S.F. Airbnb rules would pull short-term rentals from shadows

S.F. Supervisor David Chiu's proposal would effectively prevent units from becoming full-time vacation rentals. S.F. Supervisor David Chiu's proposal would effectively prevent units from becoming full-time vacation rentals. Photo: Paul Chinn, The Chronicle Buy photo Photo: Paul Chinn, The Chronicle Image 1 of / 13 Caption Close S.F. Airbnb rules would pull short-term rentals from shadows 1 / 13 Back to Gallery

The thousands of people renting out their homes on websites such as Airbnb could soon be on the right side of the law in San Francisco, but only if they agree to play by a strict set of rules being proposed by Supervisor David Chiu.

Chiu's long-awaited legislation, which will be unveiled Tuesday, will lift a ban on short-term rentals in San Francisco but impose a number of requirements on people who want to offer apartments or rooms as vacation rentals. Chiu said the new rules will help protect the city's rental housing stock and make sure San Francisco gets the taxes it is due.

It won't make everyone happy, particularly landlords angry that tenants are subleasing units at a premium while they are bound by strict rent-control laws. But in San Francisco, where the ban on short-term rentals has often been ignored, supporters say the proposal will at least outline a set of rules and bring a widely used commodity out of the shadows.

Chiu said tens of thousands of San Francisco visitors use sites such as Airbnb and VRBO and that "clearly the blanket prohibition with no enforcement is not working."

A fresh approach

"We believe a different approach is necessary to create a distinction between reasonable behavior and bad behavior, all in the context of our scarce housing stock," he said. "And on the other hand, (we support) the idea that working families, students and residents trying to make rent might be able to slightly supplement their income if they happen to go out of town for a weekend or go on vacation during summer break or visit family during the holidays."

In multiunit buildings, the legislation would allow short-term rentals only in apartments where someone lives 75 percent of the year, effectively banning a unit from becoming a full-time vacation rental. It would require anyone renting out their place to pay hotel taxes, hold liability insurance and register with the city every two years.

And in a nod to property owners, the proposal specifically states that the new law won't override lease agreements and that rent-control limits still apply to short-term rentals.

If people fail to play by the rules and are reported to the city, the proposal would force websites to ban those renters. It also requires these "hosting platforms" to tell users of city laws and to collect and remit the city's 14 percent hotel tax. Airbnb last month said it will start collecting the hotel tax by the summer.

The registration requirements will apply only to two-unit and larger buildings. Single-family homes, which were already exempt from the short-term rental ban but are barred under city code from using their properties for commercial purposes, will not be affected, though Chiu said he is open to including them in the legislation.

"This legislative proposal acknowledges what our community already knows: San Franciscans should be able to share the home in which they live," Airbnb said in a statement. "We are reviewing this proposal and look forward to working with policymakers as we move forward."

Tenant advocates, whose primary concern was the permanent loss of rental housing, are pleased with the proposal, said Ted Gullicksen, head of the San Francisco Tenants Union. Gullicksen said the impact of a San Francisco resident renting out his or her home a few months or weeks a year is different from a property owner evicting long-term tenants to turn a unit into a permanent vacation rental.

"We want to focus on the latter - renters, homeowners and condo owners should be able to rent out a bedroom for a limited amount of time," he said, adding that the proposal could also help tenants who want to use Airbnb, VRBO and other housing websites to do so with less risk of eviction.

Harder to evict

The legislation will make it more difficult for landlords to evict tenants who rent out their units in violation of their lease. Currently, property owners can either move to boot out tenants because they violated their lease - a longer process that allows a renter to first try to fix the problem - or kick them out for being in violation of the city's short-term rental law. Chiu's legislation would eliminate that second option, which can result in a swifter eviction process.

But that's not the biggest concern of property owners, said Janan New, executive director of the San Francisco Apartment Association, which represents property owners. She said her members are primarily worried about "the health and safety of other tenants," who are going to be forced to live near strangers who are passing through and only using a unit for a short time.

"People that are using a unit for transient use typically aren't as careful as they are when it's their primary residence," she said. "We would prefer the status quo to anything else - and we are not in support of creating another dysfunctional bureaucracy."

Ed Singer, a lawyer who represents landlords in eviction suits, said to be completely fair the legislation should simply ban short-term rentals in apartments subject to rent control and should clarify that landlords can ban Airbnb rentals in their buildings.

"A tenant should not have the right to unilaterally change the use of a building owner's apartment," he said.

Airbnb hosts also expressed concern that the proposed rules could be too onerous.

"We know there needs to be change, but this is a bit extreme," said Emily Benkert, whose Guesthop company manages 50 Airbnb listings in San Francisco.

Two complaints

Her biggest quibbles are with the registry and the residency requirements. She said the registry - which would be kept internally by city officials but would be accessible to the members of the public if they filed a public record request - could cut the number of San Francisco hosts in half, and the residency requirement infringes property owners' rights.

"A lot of renters who are subletting their places, many of whom do it just a few times a year, won't want to be listed on a registry because they don't want their landlord to go in there and find them," she said. "A lot of property owners in San Francisco don't live here; it's their second home and they come here a few times a year. Doing short-term renting has been a way for people to keep their properties and have the freedom to continue coming here part time."

Chronicle staff writer Carolyn Said contributed to this report.