Disclosure: I’m a long-time SF resident who wants people to read things before they vote on them, especially if they’re really hard to fix. I was not compensated by anyone for anything you’re about to read. There’s more about me at the end of the post, if you’re interested.
Update, Sept. 27: Since this blog post went viral, the Share Better site finally added a link to the legal text of Prop F.
Update, Oct. 15: Here’s a fresh exploration of the months-long PR campaign against Airbnb and how one company is impacting housing in SF: Why Are People So Pissed Off About Airbnb?
Last update: No matter what you read about the reasonableness of Proposition F as “legislation,” remember that unlike regular legislation, a ballot proposition cannot be amended by any legislature. Everything we pass as a ballot initiative is permanent, unless we go through this whole ballot process again. Every error, every miscalculation of behavior, ever overreach is basically written in stone. This is the major theme of the SF Chronicle’s rejection of Prop F, which I definitely recommend reading as well.
Early this summer, I was approached outside BART by a man with a clipboard, collecting signatures for a ballot initiative.
“It’s for affordable housing,” he promised.
I don’t often sign ballot petitions, but I decided to peek at what he was collecting. And it took a fairly close reading of the documentation to see he wasn’t actually collecting signatures for an affordable housing initiative, but for a “City and County of San Francisco Ordinance Amending the Administrative Code with respect to Short-Term Residential Rentals.”
This came to be known as “the Airbnb law.” And later, Proposition F.
I have read this proposition in full. And I’d like to share where it came from, what it says, and finally, why the key enforcement mechanism in it is designed to fail.
You may or may not have heard that short-term rentals (STRs) are already regulated in SF. Earlier this year, the City passed a new law regulating homesharing that makes full-time vacation rentals illegal, and makes the rest subject to a regime of reporting, insurance, and tax requirements.
In July, the Board of Supervisors responded to the inevitable unintended flaws in this new law by tightening the regulations and setting up an enforcement office.
Proposition F seeks to replace this law, just a few months after it went into effect, with something far more draconian. Its mechanisms are based entirely on how one company — Airbnb — does business in 2015. Unsurprisingly, Airbnb is the primary funding source for all those No on F ads you’re seeing around town. But Airbnb is one of more than 50 companies, including Craigslist, on which you can find temporary housing in SF.
As with all ballot initiatives, Prop F cannot be amended or reversed, which is why I tend to vote against most ballot props. If you want to regulate a highly dynamic new market like short-term rentals, the ballot is probably the worst possible way to do it. This is not a controversial opinion — even the SF Chronicle editorial board agrees. (Imagine if we were living under the “MySpace Law” of 2006, eh?)
If you live or work in SF, by now you’ve heard a lot of messaging from both sides. But you probably haven’t read the actual initiative. That’s okay; it’s not your fault. It’s actually really hard to find the text online. (Update: since I published this, the City has finally posted all the ballot texts online.) So below, after a brief history of this Prop, I’m going to show you some of the actual contents of Proposition F. (You can read along here.) The ballot summary really doesn’t draw an accurate picture.
Stick around. It’ll blow your mind. But first, some quick context.
Where Did Prop F Come From?
Getting propositions on the ballot isn’t free. Prop F is funded by a group called Share Better. Before they changed their message to “affordable housing,” “stop evictions,” and “keep transients out of our neighborhood,” their message was mostly about how icky Airbnb rentals are. It’s almost as if they’re funded by hotel interests or something. (They are.)
Update 10/27/15: The NYC Hotels Association has decided to throw in $250,000 to support a final-week TV push to pass Prop F.
Here, watch Share Better’s first video. See if you can spot anything about housing affordability. Spoiler: You won’t.
Now, Share Better is putting everything it has behind Prop F. When you read what’s actually in the proposition, it’ll become very clear whom it would benefit if passed. (Here’s a hint.)
One would think that Share Better would be encouraging you to read the text of the thing they want you to vote for. But the text of the Proposition isn’t available anywhere on their site. You can’t even find a link to it.
And if you read on, you’ll see exactly why they don’t want you to read the text. Because Prop F isn’t just the “reasonable 75-night cap” they’re advertising. It’s a toxic mess of new legal risks for San Franciscans.
What Exactly is in Prop F?
