Residents vs. tourists

How many rent-controlled apartments is Airbnb taking off SF's housing market?

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(62)

steve@sfbg.com

Evictions and displacement have become San Francisco's top political issues, amplified by protests against tech companies that are helping gentrify the city. Yet Airbnb, which facilitates the conversion of hundreds of San Francisco apartments into de facto hotel rooms, has so far avoided that populist wrath.

Tenants use the online, short-term rentals to help make rent in this increasingly expensive city, a point that the company often emphasizes.

"For thousands of families, Airbnb makes San Francisco more affordable," Airbnb spokesperson Nick Papas wrote to the Guardian by email, citing a company survey finding that "56 percent of hosts use their Airbnb income to help pay their mortgage or rent."

But it's also true that Airbnb allows hundreds of rent-controlled apartments to be removed from the permanent housing market — in violation of local tenant, zoning, tax, and other laws — something that has united tenant, landlord, hotel, and labor groups against it (see "Into thin air," 8/6/13).

"The problem is Airbnb is so easy and attractive that you can take a unit out from under rent control forever," San Francisco tenant attorney Joseph Tobener told the Guardian.

"We're getting 15 calls a week on Airbnb," he said, describing four categories of complaints: landlords evicting tenants to increase rents through Airbnb, tenants complaining about neighbors using Airbnb, tenants being evicted for getting caught illegally subletting through Airbnb, and Airbnb hosts who can't get guests to leave (city law gives even short-term residents full tenant rights, except in hotels).

There isn't good public data on how many units are being taken off the market, but Airbnb generally lists well over 1,000 housing units in San Francisco at any given time, with its smaller competitors (such as Roomorama and VRBO) adding hundreds more.

The San Francisco Rent Board listed 326 no-fault evictions (Ellis Act, owner move-in, capital improvement) in its 2012-13 annual report. That number is almost certain to rise in the 2013-14 report due out in March, and it is compounded by an unknown number of buyouts that pressure tenants to voluntarily leave, all of it creating a displacement crisis that has galvanized the city.

"Isn't it far more likely that more units are being lost [from the rental market] through Airbnb?" San Francisco Magazine recently quoted a UC Berkeley professor as saying in an article questioning whether Ellis Act evictions are really a "crisis."

So Airbnb is clearly having a big impact on the city's affordable housing crisis. Yet Airbnb is largely flying under the political radar in its hometown and ducking questions about its impacts.

"Airbnb has all the statistics we need to assess its impacts on the city's housing market," Tobener said. The company refuses to disclose such data. Airbnb's customers need to consider their impacts to the city's affordable housing crisis, Tobener added, because "there are social consequences to the decisions we make."

 

STALLED IN LIMBO

Last year I discovered Airbnb was flouting a ruling that it should be paying the city's 15 percent transient occupancy tax ("Airbnb isn't sharing," 3/19/13), a nearly $2 million per year tax dodge.

Yet Airbnb, which has quickly grown from a small start-up into a company worth nearly $3 billion, has some powerful friends in Mayor Ed Lee and venture capitalist Ron Conway, who invests in both Airbnb and Mayor Lee's political campaigns and committees.

So the company has stonewalled Guardian inquiries for the last year as it has worked with Board of Supervisors President David Chiu on legislation that tries to bring the company's business model into compliance with local laws. That hasn't been easy, as Chiu told us.

Comments

is a miscategorization of the process. There is no such thing as a "rent controlled unit". There are just units which, if rented out on leases lasting more than 30 days, then become subject to rent control for the duration of that tenancy.

In other words, it is tenancies that are rent-controlled and not units. And they are only rent-controlled if they are rented out long-term, and only as long as that lease lasts.

And even if a property owner decides to go short-term rather than long-term, that's not AirBnB's doing. You can do the same thing via CraigsList or via letting places in other cities and nations, far far away from SF jurisdiction.

A better question is this: Why has SF made long-term rentals so unattractive for property owners that they would rather go into the B&B business than rent to a local resident? The blame for this situation lies firmly with the city's punitive policies and not with any one website that may facilitate consensual, legal transactions as part of the sharing economy.

