Ask a Tenants Rights Lawyer: Airbnb & Short term Rentals in San Francisco

Ask a Tenants Right’s Lawyer is your chance to learn how to survive as a renter in San Francisco.  Attorney Daniel Wayne has a lot of the information you need to keep you in your home.  This week’s topic: AirBnB and Short Term Rentals.  Got a question? Send an email to alex@brokeassstuart.com and we will forward it on.

We were lucky enough to ask Attorney Daniel Wayne about the legality of renting out your flat in San Francisco, and what effect short term rental companies like Airbnb are having on our city and it’s housing market.

Q: Can I rent out my room or apartment on AirBnB without jeopardizing my tenancy?

A: Tenants ask me all the time if/how they can rent their place or a room in their place out on AirBnB or VRBO, and I tell them unequivocally not to do it. Theoretically, if you have your landlord’s consent (in writing) you could potentially do it, but the average landlord has no incentive to give you that permission. The February amendment to the SF Administrative Code (discussed further below) does not require your landlord to let you rent all or part of your place out and few landlords are going to help you make money renting their property. If your landlord finds out that you’ve rented your place out without his or her consent, s/he is required under the new law to give you an opportunity to fix or “cure” the issue before s/he can try to evict you. But the bottom line is, renting your place out short-term without your landlord’s consent can still get you evicted.  Regardless of whether you’re a landlord or a tenant, if you’re going to rent on AirBnB etc. you need to register your unit with the San Francisco Planning Department.

Q: What’s this “AirBnB law” or (short-term rental law) that went into effect in February 2015 all about?

From 2008, when AirBnB started, to 2014, anyone hosting guests via AirBnB was in violation of the SF Administrative Code, specifically Ch. 41A, which prohibited the use of a residential unit for occupancy for less than a 30-day term. Per a study conducted by the Chronicle in June 2014, there are almost 5,000 San Francisco homes/apartments/rooms available for rent on AirBnB. And another 1,200 second home units listed on rival, VRBO.com. All of which were being rented out illegally at the time. AirBnB lobbied heavily to get the city to relax these laws, and the SF Board of Supervisors modified the laws governing short-term rentals in October 2014 and the new law went into effect in February of this year.

Under the amended law, hosts can legally rent out a portion of their primary residence without restriction, and rent their entire unit up for 90 nights a year. Hosts are required to register their homes with the Planning Department and pay taxes on rentals to the city. The new law also created penalties for hosts who fail to pay taxes / register with the city. Of course no one has been following these new requirements so it was amended further still just last week.

Q: What SF laws (if any) is AirBnB currently violating?

A: AirBnB itself is not violating any laws. It’s the hosts using AirBnB and other platforms that have been violating the law. Until February any hosts renting on AirBnB were violating the laws. The issue all along has been that AirBnB encourages or is complicit in helping hosts violate the law. Despite the change in laws as of February, most users are still violating the laws. Of the approximately 5,000 hosts, something like 455 have actually registered with the city, and the city doesn’t have the capacity to actually enforce the law. Last week the Board of Supervisors made further changes to the law to try and beef up enforcement but it looks unlikely to have the desired effect.

Q: What effect does AirBnB have on SF’s housing supply?

This is really the crux of the debate, and there are differing answers depending on whom you ask. AirBnB would have you believe short-term rentals aren’t effecting supply at all, while others contend that short-term rental platforms are reducing available housing stock and driving up costs. AirBnB has refused to release data, further complicating the issue.

The City Budget and Legislative Analyst’s Office recently released a fairly damning report on the impact of short-term rentals on the housing market. While a reduction of 5,000 units or rooms may seem like a drop in the bucket, by comparison only 3,500 new units were built in San Francisco in all of 2014. Arguably hosts who rent out rooms on a more frequent basis are removing rooms they would otherwise fill with a roommate, while those who rent out their entire units are making the availability of rental units all the more scarce. Essentially short-term rental platforms dis-incentivize people from participating in an already crowded rental market.

 Q: What’s next? What do you think the city needs to do to fix this?

The current laws don’t have enough muscle to ensure compliance by hosting platforms such as AirBnB or the people who utilize them. There is no way to prevent hosts from renting out their entire units year round. Supervisor David Campos has been a vocal supporter of further reform. There is a ballot initiative co-written by the San Francisco Tenant’s Union that Supervisor Campos and housing advocates (myself included) strongly endorse that will be on the November ballot. The initiative would limit all rentals (full unit or single room) to 75 nights per year and force hosting platforms such as AirBnB to insist that users comply with the laws. You can find out more at: http://www.sharebettersf.com/

DISCLAIMER: The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed nor should any such relationship be implied.