Airbnb said the possible ballot measure seems draconian.

"We want to work with everyone in San Francisco who cares about home-sharing, but this proposal would make it even harder for San Franciscans to make ends meet," spokesman Nick Papas said in a statement. "More than half of Airbnb hosts in San Francisco use the money they earn to pay their mortgage or rent, and the overwhelming majority share only the home in which they live. We hope to work with everyone on policies that help San Franciscans pay the bills and stay in the city they love."

A phone poll of 700 San Francisco voters conducted by research firm David Binder Research on behalf of Airbnb found that the majority - 69 percent - supported legalizing short-term rentals. The idea attracted support from across the political spectrum; 72 percent of independents, 59 percent of Republicans and 66 percent of Democrats backed legal status for the rentals.

Unite Here Local 2, the hotel workers union, does not have a position on the proposed ballot measure, said chapter President Mike Casey, although he favors regulating Airbnb more strictly than Chiu's legislation would do.

Casey said he is concerned about Airbnb cutting into hotel business once the cyclical industry hits another slump.

"We're not seeing an impact right now because business is going gangbusters," he said. "But at the next downturn, I think we'll feel it big time. There are a lot of shifts with cooks, room cleaners, bellmen and waiters being laid off as a result of hotel rooms (losing business to) Airbnb. This is a threat to the industry and a thread to good union jobs."

Preferring legislation

Kevin Carroll, executive director of the San Francisco Hotel Council, which represents about two-thirds of the hotel rooms in the city, said his trade group has yet to take a position on the ballot proposal or on Chiu's legislation, but prefers to work through the legislative process.

Chiu, who spent almost two years meeting with various stakeholders and crafting his bill, said the issue is too complicated for "the blunt ballot-box approach." The Planning Commission soon will hold public hearings on his proposal.

"This is one of the most complex policy areas we've worked on," he said. "The legislative process allows you to examine all these issues and deal with nuances - and fix issues in the future."

With ballot-box initiatives, "mistakes can rarely be fixed," Chiu said.