Prop. F: S.F. voters reject measure to restrict Airbnb rentals

Opponents of Prop F celebrate its defeat during an election night party at Oasis in San Francisco, California, on Tuesday, Nov. 3, 2015. Opponents of Prop F celebrate its defeat during an election night party at Oasis in San Francisco, California, on Tuesday, Nov. 3, 2015. Photo: Connor Radnovich, The Chronicle Buy photo Photo: Connor Radnovich, The Chronicle Image 1 of / 22 Caption Close Prop. F: S.F. voters reject measure to restrict Airbnb rentals 1 / 22 Back to Gallery

San Francisco voters handed a victory Tuesday to Airbnb and city residents who want to turn their homes into vacation rentals. Proposition F, a measure that would have drastically curbed short-term rentals, lost by 55 percent to 45 percent, with all precincts reporting and most mail ballots counted.

Prop. F was one of the most contentious issues on the ballot and centered on whether vacation rentals divert scarce housing to lucrative illegal year-round hotels, as its backers claimed, or help middle-class people make ends meet, as Airbnb and other opponents of the measure said. Airbnb spent millions to defeat the measure, running the most expensive campaign in this city election.

“Voters stood up for working families’ right to share their homes and opposed an extreme, hotel-industry-backed measure,” Airbnb spokesman Christopher Nulty said in a statement. Noting that Airbnb mobilized its local user base to go door to door, he added, “The effort showed that home sharing is both a community and a movement.”

Airbnb supporters, gathered at the Oasis nightclub in SoMa, cheered when early results showed the measure losing, waving “No on F” signs and raising glasses as campaign manager Patrick Hannan took the stage to announce the numbers.

At North Beach’s Club Fugazi, the Yes on F campaign mingled with supporters of Aaron Peskin, the apparent winner for the District Three seat on the Board of Supervisors. A Peskin victory would give six votes, a majority, to the board’s progressive wing, increasing the chances that the supervisors will tighten vacation-rental rules.

“Losing is always a disappointment,” said Dale Carlson, who led the initiative campaign. But considering how much money Airbnb lavished on defeating Prop. F, he said the margin was “still pretty remarkable.”

Prop. F sought to limit vacation rentals to 75 days a year; beef up enforcement and penalties; and establish big payoffs for neighbors and others who successfully sued violators. The measure’s backers, a coalition of housing activists, landlords, neighborhood groups and hotel workers’ unions, said the city’s existing regulations for short-term rentals, enacted in February, are toothless. They noted that only about 700 of Airbnb’s thousands of hosts complied with a requirement to register their homes as temporary rentals.

Airbnb poured more than $8 million into the campaign to defeat Prop. F, dramatically outspending the measure’s backers, who raised $482,000, the bulk of it coming from Unite Here, the hotel workers’ union. Although Prop. F would have curbed all short-term rentals — including ones listed through other companies, such as HomeAway/VRBO, Flipkey or Craigslist — Airbnb clearly had the most at stake in its hometown and was the only company to fight the measure.

The No on F campaign bombarded voters with TV ads and campaign mailers claiming the measure would spur people to spy on and sue neighbors, and would violate privacy. The Internet Archive tracked more than 26 hours of anti-Prop. F ads aired on San Francisco local TV stations from Aug. 25 to Oct. 26, during which time the Yes on F campaign aired just 16 minutes of TV commercials, it said.

Two weeks ago, Airbnb stumbled with an ill-advised corporate advertising campaign that used bus shelters and billboards to congratulate itself for remitting $12 million a year to San Francisco in hotel taxes. Social media exploded in outrage against the messages, which critics called snarky, passive-aggressive and tone-deaf. Airbnb apologized and removed the ads.

Airbnb had a potent weapon besides its massive campaign war chest. A jaw-dropping 138,000 city residents stayed in Airbnb rentals or hosted guests themselves in the past year, the company said. It contacted all of them, urging them to vote against Prop. F. That compares with 446,841 registered voters in the whole city, about half of whom voted in 2014.

Founded in San Francisco five years ago to provide temporary housing on airbeds, Airbnb is now one of the world’s most valuable startups, valued at $25.5 billion — more than the Marriott, Starwood or Wyndham hotel chains. It has more than 2 million listings in 190 countries. Its explosive success has set off struggles in cities worldwide as lawmakers and residents grapple with how to regulate the explosion of vacation rentals in their midst. But San Francisco is the first, and so far only, city where voters have weighed in.

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