Posted by Guest on Feb. 04, 2014 @ 4:48 pm

No, Guest, rent control applies to rooms in buildings that were built before 1979, so it is the units that are rent-controlled, not the tenancies. And that's also why San Francisco has a finite (and now dwindling) number of rent-controlled units and can never get more. So it's also true that every unit that is removed from use by a permanent city residents and reserved for tourists is taken "off the market" of apartments.

Posted by steven on Feb. 10, 2014 @ 12:47 pm

that is rent control is that there are many units that would be rent-controlled if they were rented out, but they are not rented out precisely because of rent control!

This includes units where the owner chooses to live, or have his family live. It includes units converted to TIC's, which would fall back under RC if they were ever let out. And it includes the number of units deliberately left vacant - estimates for that vary between 10,000 and 30,000.

Also, only leases of more than 30 days are covered by rent control. That is why SRO's often make sure their "guests" have to move out for a day every month.

I'd agree with you that the number of RC units are dwindling and I'd estimate at a rate of 5,000 a year if you include the units that are left vacant and never re-let. The solution to that is obvious - making renting attractive again for landlords.

But to the central point here - a temporary let such as those done thru AirBnB are legal and, as long as the guest stay less than 30 days, rent control does not apply even if the unit is theoretically under rent control.

Posted by Guest on Feb. 10, 2014 @ 1:58 pm

Renter protections apply on day one, not after 30 days, as you claim. What you wrote about SROs is also untrue. Tenants have rights as soon as they legally occupy a dwelling, as I wrote here and in Into Thin Air, which is another problem with Airbnb's business model. Tobener even told me that if affordable housing advocates really want to get radical, they'll have hundreds of activists do one-night rentals through Airbnb and then simply refuse to leave, which would be a mass squat as a protest for housing justice that would force all the Airbnb hosts to go through lengthy, costly, and expensive evictions processes that would gum up the legal system. Despite your narrow pro-landlord viewpoint, the people have more power than you think.

Posted by steven on Feb. 10, 2014 @ 3:31 pm

This is from that well known right-wing think tank - the Housing Rights Committee of SF:

"First of all, a person gains tenancy (or becomes a tenant) in an apartment by living there for 30 days and paying rent. They also gain all rights under rent control (if their building is under it) and state law. No actual written lease is needed in order to be a tenant. Of course, it is better to have something in writing to be able to prove the terms of your tenancy. A tenant in an SRO (Single Room Occupancy hotel) gains her rights under state law after 30 days and her rights under the rent ordinance after 32 days."

Do you just like to make stuff up that's not true?

But hey, if an "activist" wants to book a night with me for $120 a night and then decides they will invoke their rights to stay there, and pay me over 4 grand a month, I might even let them. Bring it on!

Posted by Guest on Feb. 10, 2014 @ 3:46 pm

That's not what the Rent Board says: renters have rights from day one. http://www.sfbg.com/2013/08/06/thin-air?page=0,4

Posted by steven on Feb. 10, 2014 @ 5:48 pm

I see no direct reference to the Rent Board. Whereas I showed you a direct link from HRCSF.

I strongly suggest you check on this before blabbing. It's fairly common knowledge among SF landlords that the magic numbers are 30 and 32 days.

Posted by Guest on Feb. 10, 2014 @ 5:56 pm

hotel room after the paid night is up, and the hotel would then have to go to court to get you out?

If he is saying that then he may just be the world's worst lawyer. What would happen is that the hotel security staff would physically remove you from the hotel room, charge you the costs of doing that plus the hours of overstay on your credit card, and possibly have you arrested for trespass.

Posted by Guest on Feb. 10, 2014 @ 4:18 pm

Tenant laws don't apply in hotels, but they do apply in apartments that are being treated as hotels. http://www.sfbg.com/politics/2014/02/10/radical-proposal-squat-airbnb-ho...

Posted by steven on Feb. 10, 2014 @ 5:43 pm

tax is due on short-term apartment stays.

