City wins Airbnb lawsuit
By Dale Carlson
Airbnb dropped its meritless lawsuit against San Francisco in May, a game changing
event for the city’s efforts to reasonably regulate short-term residential
rentals to tourists.
The suit challenged an ordinance approved unanimously by the SF Board of Supervisors
in June, 2015, that made Airbnb and other short-term rental websites
liable for listing and renting illegal housing units.
A federal district court ruled in November that the suit had no chance of
success, but ordered Airbnb and the City to find a way for websites to easily verify
whether a unit could be legally offered as a short-term rental. An agreement was
reached on May 1 and will be fully implemented by the end of the year.
Since 2014, San Francisco has allowed people to offer an extra room or an entire
unit so long as they’re renting only their primary residence. Second homes and
investment properties are ineligible, as are units that were subject of an Ellis Act eviction
or developed as below-market-rate affordable housing. You can rent an in-law unit but
only if it’s in your principal residence.
The law allows “hosts,” as they’re known, to rent a spare room 365 nights a year,
so long as they’re present, and 90 nights when they’re away. No one has yet defined a
method for determining when a host is sleeping in their own bed at night.
Hosts must obtain a San Francisco business license, register with the city’s
Office of Short-term Rentals, file quarterly activity reports and agree to
collect and remit hotel taxes. Violators can be fined up to $1,000 per day.
One of the largest fines – $42,000 – was levied on a Richmond District landlord
who had illegally converted apartments to full-time tourist accommodations.
By abandoning its lawsuit, Airbnb is now responsible for ensuring that all of
its hosts are legally registered to offer short-term rentals.
That’s a game changer because Airbnb currently has more than 8,800 active
hosts in San Francisco, while the City has just 2,100 registrants. And not all of the
hosts on the city’s roll list on Airbnb. There are dozens of other websites, including
HomeAway, VRBO, FlipKey and Casa Buena Vista.
If Airbnb continues renting unregistered units, the company itself can be
fined $1,000 per day per violation. If the City cracked down today, Airbnb would
be looking at a daily tab of more than $6 million. For far too long, Airbnb has facilitated
illegal short-term rentals with impunity.
The company’s fundamental business model relies on thousands and
thousands of people – here and in cities around the world – willingly,
wantonly violating local housing laws. It’s raised billions from venture capitalists and, at
$31 billion, is more highly valued than any of the world’s
largest hotel chains.
Airbnb rents units regardless of whether they’re registered or legal. It rents without the
owners’ permission. It even rents units over the owner’s explicit objections.
Aimco, one of the nation’s largest apartment owners, wrote to Airbnb three times
this past fall, asking that it stop listing units in Aimco-owned properties.
Aimco sued after Airbnb ignored its requests.
ShareBetter SF – a grassroots coalition of tenants and landlords,
hotel owners and hotel workers, neighborhood associations and affordable
housing advocates – has been pressing for effective regulations of shortterm
rentals for more than three years.
We are deeply concerned about the ill effects Airbnb rentals have on the availability
and affordability of housing, neighborhoods, jobs and merchants.
While we welcomed news that Airbnb had abandoned its frivolous lawsuit,
we’re skeptical that this rogue corporation will change its destructive ways
any time soon. We’re pressing City Hall to provide additional resources to ensure
Airbnb and other companies stop aiding and abetting illegal rentals.
We’re also interested in additional changes to short-term rental regulations –
an enforceable cap; written owner permission before tenants register and
list units for rent; meaningful life-safety requirements; disability
access; and, disclosure of nearby short-term rentals in real estate transactions.
We want to know what’s important to you. Have an illegal Airbnb rental in your
neighborhood or building? Frustrated City Hall hasn’t responded to your complaint?
Have an idea for new legislation? Drop us a line at firstname.lastname@example.org.
Dale Carlson is the cofounder of the non-profit organization ShareBetter SF.