Airbnb has been reshaping the way San Franciscans think about property from the time the company was founded seven years ago. Since then, the company has grown, largely unregulated, to a $25 billion market valuation.
That makes it the most valuable hotel chain in the world, and Airbnb doesn't actually own any hotels.
But the downside of home-sharing has emerged—when housing is taken away from long-term residents, and turned into tourist lodging. Proposition F would tighten regulations on Airbnb and other short-term rental websites. It would limit rentals, it would track hosts, and it would encourage people to sue their neighbors who violate the law. Airbnb has already spent $8 million to defeat the initiative; the company is on pace to spend more than any other ballot campaign in San Francisco history.
The city’s planning department has said the current short-term rental law is unenforceable; it’s like stopping people from illegally downloading music. In order to promote enforcement, Prop F supporters want residents to call each other out.
"I think Airbnb is great on a part-time basis, it’s just the people that turn it into a business for themselves that ruin it," says one resident who asked to remain anonymous. Several of the neighbors in his building host short-term rental guests. He says at least one unit is occupied by tourists full-time.
"It's not good for the community to have strangers coming and going," he says. "But, no. I wouldn't sue them." His request for anonymity was, in fact, on their behalf. "I don't want to get them in trouble—if word got back to the landlord."
Dale Carlson represents the Yes on Prop F campaign. He says full-time short-term listings are the ones they’re after. The ones that are "investment properties, they’re apartments, they’re apartment buildings, they’re single family homes that have been converted to tourist accommodations," when they could be a long-term resident's home.
It’s hard to tell how widespread the practice is. Data extraction firms Connotate Inc. and Import.io were commissioned by the San Francisco Chronicle to crunch the numbers on Airbnb in San Francisco. Their minimum estimate was that at least 350 of Airbnb’s 4,500 listings are full-time short-term rental units. That doesn’t count other websites.
Carlson says, even if it's just a room in house, it shouldn't be used for short-term rentals. "Traditionally in San Francisco, the way people truly home-share, is they get a roommate." If you can’t commit to a room mate, he says fine, be a host. "Get your business license, get registered with the city and do it—75 nights a year. If you want to do it more intensively, go get licensed as bed and breakfast."
That’s the proposition. If hosts exceed the limit, or if the hosts don't actually live in the property they're renting, or if they're hosting without a license, they can be sued by their neighbors or busted by the city's office of Short Term Rental Registry.
But Carlson says, if websites cooperate—by reporting data and deactivating illegal listings—these extremes will be avoided. That’s why the initiative also enables the city to sue companies.
"If the city has the ability to go after Airbnb and the 60 other websites for listing unregistered units, there won't be any neighborhood lawsuits," says Carlson. "Airbnb doesn't give a rip about neighbors suing neighbors. Airbnb is worried that the city will come after them."
In order to enforce restrictions, Prop F would require hosts, along with websites, to report their booking data—the same way any business does. Patrick Hannan, who represents the No on Prop F campaign, says he is disturbed by that. "Under Prop F, San Francisco will be the only government in the world tracking where you sleep at night. Not Syria, not North Korea, not the Taliban, San Francisco."
The ordinance San Francisco passed last year already requires hosts to register and report booking data, but less than 15% have actually done that. Hannan says that's to be expected.
"The regulations are new, they're still being developed because," he says "it does take some time to refine things so that they actually work, not just for the government, but for the people."
The law is being refined; since 2014 there has been one amendment and a few other proposals. Unlike legislation, ballot measures are permanent. They can only be amended with another ballot measure. Hannan says it’s important to have flexible regulations that are able to keep pace with tech innovations. He predicts short-term rentals will evade regulations by simply moving to new unmonitored websites.
So, it's an epic battle. Thousands of residents use short-term rentals to help them afford to stay in San Francisco. Stronger regulations could significantly affect the number of properties on the market, putting millions of dollars at stake.
The ramifications go beyond the city; next week's vote could set a precedent for similar situations happening in tourist destinations with tight housing markets around the world.