I'll be sure to use your argument

Posted by Guest on Feb. 10, 2014 @ 5:54 pm

when you rented out your apartment to AirBnB, it was all hunky dory.
but now are you saying you'd support this "sit-in" concept? I guess it is all well and good so long as other people have to deal with that mess, not you, right?

here's a newsflash: lots of people who use AirBnB are people just trying to make a little extra $$ to get by, as you did when you used their services. Are these really the people you want to alienate? I was under the impression that after the last butt whippin' "progressives" took at the polls that the progressive movement was going to try to expand its appeal. Supporting something like this makes a mockery of that plan

just sayin'...

Posted by guestD on Feb. 10, 2014 @ 4:26 pm

business end of a baseball bat, then one of them squatting in your bedroom past the 12 noon deadline might just present itself as the perfect opportunity.

Posted by Guest on Feb. 10, 2014 @ 4:46 pm

Many progressives have bats too, tough guy. I have one myself. Now, I wouldn't advocate violence myself, like you are, but self-defense is another matter.

Posted by steven on Feb. 10, 2014 @ 5:41 pm
Posted by Guest on Feb. 10, 2014 @ 5:53 pm

Stand back!

He has a bat, and he's not afraid to use it!

Posted by Guest on Feb. 11, 2014 @ 12:35 pm

someone who has no right to be there. They can use deadly force if that person resists.

Posted by Guest on Feb. 11, 2014 @ 12:49 pm

that reasoning is precisely why there is housing problem in SF--why would any landlord subject themselves to 1 yr of abusive, destructive tenants who refuse to move?

Posted by Guest on Feb. 11, 2014 @ 11:47 am

ensure more rental units being available is to stop bashing the very people that you want to offer them as rentals.

As long as you make long-term rentals unattractive, then owners will do short-term lets instead. I mostly do short-term lets these days. Really nice people, often from overseas, always pay on the nose and never crow endlessly about their rights.

Why would I ever rent to someone like Steven again? He's made himself into a residential pariah.

Posted by Guest on Feb. 11, 2014 @ 1:44 pm

something like a OMI or an Ellis, and then the unit being re-rented. So no "new law2 is needed.

I suspect the law SFBG really wants is a law that compels a landlord to rent to only a long-term tenant and, moreover, to never leave that unit vacant or convert that unit to a different use.

But that would be unconstitutional as various CA cities have already found out, and which led directly to the Costa-Hawkins Act and the Ellis Act.

As much as you'd love to, you cannot both force LL's to rent cheap AND to stay in the landlording business. You can have either but not both. If you really want to encourage LL's to take on long-term tenants, then why do you make it so unattractive for them to do so?

Posted by Guest on Feb. 04, 2014 @ 4:53 pm

What they ultimately want is for all housing to be government owned. They haven't exactly made a secret of that fact. Of course, that will never happen, so they are settling for driving out as many mom n' pop property owners as they can in order to create a more extreme class division between tenants and large investment-group landlords in the hope that this will help them at the polls.

Posted by Pol Potty-Mouth on Feb. 04, 2014 @ 10:02 pm

property owners can do with their properties. What they seek is to be able to force property owners to do what they want them to do. But that is illegal and unconstitutional.

I am free to not rent out my units to long-term tenants, and tens of thousands of units are kept of the market. They hate that but are powerless to prevent it.

Posted by Guest on Feb. 05, 2014 @ 8:18 am

It is surprising how often the "progressive" agenda ends up hurting our neighborhood small landlords. The large, corporate landlords are the ones that benefit the most from the current system, and ironically, "progressives" are its fiercest defenders.

I don't think they do it on purpose, though. It's just sad.

Posted by Guest on Feb. 06, 2014 @ 4:50 pm

The reality is that everything progressives touch turns to shit.

Posted by Guest on Feb. 06, 2014 @ 5:03 pm

FWIW, Steven fabricated this part: "Those concerns have also been compounded as Airbnb is now being sued by one of Tobener's clients, Chris Butler"

If you look at the Chronicle article that Steven refers to it clearly says "Now Butler is suing the landlords for unjust eviction."