Let’s get to the text. Once again, here’s the link to the text that Share Better submitted to the City, if you want to read along. (Bold added for emphasis.)
(a)(1) It shall be unlawful for… any Permanent Resident, person or entity to offer, or to assist anyone to offer, a Residential Unit for rent for Tourist or Transient Use
(2) any Permanent Resident, person or entity to offer, or to assist anyone to offer, a Residential Unit for rent to a Business Entity that will allow the use of a Residential Unit for Tourist or Transient Use
Quite simply, you don’t have to be operating a hotel out of your house to be breaking this law. In fact, it’s really easy to break this law. All you have to do is “assist anyone to offer” a home for a rental of less than 30 days, and you have violated the law!
What does “assist” mean? Cleaning a house before guests arrive? Proofreading someone’s listing? Helping a family member find temporary housing? Nobody knows because it’s undefined in the text, even in the lengthy Definitions section. The judge will decide what it means.
(Update, 10/29: We have a possible answer to the above. A SF resident is being sued by a neighbor under the current law for unlocking a door for her friend’s guest. And the financial incentive to sue isn’t even in place yet — more on that to come.)
Read on, and you’ll see what else is terribly wrong.
Yes, Prop F Creates New Legal Grounds to Spy and Sue. Spying Optional.
The No on F campaign has made a lot of hay out of the “financial incentive to spy on neighbors.” What exactly does that mean?
Here we go — the best part, the “Private Right of Action.” If a cranky neighbor of yours (anyone who lives within 100 feet of your home) thinks people who aren’t on the lease might be staying with you, or if you might have “assisted” with such a temporary stay, or if they just want to mess with you, they can file a complaint with the City, which the City is compelled to investigate. The “violation” could have happened any time in the past year.
This is where it’s clear the authors overreached and created a toxic spill waiting to happen.
If the City finds you did indeed host someone or assisted someone else as such, even for one night, then the City can take action against you. OK, makes sense.
But then it gets absolutely bonkers. If you didn’t host anyone, or it was just your Aunt Rose visiting for the weekend, then your cranky neighbor can still sue you anyway, and the City has to help them do it. And we’re not just talking about filing suit so the City can collect its fines and fees, but filing for “special damages” that the neighbors get to keep for themselves. Behold:
(f) If the Director determines no violation has occurred, the Director shall, after consultation with the City Attorney, notify the complainant/Interested Party and respondent and shall dismiss the complaint. The complainant/Interested Party may, after notification of the Director’s determination to dismiss a complaint, bring a civil action in an appropriate court against the respondent or any person or any entity that assisted the respondent. A prevailing complainant/Interested Party shall be entitled to an award of actual damages, attorneys fees and costs and special damages of not less than $250 and not more than $1,000 per violation per day.
Now, even though you’re cleared by the City of any wrongdoing, you’re still on the hook to pay off your neighbor, plus their legal fees. Can you claim any legal fees if you’re innocent? Nope!
You may have heard about the housesitter who rented out a home while the owners were off at Burning Man. In that case, the housesitter already broke the existing law because he wasn’t a permanent resident of the house. But under Prop F, all of those homeowners’ neighbors would have new legal grounds to sue the homeowners themselves.
(Proponents of Prop F say that we can trust lawyers not to abuse this new legal framework. Okay.)
Hi, Dad. I’m in Jail.
But wait, there’s more! How do you feel about criminal penalties?
(j) Criminal Penalties. Any Owner or Business Entity who rents a Residential Unit for Tourist or Transient Use and/or any Hosting Platform that lists a Residential Unit for Tourist or Transient Use in violation of this Chapter 41A without correcting or remedying the violation as provided for in subsection 41A.6(b)(7) shall be guilty of a misdemeanor. Any person convicted of a misdemeanor hereunder shall be punishable by a fine of not more than $1,000 or by imprisonment in the County Jail for a period of not more than six months, or by both.
Six months? That’s, like, barely enough time to be forced into one of the SF jail’s infamous fight clubs.
Do I really think a judge would put someone in jail for renting a room? I don’t know. But it’s in the Prop, so it’s law. This is what we’re voting on, folks.
