Effort to legalize Airbnb stalls at Board of Supervisors committee 

click to enlarge Peter Kwan, head of Home Sharers of San Francisco, speaks during a rally of Airbnb supporters at City Hall. Many residents feel revenue from using Airbnb helps them remain in The City. - MIKE KOOZMIN/THE S.F. EXAMINER
  • mike koozmin/the s.f. examiner
  • Peter Kwan, head of Home Sharers of San Francisco, speaks during a rally of Airbnb supporters at City Hall. Many residents feel revenue from using Airbnb helps them remain in The City.

A proposal to legalize and regulate short-term rentals in San Francisco stalled Monday at a Board of Supervisors committee meeting as issues such as enforcement, fees and insurance remained under debate.

Amid concerns over the impact of short-term rentals provided by online services like Airbnb, which has the largest share of the activity in San Francisco, city officials have engaged in a monthslong debate over how best to legalize the currently illegal process.

The exploding industry has generated thousands of fans who have earned extra income from the service, but critics also fault the services for evading taxes, gobbling up housing during an affordability crisis and threatening hotel workers' jobs.

On Monday, the Board of Supervisors Land Use and Economic Development Committee held a seven-hour hearing on legislation introduced by board President David Chiu that would legalize short-term rentals in multi-unit buildings if a host registers with The City, pays a $50 fee every two years and lives in the housing for nine months out of the year. There would be no cap on the number of hosted stays a registered tenant can offer.

The committee raised questions about the proper amount of liability insurance to require, considered increasing the fee to register and added a requirement to notify landlords if a tenant registers to use the service.

Supervisor Jane Kim, who was the most outspoken critic of the proposal as it relates to enforcement, questioned how The City will be able to ensure residents are living in their units for at least 275 days.

"I am really concerned about passing any legislation that exacerbates the situation that we have," Kim said. "If we do not regulate co-hosted days, we are not going to be able to enforce against that. There is no way to prove whether I slept in my home tonight or not."

Another issue at the hearing was taxes, as Airbnb had promised to start collecting and paying The City's 14 percent hotel tax. Airbnb spokesman David Owen said the company has yet to do so, but "I am very confident in saying we are extremely close."

But referring to the loss of prior city taxes, Chiu said that "it has been estimated by some that The City has lost tens of millions of dollars because of this practice."

Former board President Aaron Peskin argued Airbnb should be held accountable for back taxes.

Sara Shortt, executive director of the Housing Rights Committee of San Francisco, a nonprofit that works for tenants' rights, said the legislation needs stronger enforcement.

"Because of the lucrative profits," Shortt said, "thousands of folks ... will continue to operate in an illegal manner."

Kim suggested the rental platforms provide room rental data to help The City with enforcement.

But Owen said Airbnb is opposed to such room rental disclosure information.

"Airbnb jealously guards, as do most Internet companies, our user data," Owen said.

Many of those testifying during Monday's hearing shared stories about how funds from the short-term rentals have helped them remain living in San Francisco amid the rising cost of living and pay off mortgages.

Small-business owners like Paul Ashby praised the short-term rental craze for helping to boost sales.

"We don't have a lot of tourists that come up to our neighborhood so any little bit helps," Ashby said of his Bernal Heights Jewish deli, Paulie's Pickling.

Another speaker, Charley Gross, a spokesman for the San Francisco Apartment Association, which represents landlords, advocated for a 300-foot radius notification for the short-term rentals, which is done for other commercial uses.

"It's a complete joke to say that this legislation does not affect the quality of life of San Franciscans," Gross said.

City planning officials estimate about 5,000 short-term rentals are listed at any given time using online platforms.

The committee postponed a vote on the legislation for at least two weeks.

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