He is suing his landlords, not Airbnb. The Wired account says the same thing. Steven just saw what he wanted to see and then printed it here as the truth. But if you read any of the the accounts written by actual journalists you can easily see that Steven fabricated this part.

Posted by Guest2 on Feb. 04, 2014 @ 5:41 pm

filed against the evicting landlord in any event, regardless of whether the owner then rented through AirBnB or found his new tenant in any other way.

Steven once again is inventing falsehoods as a thinly disguised attempt to attack a popular mayor.

Posted by Guest on Feb. 04, 2014 @ 5:54 pm

Popular mayor? LOL!

Posted by marcos on Feb. 04, 2014 @ 6:35 pm
Posted by Guest on Feb. 04, 2014 @ 7:51 pm

You must not live in SF because every tenant I speak with is scared to death of an eviction, either because their unit might be sold to a TIC buyer or because the unit will be converted to a short-term motel room.

If Mayor Lee runs for office again he'll be lucky to get 20% of the tenant vote. He's offered them nothing but extreme anxiety. Between their eventual eviction or overseeing the building of either million-dollar condos or "affordable housing" units that few can qualify for (not to mention the lines are 5-10 years long), the mayor has made it clear with his policies that he's cleaning out existing tenants to replace them with new and improved, upscale brands.

You better get all the goodies you want from this current mayor and his slavish supporters working in various city departments and the BOS, because their time is ticking away. Tick. Tock.

The world has changed since the last election. Between Snowden's disclosures, the world finding out that 85 people hold as much wealth as 3.5 million people, and the residue of Occupy's 1% meme, there will be significant changes to political regimes across the country in the next few years, perhaps as big as the electoral changes post-Watergate. Tick. Tock. It's time to get those get-away homes in Aruba and Aspen ready. You're going to need them.

Posted by Guest on Feb. 04, 2014 @ 9:10 pm

That's some seriously wishful thinking.

Posted by Snoozers on Feb. 04, 2014 @ 9:48 pm

Lee will easily win what will be a third term.

Posted by Guest on Feb. 05, 2014 @ 8:19 am

There are two outlying polls, one at 51% and one at 73%, which can probably be ignored.

He bear Avalos 60-40 in the runoff so there is a clear "3 out of 5" bedrock of support for our "gets it done" mayor.

Posted by Guest on Feb. 05, 2014 @ 8:57 am

so how could "the people" elect Lee again.

Unless "the people" are fooled and duped yet again.

Posted by guest on Feb. 06, 2014 @ 5:21 pm
Posted by Guest on Feb. 07, 2014 @ 7:50 am

Airbnb is named as a co-defendant in that case, so Butler is suing both his landlord and Airbnb. Not only was there no fabrication involved, I have done more in-depth journalism on this issue than either the Chronicle or Wired, which are both now playing catch-up to the reporting that I've been doing for almost two years.

Posted by steven on Feb. 10, 2014 @ 12:51 pm

the real defendant, and especially if they have deeper pockets than the plaintiff. It does not follow from that that AirBnB has any liability here and in fact I would be shocked if even a SF jury found so.

Posted by Guest on Feb. 10, 2014 @ 1:59 pm

This idea that neighboring apartments are being rented out to short-term transients is deeply troubling. Not only is there a public safety issue since the transients don't have to register with the police, but no one has any idea of the condition of these units or how many there are.

The fact these fly-by-night businesses are going on without any city registration system and monitoring is beyond me. Why the city even allows landlords to operate in town without registering their units is equally boggling.

For at least the last 10 years housing costs and availability have been at a crisis level. The city needs to get a much firmer grip on information concerning its housing stock, and how it's being used and possibly abused.

If the city is going to allow these short-term rentals, there should be fees to cover extra police, health and safety inspections and the costs to monitor these new neighborhood businesses. A mandatory registration system is also required, with stiff penalties to landlords for non-compliance. Companies that facilitate these transactions (including craigslist), should also be subject to severe penalties for not insuring compliance with registration and mandatory safety checks for any short-term rental unit listed on their websites.

Posted by Guest on Feb. 04, 2014 @ 7:15 pm

have a visitor in your home. What kind of "Big Brother" society do you wish for?

