San Francisco continues to struggle like other cities around the world to rein in short-term rental services offered by companies like Airbnb, which has faced criticism for evading taxes, gobbling up precious rental units and jeopardizing hotel workers' jobs.
After a more than six-hour public hearing Thursday night, the Planning Commission supported legislation that would permit the currently illegal practice despite of a host of concerns raised over its impacts. The ordinance introduced by Supervisor David Chiu calls for regulations including permitting those in buildings with two or more units to offer short-term rentals for up to 90 days.
Amid the emerging technology industry and the growing "sharing economy" movement, short-term housing rentals are being whole-heartedly embraced by some who praise them for the opportunity to earn money.
But striking the balance between controlling the adverse impacts and allowing for the services in some capacity is all the more challenging in San Francisco, where rents are soaring amid a technology boom and tenant and landlord issues are among the most controversial and politically-charged.
The importance of the regulation issue for services like Airbnb was evident with the amount of public testimony Thursday. The hearing on Chiu's proposed legislation involved four hours of public testimony, which may have been a record in recent years. Commissioners also received what one said was a record amount of emails on a single issue.
Airbnb and similar services run afoul of existing city law that prohibits short-term rentals, those of less than 30 days. At any one time there are between 4,000 and 5,000 total units removed from The City's overall housing stock, about 1.3 percent, for the short-term rentals. There are five main hosting platforms accounting for approximately 80 percent of the total listings in San Francisco, including VRBO, Airbnb, HomeAway, Craigslist, and FlipKey. The services have exploded in popularity beginning in 2011. San Francisco-based Airbnb, which has been valued at $10 billion, is 6 years old with more rooms in its portfolio than major hotel chains.
"San Francisco is in a housing affordability crisis and is frequently described as among the worst in the Nation," city planner Aaron Starr's staff report said. "Any decrease in residential space available for the City's permanent resident puts an upward pressure on price, exacerbating an already untenable situation."
Many of those who testified were active Airbnb users who noted how the extra income has helped them, such as being able to afford to live in San Francisco in general, help pay for a husband's assisted living care, children's college tuition, and pay off student loans.
Among other regulations, Chiu's proposal would require short-term rental hosting platforms to pay The City's 14 percent hotel tax, register the property with The City and ensure that no renter can earn more than their monthly rent if covered by rent-control laws.
Starr recommended nine changes to Chiu's proposal, tightening restrictions and improving enforcement of them. Changes he proposed were requiring the reporting of the exact number of days a property was rented and to empower the Planning Department to be able to expeditiously cite offenders.
"A central registry that tracks the number of days each property is rented is essential for any Department to effectively enforce the proposed short-term rental restriction; without it the new regulations are essentially ineffective," Starr's report said.
Other recommendations were to extend all the restrictions to single-family homes and to apply the 90-day limit to hosted stays as well to in an effort to combat bed and breakfast type situations. Under Chiu's proposal, hosted stays have no cap.
Chiu said he intends to have the Board of Supervisors vote on his legislation in September when it returns from its August recess.