When San Francisco passed a landmark ordinance in October legalizing the kind of home sharing that Airbnb has made famous, Mayor Ed Lee said, “Now, San Franciscans who just want to share their home with occasional visitors will have a clear set of rules and restrictions to earn extra money to make ends meet.”
So, how's the new law working out?
Not at all, according to the San Francisco Planning Department. “We have no way of enforcing” the ordinance, department communications manager Gina Simi told the San Francisco Chronicle last week. A memo from the department to the Board of Supervisors said the law does not require Airbnb and other hosting platforms to report the names of people renting out their places and other critical information.
That's a problem. Without the booking data, the city can't check to see if rentals are registered. But that's not the only problem. The department said the law needs to be revised to tighten up a provision that caps rentals at 90 days per year if the owner isn't home, because verifying that information is “virtually impossible.” They want a straight cap with no wiggle room.
The law also doesn't provide enough money for the city to adequately monitor the Airbnb rentals, the department complained.
The Silicon Valley-based startup, valued at $13 billion just six years after it burst on the scene, may already be outbooking Hilton and Intercontinental on an annual basis. Airbnb claims business in more than 34,000 cities in 190 countries and is fighting with state, local and national governments over whether it should be covered by regulations that govern rental markets and the hotel industry or be treated as something new and different.
San Francisco’s housing market, the nation's most expensive, continues to be transformed by an influx of tech dollars in an economy that has been rather stagnant otherwise until recently, squeezing low- and middle-income renters out of their homes. Critics of Airbnb say the website shrinks the housing market by repurposing houses and apartments as short-term rentals vying with the hotel industry for tourists, businessmen and other city visitors.
The new law created a public registry of hosts and required they pay a $50 fee. Hosts also have to pay the equivalent of a hotel tax, carry liability insurance and follow building safety codes. They have to abide by rent-control laws and pay fines for violations.
TechCrunch wrote just before the Board of Supervisors passed the ordinance 7-4 that critics were not happy and thought it “basically unenforceable.”
The mayor indicated he was a lot more open to revisiting the ordinance than Airbnb, whose spokesman Nick Pappas told the Chronicle, “Just months ago, the Planning Commission supported this law. Now bureaucrats are busily throwing up roadblocks, including some that aren’t in the law and others that were rejected by the Board of Supervisors.”
Supervisors are considering legislation responding to the planning department’s critique.