Posted by Guest on Feb. 04, 2014 @ 7:55 pm

If you are charging someone to occupy either your home or apartment..even a room. You are functioning as a for pay lodging. How is it fair that hotels are required to pay occupancy taxes and for pay "guests" are exempt

Posted by Guest on Feb. 05, 2014 @ 7:57 am

have someone staying in my home, regardless of whether they pay me or not.

Even if the courts agree that TOT is due (doubtful IMO) it is sufficient to pay that tax annually. Still no need to report stays as they happen.

Posted by Guest on Feb. 05, 2014 @ 8:29 am

relevant or appropriate in a home stay.

By your argument, roommates should register with the city and apply to the city to find a replacement roommate. Good luck with that.

Posted by Guest on Feb. 05, 2014 @ 6:57 pm

I personally believe that AirBNB guests should pay the TOT tax. But there is a reason why it is not a slam dunk.

Suppose I have a 2 bedroom home that I've been paying RE taxes on for years. Then my child leaves town to go to college, leaving the second bedroom open. I don't get a reduction in my city RE taxes because my offspring is no longer using city services.

So why can't I find a replacement? I'm still paying the city for police, fire, etc at a level that is commiserate with my property.

If I took in a border for 6 months the city wouldn't ask for any additional money. So why ask because someone is there for 3 days.

Just saying, there is a reason why AirBNB has held up on agreeing that TOT is required.

Posted by Guest2 on Feb. 05, 2014 @ 7:16 pm

They are usually called boarders or lodgers. They've been around since forever.

AirBnB is not the issue here since they are just one of many ways of host and guest getting together

Personally I do not believe that TOT will be found to apply here when this finally goes to court. But either way, it's not about AirBnB

Posted by Guest on Feb. 06, 2014 @ 2:25 pm

Yes, it's true, if I want to let someone stay in my home, it's none of your damn business.

Posted by Guest on Feb. 04, 2014 @ 7:56 pm

with authorities too. It's not a coincidence progressives would like the same rules - they find much to be admired about the fascist (in the words of Susan Sontag) system which governed every area of people's lives in the former eastern bloc.

Posted by Guest on Feb. 06, 2014 @ 5:22 pm

comes and goes in your own home.

Sorry, but their jurisdiction stops at my front door.

Posted by Guest on Feb. 07, 2014 @ 7:49 am

A while back, the city of San Francisco passed a law that allowed tenants to add someone to their lease without the landlord's approval. I've used it myself -when my significant other moved in with me, I didn't feel I needed to get my landlord's approval for my relationship, and I was glad that city law protected us. It's hard to imagine that a right so basic as this requires a law, but in many places you can't do that. Of course the same people you see in this comment thread were squealing like stuck pigs when the city increased freedom for people in this way. Oh, but if you try and interfere with the Sacred Right to Profit, which is apparently now enshrined in the Constitution (somewhere, though still no one can find me the section), oh well that's fascism! Or communism, or something. Get a grip, people. I don't think it's unreasonable to tell people that certain places are inappropriate for turning into a hotel zone.

Posted by Greg on Feb. 07, 2014 @ 8:55 am

You are claiming a right to have a person live in your home while at the same time trying to stop me exercizing that exact same right.

Posted by Guest on Feb. 07, 2014 @ 9:40 am

I'm talking about someone actually living in my home. You're talking about running a business.

Nobody has a right to interfere with your personal relationships, but it's reasonable for the government to make time, place and manner regulations of commercial activity.

I can let whoever I want live with me, but I can't turn my home into a boarding house, hotel, or hostel. Those are very different things.

Posted by Greg on Feb. 09, 2014 @ 1:08 am

When I do a short-term let (usually not thru AirBnB, by the way) then that person is living in my home for the duration of the let.

Whether that guest stays for a day, a month or a year really isn't material.

Posted by Guest on Feb. 09, 2014 @ 8:01 am

It's about whether or not you're running a business. I think I made that clear enough. I don't think you're *that* stupid. You just want the last word. Fine. go ahead.

Posted by Greg on Feb. 09, 2014 @ 8:50 am

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