Oops, You Broke a Law You Didn’t Know About
How many ways can you unintentionally violate the law if Prop F passes? So many ways! In addition to the intense, onerous registration and renewal requirements, there are all kind of compliance requirements. Here is just one example…
(b) Any Permanent Resident offering his or her Primary Residence as a Short-Term Residential Rental shall… submit quarterly reports to the Department setting forth the number of days per calendar year he or she has occupied the Residential Unit, and the number of days per such quarter, with dates and duration of each stay, the Residential Unit has been rented for Short-Term Residential Rental Use.
If you host someone in a room in your home for less than 30 days, you best not miss a quarterly report of dates and durations. You’ll be violating the new law. This is just the tip of the iceberg. Click on this to download and read Prop F. You almost can’t not break this proposed law.
New Restrictions on Who Can Stay in Your Home
Okay, enough of the consequences. Let’s get into the new restrictions on the place you call home. Do you live in an in-law unit? Do you own a place with an in-law? There are close to 50,000 of them in SF, so it’s certainly possible. Legally, in-laws are called “Accessory Dwelling Units.” And…
(l)(1)(G) …an Accessory Dwelling Unit may not be listed or rented as a Short-Term Residential Rental
Clear as day. In-laws are banned from being rented out. Doesn’t matter if you own one and normally have your actual in-laws stay there, or if you’re a renter with your landlord’s permission who wants to host when you go out of town for a few weeks. It’s banned. If you do it, your neighbor can sue you, and you could maybe go to jail. Why are in-laws banned, even for one night per year? Nobody knows.
A Car Without Wheels
I want to close with what seems to be the biggest enforcement failure in the whole law. It’s one that demonstrates willful ignorance of how private companies operate and one that will make this law completely unworkable.
(4)(B) Every Hosting Platform that lists a Residential Unit located within the City and County of San Francisco as a Short-Term Residential Rental… must immediately cease listing in any calendar year any Residential Unit after said unit has been rented as a Short-Term Residential Rental for 75 days during such calendar year
I mentioned before that this “Airbnb Law” assumes that Airbnb is and will be the only company offering STRs in SF. As you can read above, this law puts responsibility upon any company that “lists” a rental to know how many nights a private room has already been rented from all other websites (which currently number more than 50 in SF). That’s right, Airbnb needs to know how many nights a room was rented on Craigslist, VRBO, and every other site on the Internet, in real time.
How would this requirement possibly work? It won’t. It can’t. It’s not supposed to.
Built to Fail
Whether by design or negligence, Prop F is built to fail. I hope the above excerpts have convinced you that Prop F isn’t meant to “reasonably regulate Airbnb rentals,” but to end them.
Because of how sloppily it’s written, however, innocent people can also expect to be stuck with nasty consequences, too. And unlike the existing law that was just amended by our elected officials, Prop F cannot be fixed or amended, except by another ballot proposition. So we can do this again in a year after all the consequences — intended and otherwise — seep across our neighborhoods.
Or, we could just vote “no” and continue to expect our elected officials to do their jobs. Then the Board of Supervisors can change the law whenever new companies arrive and totally blow up Airbnb’s model, which is inevitable. This is San Francisco, after all.
If You Agree…
I do not work for Airbnb, nor have I been compensated for anything I’ve written here or any political work I’ve done, ever. If you’d like to see a rundown of the accusations against me as a result of this blog post, I’ve compiled them here.
I do not mean any disrespect to people who have volunteered on behalf of Prop F. This whole region is stressed out by the accelerating cost of living, and I appreciate that people are trying to find solutions, even though it’s clear to me that this isn’t the right way to do it.
I used to be a part-time homesharer — or whatever you prefer to call it. My family and I live in a home with an extra bedroom that is often occupied by our own visiting family. When we’ve rented the room, we’ve complied with City laws, and we went through all the trouble and expense of registering as soon as the Planning Office made it possible. I’ve also found temporary housing on Craigslist, and rented vacation homes on VRBO for years. If you think any of this has impacted my ability to read the proposition, I welcome your comments.
My listing is no longer live, so my primary interest in the issue is as a San Francisco resident who would have to live under this law. As soon as I read the contents of Proposition F, I had to get involved. I hope you feel the same way. Thank you. Please vote no on Prop F.