In response to San Francisco’s new vacation-rental law to allow unlimited short-term rentals when a host is present, a powerful group of unions, landlords, housing activists and traditional hotels are preparing a November ballot initiative to severely constrict Airbnb and other “sharing economy” companies’ ability to help individuals secure short–term rentals from part or all of their homes or apartments.
Airbnb provides a cloud-based platform to list and collect payments for rentals–sofas, rooms or entire private homes–for a short period. The company closed on a $500 million round of venture capital funding two weeks ago.
The company’s booming success, which made the financing possible, has also drawn lots of heat from incumbent competitors, such as the traditional hotel industry and its unionized employees. But due to the success of Airbnb’s lawyers in prevailing on the legal and regulatory front over the last five years, Airbnb’s business model continued to accelerate, and now the company offers over 600,000 rental listings in 200 countries.
However, in a new attack against Airbnb’s vacation-rental model, a group called Share Better SF is preparing to raise the signatures necessary to place an initiative on the November ballot. The goal of the effort is to use new rules to constrict the ability of Airbnb and others to help individuals turn part or all of their home or apartment into cash generating short term rentals.
As a coalition of unions, landlords, housing activists, and neighborhood groups, Share Better SF says its plans to ask voters to approve a cap on all vacation rentals at 75 nights a year and impose stiff penalties and fees on companies like Airbnb or Homeaway for posting rental listings that do not comply with city law. Hosts and “hosting platforms” would also be required to file quarterly reports on their rental usage and revenue.
Dale Carlson, a public relations professional working with the Share Better SF campaign, complained to the San Francisco Chronicle, “The wholesale conversion of residential units to short-term tourist accommodations takes a significant chunk out of available and affordable housing.”
Airbnb, sensing the existential risk to its business model if the initiative is passed, told the San Francisco Business Journal, “This ballot proposal is nothing more than a Trojan Horse that would effectively ban home sharing, cost the city revenue, and make San Francisco unaffordable for thousands of families.”
Company spokesman Christopher Nulty cited a recent David Binder survey that Airbnb commissioned of 1,322 likely San Francisco voters. The poll found that 51 percent would oppose a ballot measure that “would effectively ban Airbnb from operating short-term rentals in San Francisco.” Only 44 percent said they would support such a measure and 5 percent were undecided.
San Francisco has grappled for several years with how to rein in vacation rentals, which exploded with the popularity of Airbnb as a San Francisco startup in 2010. The city banned vacation rentals in private homes, but had virtually no ability to enforce that law, let alone collect the 13 percent transient occupancy tax (TOC) for individuals. The new law enacted in February legalized and created a framework for short-term rentals, including a citywide registry system to collect the tax.
Despite thousands of listings on Airbnb, HomeAway and other vacation-rental platforms, only a few hundred “hosts” have registered. Hosts and Airbnb complain that the system, which requires in-person appointments and several documents, is cumbersome.
But even the minority of Airbnb hosts complying with the registry are generating over $1 million each month in new TOC taxes for the City of San Francisco.
The hotel and restaurant workers’ union “Unite Here Local 2” has contributed about a third of the $90,000 raised by Share Better SF so far, the Chronicle reports. Share Better SF is confident in its ability to place the initiative on the November ballot.