Airbnb to purge illegal hotels from San Francisco listings

Alfonso Faustino (top on stairs) and his sister Irene Faustino (bottom on stairs) walk up their front steps after taking measurements on Pleasant Street and the sidewalk for the upcoming public hearing of a neighbor who is trying to convert the 3-unit apt building into tourist hotel units (left) next to their home (right) on Thursday, January 7, 2015 in San Francisco, Calif. less Alfonso Faustino (top on stairs) and his sister Irene Faustino (bottom on stairs) walk up their front steps after taking measurements on Pleasant Street and the sidewalk for the upcoming public hearing of a ... more Photo: Lea Suzuki, The Chronicle Buy photo Photo: Lea Suzuki, The Chronicle Image 1 of / 57 Caption Close Airbnb to purge illegal hotels from San Francisco listings 1 / 57 Back to Gallery

Airbnb says it is cracking down on San Francisco hosts who violate the city’s law on short-term rentals. Starting Saturday, it will investigate hosts who control multiple listings and will jettison “unwelcome commercial operators” — people running illegal hotels in private homes.

“We want to continually evolve the platform so it serves the best interest of each city we’re in,” said Chris Lehane, the former Clinton White House spin doctor and “master of disaster” who is now Airbnb’s head of global public policy. “This is a step in that direction, to make sure that each host has only one listing in San Francisco.”

Airbnb is also releasing data on hosts in its hometown, which it shared with The Chronicle. The numbers show that 1,149 listings, or a fifth of all full-home rentals here, are controlled by hosts who rent more than one entire home via the site. Since local law restricts vacation rentals to permanent residents offering their own home, listing multiple properties is a red flag.

Airbnb said 478 of the multiple-property operators are either licensed hotels or rentals of 30 or more days, which are legal. The remaining 671 listings are controlled by 288 hosts. Those hosts, the population Airbnb is now targeting for possible expulsion, brought in 17 percent of San Francisco host revenue for the 12 months ended March 15, despite representing only 7 percent of all listings in the city.

Years of criticism

The company’s latest move comes after years of criticism by activists who say lucrative vacation rentals gobble up some of the city’s precious housing stock. Although services such as HomeAway/VRBO, FlipKey and Craigslist also showcase temporary rentals, the blockbuster success of 8-year-old Airbnb — worth $25.5 billion with 2 million listings worldwide — catapulted the issue into public consciousness in San Francisco and cities such as New York, New Orleans, Paris and Berlin where housing is in tight supply.

A November ballot initiative sought to toughen San Francisco’s vacation-rental rules, but lost by 56 to 44 percent. Airbnb spent over $8 million battling it. However, that same election added Airbnb critic Aaron Peskin to the Board of Supervisors, creating a new progressive majority that appears poised to weigh more-restrictive laws for short-term rentals.

San Francisco has struggled to enforce the vacation-rental law enacted in February 2015. Investigating suspected violators is difficult — so much so that officials pleaded with Airbnb and other vacation-rental sites in January for help weeding out bad players. Between November 2015 and February 2016, the city’s Office of Short-Term Rentals issued 59 notices to property owners it suspected of operating illegally.

While Airbnb has cited privacy concerns in refusing to give the city information on possible violators, it now appears willing to police its site itself, something it had previously resisted. The company said it had already removed almost 100 San Francisco listings in January and another 118 in 2015.

One of San Francisco’s hot-button questions: Do vacation listings cause long-term rental prices to spike? The city historically has averaged 8,438 vacant units, per the U.S. Census’ American Community Survey. If all 671 Airbnb units being scrutinized prove to be illegal, that would add 8 percent to the city’s vacancies and might have a modest effect, at best, on prices. Counting the larger number of full-home listings on other services might change that analysis.

Airbnb has taken similar steps in other cities where it faces backlash. Notably, in New York it axed hundreds of listings on a couple of occasions. It drew fire for purging about 1,500 listings in November, just before releasing data that portrayed illegal hotels as a rarity in that city.

Airbnb’s San Francisco report omitted one suspicious sign of illegal rentals: Entire homes that are rented for more than 90 days a year.

Since all rentals are booked and paid for via Airbnb’s site, it could easily highlight those that flout San Francisco’s three-month cap on rentals of entire homes. The company ducked questions about why it didn’t extract that information.

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Single-home rentals

However, it said that single homes in San Francisco were rented a median of 48 nights a year and emphasized that “the vast majority” of local hosts appear to be renting their homes only occasionally.

The San Francisco law’s most basic component, a requirement that hosts register with the city, has failed to gain traction, with fewer than 1,000 registering. Airbnb said it has 7,046 hosts with 9,448 active listings, while there are thousands more on other sites. The company said it will launch twice-monthly email blasts encouraging hosts to register, on top of previous town halls, social media advertising and email campaigns.

Still, Airbnb and hosts criticize the registration process as cumbersome and mercurial. Last month, the city told registered hosts that they must itemize and pay tax on all the furniture, sheets, blankets, pots and pans used in their rentals, and offered an 83-page manual on how to do so.

INTERACTIVE MAP: Possible illegal hotels?

San Francisco has notified managers of the properties identified here that they appear to be running illegal hotels. About half of these 59 addresses are for multiunit buildings. The vacation rentals were listed on various sites, including Airbnb, HomeAway/VRBO and FlipKey.

Source: SF Office of Short Term Rentals

Paying taxes in 169 cities

As part of a global campaign to show it wants to be a good citizen, Airbnb is now remitting hotel taxes in 169 cities, with more added weekly, Lehane said. It's releasing data reports from Chicago to Barcelona, forging agreements with officials in Paris, releasing a “good neighbor” policy in Tokyo, and trying to live up to a “community compact” to be transparent and responsible, he said.

The company said last year it remitted $14.5 million in hotel taxes to San Francisco. At the tax’s 14 percent rate, that means Airbnb and its San Francisco hosts raked in just over $100 million last year. Airbnb takes a cut of 9 to 15 percent. Purging all the targeted hosts would cut that revenue by roughly a sixth, according to Airbnb’s figures.

In another initiative to address a frequent criticism, Airbnb said it soon will create a way for neighbors worldwide to complain when they’re disturbed by nearby residents’ Airbnb activities.

Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid