S.F. ballot measure would severely limit short-term rentals

http://www.sfgate.com/default/article/S-F-ballot-measure-would-severely-limit-5436664.php

by protomyth • 12 years ago

59 68 12 years ago

dvcc• 12 years ago

I still think it is crazy that Airbnb has an evaluation of $10 Billion, when in its most active markets it is against the law.

If the penalties come to pass, which they probably won't, I wonder how it will actually affect usage.

scythe• 12 years ago

The investors who are valuing AirBnB so highly are the same people with access to lobbyists and the sort of money that talks loud enough for government officials to hear. I doubt they'd be investing so heavily if they didn't believe they could game the system (for better or for worse).

truelson• 12 years ago

You're giving VCs and institutional investors way too much credit. The amount of educated people who buy things based largely on the fact they are popular and growing is still pretty large, especially in a frothy environment like this one. They're more interested in getting out when it looks like growth is over than fighting the legal system to ensure a business can stay in operation.

frandroid• 12 years ago

If the law is not enforced at all when there are rampant, clear violations, then it's irrelevant whether it's technically illegal or not. Now the game's about to change though...

baddox9• 12 years ago

And in fact, I would argue that a law which is not consistently enforced is by definition not a good law.

fleitz3• 12 years ago

You may want to read up on Pablo Escobar and how much money you can make from a product that people want, but which is illegal.

dang2• 12 years ago

We changed the url from [1]. Submitters: please double-check what you post for links to more original sources.

1. http://gigaom.com/2014/04/30/a-reward-for-turning-in-airbnb-...

timr2• 12 years ago

I submitted this yesterday under the current URL, so that probably would have failed. I think a lot of people submit alternate URLs for articles that failed to get traction due to bad timing or whatever.

protomyth2• 12 years ago

Actually, I submitted because I liked how it was summarized and linked to the new york story. Original sources don't seem to be valued by folks up voting.

[edit] can moderators change the submitter to the person who originally submitted this article?

dang2• 12 years ago

Yes, that's an issue. We've got a bunch of ideas for working on this, and related problems with story quality and original sources. Perhaps one day I'll even be able to write a line of code again. :)

anigbrowl3• 12 years ago

I predict this will make it onto the ballot easily and give it a 60% chance of passage.

EDIT: Downvoters, a prediction is not the same thing as an endorsement.

rdl2• 12 years ago

What happens if both this and the Chiu proposition pass?

anigbrowl3• 12 years ago

Prolonged litigation.

Crito• 12 years ago

The downvotes were probably more about the worth of your comment. Your opinion and some off the cuff percentage aren't really interesting without some sort of accompanying justification or analysis. Why do you think it will make it to the ballot easily, and why specifically 60% odds of passing?

anigbrowl3• 12 years ago

It's a hunch, for sure. I actually wrote a few hundred words on why I thought so, but scrapped it because it's basically just rationalization rather than based on specific data. The pros and cons of AirBNB have been debated to death on HN for the last few years, so I saw no point in repeating those arguments.

But to flesh it out a bit: the threshold for getting something onto the ballot is around 9500 signatures, while the # of registered voters is in SF is just under 500k. Getting 2% of the electorate to sign a ballot petition on a hot-button local issue is easy in SF.

As for passage, I've written at length before on the conflicting economic interests of landlords, renters, and other property owners, and how SF's restrictive geography leads to the adoption of zero-sum strategies. For a better and fuller explanation; I'd refer you to that long TechCrunch article on SF's housing crisis: http://techcrunch.com/2014/04/14/sf-housing/

I predict passage with a healthy margin because the larger problems are rather intractable, but it suits all stakeholders to make AirBNB a scapegoat for the city's structural economic problems. There are a lot of landlords, renters, and property owners who don't like AirBNB for different reasons, and short-term rentals give them something to agree about and lower political tension. Also, everyone knows someone with ludicrously cheap rent thanks to rent control, and punishing people who exploit that for personal gain will be popular (even though the number of people who do so and get away with it is tiny). If the proponents of the measure take out the 'snitching reward' mechanism and instead direct that 30% of the fines go to some popular local hobbyhorse like (much-needed) road repairs, support will probably go up.

Opponents of the ballot initiatives should avoid characterizing it as a dark horse backed by the hotel industry or service workers union, whether or not that is actually the case, but push the Chiu measure instead. Short-term rental proponents have been almost comically tone-deaf about how their arguments sound to people who can't/won't participate in the STR market themselves.

brryant• 12 years ago

I hope SROs in San Francisco get as much administrative attention as short term rentals. Decade old legislation severely hindering the development of downtown SF.

dougmccune4• 12 years ago

As an SF resident, I'd support something that allowed short-term rentals only if the host is present and the host is the owner. Permanent AirBnB units don't help the housing market in the city.

I find it funny that AirBnB's justification is that their users rely on the money to make ends meet. But at the same time, if you're taking a unit off the legit long-term rental market to put it on the permanent short-term AirBnB market you are by definition driving up rents for everyone in the city by reducing the supply of rentals. So the justification is: "San Francisco is so expensive, our customers need the ability to drive up rents even more because rents are so high!"

enjo• 12 years ago

Permanent AirBnB units don't help the housing market in the city.

I could see that it might not help, but does it hurt?

dougmccune4• 12 years ago

It takes what would otherwise be rental units for SF residents off the market and instead provides them to tourists. So my opinion is that yeah, that hurts the residents of the city.

You could make the argument that increasing tourism, or increasing the available footprint of where tourists stay (ie not just downtown where all the hotels are) is beneficial. I would actually love to see legit bed and breakfasts open in many more parts of the city. As it is your hotel choices are basically limited to downtown and Fisherman's Wharf. But I don't think helping tourism in SF should come at the cost of making the city less affordable for residents.

lindauer• 12 years ago

Yes. It reduces supply in the long-term housing market by taking a unit that otherwise be permanently occupied and renting it out short-term. I like staying in STR's when I travel, but I think this is a case where some regulation is reasonable. Hotel rates are so much higher than long-term rental rates on a nightly basis that there's a strong market incentive to use your property as an STR rather than LTR.

alwaysdoit2• 12 years ago

I guess the question I have is, should someone be able to do a housing swap? Say, let someone trade use their home in SF for a week in exchange for use of the other party's home in NY? Does that need to be regulated?

dougmccune4• 12 years ago

I agree that there's a huge grey area in terms of defining what crosses the line. I should be able to let my buddy stay at my place if I'm not here. I also don't have a problem if places that legitimately would have just been empty are rented to tourists (ie I'm traveling for 3 weeks and otherwise would just leave my place empty).

The thing that's not OK is when someone realizes they can rent out their place as a permanent hotel to tourists and get more income than renting it out to residents. So I think a first step is to stop the ability to convert a rental unit serving residents into a hotel for tourists. Then the more nuanced stuff beyond that will take a lot more debate.

applecore• 12 years ago

This regulation is meant to stop people from buying cheap apartments and turning them into makeshift hotels.

fleitz3• 12 years ago

The major drivers of housing supply / demand in SF are rent control and permitting, not short term rentals.

Exactly, how much of the city do you think AirBNB is renting out?

dougmccune4• 12 years ago

A random search on AirBnB for a date in December shows me about 900 "Entire Place" rentals available. I'm not saying that all those would definitely be long-term rentals in the city, but I have a hard time believing that there are about a thousand empty apartments/houses that would otherwise just be sitting empty were there not the lucrative AirBnB market.

tedsanders2• 12 years ago

That's a funny point, but consider this: Land (along with regulation) is what limits the supply of housing in SF. If you transform a house to a hotel, then yes, it's true, the supply of housing has fallen. However, at the same time, the supply of hotels has risen. If the world equilibrates, then perhaps a hotel is torn down elsewhere and its land is freed up for housing. So I don't think it's necessarily the case that short-term rentals drive up the price of long-term rentals (but perhaps it is once you acknowledge that hotel rooms have higher density than AirBnB).

Also, it seems like this logic could apply to anything. Oh, you're building a Chipotle so that poor people can eat cheap food and earn money? Well that Chipotle takes up land, driving up rental prices. High rental prices means that people have less money and less of a budget for food. So the justification is: "San Francisco residents are so poor, they need the ability to become drive up prices and become even poorer!" But that seems a bit silly.

harryh• 12 years ago

Just an aside but it's almost all regulation that limits the supply of housing in SF. There is essentially no lack of land due to our technical ability to stack things vertically.

baddox9• 12 years ago

Why not just let the apartment complex or home owner put rules in the lease that specify what kinds of behavior will result in eviction? I don't even see the need for specific rules against short-term rentals, because those don't inherently cause problems to anyone. If you're concerned about noise, just have a rule about noise.

wpietri6• 12 years ago

One reason would be that the housing market is bad enough without converting a bunch of housing stock into virtual hotels.

But more directly answering your question, what you're talking about is coming up with a good set of regulations for virtual hotels. That's hard. We often solve similar problems through zoning. E.g., we don't come up with a zillion little regulations on exactly what should be allowed in an industrial area versus a residential area. We just put compatible sorts of use together, and then mainly trust that people will work it out.

geuis2• 12 years ago

As a SF resident, I'm opposed to any regulation at all. I'm a long term renter (same house, 7 years) and my lease prevents subletting. That's exactly where the responsibility and regulation should lie, at the feet of the home owner. If I own a piece of property or have a lease that allows it, then I should have the free choice to do with that property what I want in regards to something like Airbnb. In my case, the owner of my house doesn't want that. Other owners do. A friend just purchased a condo for a lot of money. He should be free to do with his condo what he wants.

How far does this line of thinking extend? What about small startups that work out of someone's house or apartment? They're doing commercial activity in an unzoned area, so that should be banned too.

How about coffee shops? Coffee shops are generally licensed to sell coffee and non-cooked (on premises) goods. Want to sell sandwiches made on site? That's a different (expensive) license. Beer and wine? Same thing. So coffee shops aren't licensed to be places of business for customers to perform commercial activity. We should ban engineers working from cafes too.

I've always liked the petition (http://bastiat.org/en/petition.html) Bastiat sent to the French Parliament proposing that they block out the sun to benefit French candle makers. Its in the same vein as a Modest Proposal from Swift about the Irish poor.

We're seeing government protectionism of new competing services against established and entrenched businesses, i.e. taxi medallions vs Uber/Lyft, hotels vs Airbnb, city-built fiber vs Comcast/Time Warner.

This is dangerous. It limits competition and competition is almost always good for customers.

We need to stop this from happening in SF.

wdewind6• 12 years ago

While I generally favor a less-regulation approach, you're missing the core issue here: short-term rentals have a negative effect on neighborhoods because they change the incentives of the people living the house from those of a neighbor to those of a visitor. This is precisely what zoning regulations are designed to protect.

How far does this line of thinking extend? What about small startups that work out of someone's house or apartment? They're doing commercial activity in an unzoned area, so that should be banned too.

The difference is that no one around the startup is going to complain because they aren't impacting their neighborhood negatively.

Short term rentals are decisions you make for your neighborhood without their consent. The feedback mechanism that would replace regulation on Airbnb is unfortunately limited to only the guests who stay, which are not all of the stakeholders affected by any means.

geuis2• 12 years ago

I appreciate your point of view, but this is just supposition. As far as I know, there have been no actual studies done related to the effect of independent rentals using the Airbnb model on neighborhoods.

My own opinion is that property owners have the ability to do what they will with that property up to the limits of established laws. This means that with no existing laws to prevent action, those actions are allowable.

Based on that opinion, and unless some studies are done that factually demonstrate negative impacts on neighborhoods, no pre-emptive laws should be passed restricting this activity.

baddox9• 12 years ago

short-term rentals have a negative effect on neighborhoods because they change the incentives of the people living the house from those of a neighbor to those of a visitor.

So what? People aren't friendly enough to their neighbors? Is this really worth regulating? If there's a specific concern, like tenants not maintaining the property or being too noisy, why not just require tenants to take care of the property and have a noise policy?

breischl• 12 years ago

Coffee shops need a different license to make food to ensure that they have a safe, hygienic food prep area. Hotels are subject to health regulations as well. Hotels are also supposed to collect guest taxes that I'm guessing many (most? all?) AirBnB hosts weren't collecting. ie, they were not playing by the same rules as everyone else, which is anti-competitive.

The neighbors should get a say in whether you're running a hotel out of your house/condo, because there are externalities involved. For example, if the condo next door to you hosts hundreds of people per year they're more likely to get bedbugs, which can require fumigating the entire building. I'm sure we can come up with some more if you try.

Bottom line, certainly some regulations exist for protectionist reasons, but you're wrong in assuming that protectionism is the only reason for regulation. AirBnB and others should be subject to a reasonable level of regulation. It's unfortunate, but that's the cost of living in close quarters with lots of other people.

wpietri6• 12 years ago

I have some issues with this ballot proposition, but you take it too far.

The "property owners should be free to do as they please" thing is a good slogan, but it ignores negative externalities. E.g., I shouldn't be able to open up a paper mill or a hog farm in my condo, because the effects of that extend beyond the bounds of my property.

That's why we have zoning, for example. We zone an area residential because many people don't want to live in a commercial zone. Saying, "You can't run a hotel in this neighborhood" is something we already do, so it's not crazy to say, "You also can't use AirBnB to run a hotel-like-thing in this neighborhood."

arebop• 12 years ago

Segregation by use into residential/commercial/industrial zones is a characteristic of suburban rather than urban planning.

An alternative to zoning by use is to zone by intensity or pattern of activity. You can consider externalities such as traffic generation or noise or chemical pollution explicitly rather than assuming that e.g., every manufacturing process generates noxious fumes.

The more urban neighborhoods of SF including Pac Heights, Russian Hill, Nob Hill, SOMA, the Mission, the Castro, and Civic Center all include hotels right next to or above or below residential and other, complementary, uses [https://www.google.com/maps/search/san+francisco+hotel/@37.7...].

midas007• 12 years ago

Yes. \o/

Anything less is control-freak, incumbent cronyism with a mafia protection fee.

calbear81• 12 years ago

What if we changed the equation and brought landlords in on the action without having to evict renters? Having followed this topic for quite a while, I think these points are generally accepted:

- People are more okay with host-present room/couch rentals than full apartment rentals. - Landlords are pissed about rent-controlled units being arbitraged by their renters. - Everyone just wants to make some money

Landlords can agree to a renter doing AirBnB if they are willing to profit-share with the landlord via some type of 3rd party rental management service. The landlord would have to ensure that everyone in a building agrees to this or at least you set up floors for "sublet-allowed" units so folks know what they're getting into.

rsgalloway• 12 years ago

Another reason to never own property in SF or NY.

S.F. ballot measure would severely limit short-term rentals

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