It is Worse Than You Think
I Have Read Prop F, and It is Worse Than You Think
Eric Meyerson

Fear And Legislating in San Francisco

Or Why You Shouldn’t Be Afraid Of Proposition F

Of all the measures on the San Francisco municipal ballot, Proposition F is undoubtedly the most contentious and misunderstood. It is a ballot measure on SF’s November 3rd municipal ballot that legislates STR (short-term rental) regulations. It aims to address some of the housing problems that arise from converting residential units to vacation rentals—Airbnbs limit supply in an already dense city and further drive up housing prices in the most expensive city in North America. Rental regulations like Prop F won’t solve the housing crisis but would set reasonable terms to curtail stresses caused by STR. It would only affect units that are rented out longer than 75 days a year, believed to be 1.5k units of the listed 5.5k units on Airbnb SF. Prop F isn’t expansive—it only applies to 0.1% of housing units. At least thats what we think, there’s little way of really knowing how many units are STRs. It also doesn’t address what happens when you find out that your neighboring unit is a popular brothel, or that the host kidnapped a guest. It really just helps the City identify which units are being used as vacation rentals and enforce egregious violators.

I like Airbnbs and most of my vacation stays have been in units that were rented out regularly. I’ve never rented out my room in Oakland on Airbnb as my landlord has the right of refusal and I imagine most of the Frisco residents expected to vote on November 3rd are similar, ie. they are vacationers who don’t have multiple units listed on Airbnb, nor are they running a bed and breakfast business on the sly.

So why is Prop F so divisive? Why has it become such a wedge issue, pitting neighbor against neighbor, and the City against the middle class and Airbnb?

F is for Financing

Let’s start by addressing the $8.5M campaign Airbnb has launched against Prop F through SF For Everyone, evangelizing a message that hotels, governments and neighbors are out to spy on honest residents and land them in jail. Does the Prop F, as Airbnb suggests, “require hosts to report where they sleep every single night of the year” or is it that the Short-Term Rental Administration and Enforcement Office is simply trying to go after “after egregious violators, those folks who have multiple units listed across the city”?

“Stringent regulations in the city would have minimal impact on the company’s bottom line. But what really matters here is the symbol — Airbnb can’t stand the idea of losing out to city regulation in its own backyard.”—Caroline O’Donovan, Those Controversial Airbnb Ads Don’t Appear To Have Hurt Airbnb’s Anti-Regulatory Campaign

In Canada there are campaign spending limits, approximately 70 cents per voter giving a theoretical limit, of about $21M of spending for each party for the entire country, the Liberal Party of Canada received about $9M in party level contributions. Airbnb by contrast has spent $12 per eligible voter to defeat Prop F. Intent as they are to stay unregulated on their home turf, at $12 a voter they would have to spend millions for any future anti-regulatory campaigns. With campaign financing reform a big issue, Airbnb is the latest startup to put their money behind politics by spending an obscene amount on a municipal election, not counting internal spending.

F is for Fear

It appears that 55% of respondents would vote against Prop F, keeping short term vacation housing regulations unenforceable in SF. How does a committee turn SF residents against reasonable rental regulations? Douglas Atkins, Airbnb’s Head of Community and author of The Culting of Brands: Turn Your Customers into True Believers, formulates a simple process for indoctrination that when applied to Prop F seems like:

  1. Getting residents to reassess their experiences and views on rental legislation
  2. Present Airbnb as an honest tax paying company with earthly concerns, like libraries and bike lanes
  3. Galvanize voters and Airbnb as victims, by demonizing hoteliers and portraying City regulations as draconian
“The response needs to be less about the proposition itself and more based around psychology of what is happening. And specifically, given the nature of the marketing strategies that Douglas Atkin appears to promote, it needs to draw the therapeutic literature about ‘cult survivors’.” — Colin Strong, Airbnb and Hotels: What to do about the sharing economy?

Back in Canada, during the final days of the recent election, the Conservative Party (through a political fixing scheme) chose to focus on the niqab (a full head covering) as a wedge issue. It was a controversial attempt to split the political unity of progressives given that only 2% of Canadian’s Muslim women wear it, or about 0.3% of the population. Despite it being a non-issue, the Conservatives still galvanized a majority of Canada to weigh in against niqabs. And though renowned political fixer, Lynton Crosby, used this issue to terrorize and exploit voters, they ultimately lost the election when the electorate grew wise to their political methods.

Likewise, it seems that Airbnb’s cultish counseling on Prop F has spread rampant distrust of City legislation and concerned neighbors, suggesting that these parties are out to make criminals of honest hard working middle class renters like you. Good folks like Emey worry that with Proposition F, “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.” But it’s not just the City that has it out for you San Francisco. Supporters of No on F “are asking Mr. Trump and Mr. Bortz to step out of the shadows and debate us on the merits of Prop F’s draconian regulations.”

Propositions versus Psychology?

Voting No on Prop F would be misinformed and a decision motivated by fear is no decision at all. The monied Airbnb campaign underscores why we need to address and reform campaign financing. In fact Prop F is a reasonable attempt to update legislation on STRs and a prescient attempt to address the housing crisis in SF. In regards to psychology, there too, it is a good attempt to do what legislation should do, which is to protect residents. I’m not sure how regulation or governance got a bad rep. We should assume that hoteling and residential laws are usually enacted for good reasons, namely to safeguard us, but Airbnb’s marketing team would have you believe that they are really the ones protecting you.

“Prop F holds corporations like Airbnb accountable by limiting ‘hosting platforms’ to listing only units that are properly registered with the City, so the city can enforce the law.” — Tim Redmond, The Truth Behind The Airbnb Lies

Now imagine a more likely scenario, one that is scarier than “phantom surveillance” and “draconian arrests.” Imagine that SF votes No on Prop F and more and more units are converted to STR without any oversight. Perhaps a home owner decided to convert a unit less than 100 feet from where you currently live because it was more profitable. Some weekends, the unit is occupied by elderly tourists while on other weekends, the unit hosts parties for startups. All of them have access to your building, and the residential zone you thought you moved into is now a pseudo hotel, maybe that isn’t such a problem. Soon after, your other neighbors decide to do the same and so on. Prop F asks residents of SF to consider whom they want manage such disruption. But in fact, the city voted No to Prop F so calling the Short-Term Rental Administration and Enforcement Office might help or you’ll try and call Airbnb’s customer service, maybe even talk to Brian Chesky. And then what?

Prop F lays out fair legislation to address the ramifications of a “sharing” economy on cities and asks companies like Airbnb to uphold its responsibilities as a business and service provider. A multimillion dollar campaign that portrays Prop F as draconian are not just misleading but entirely false. Prop F has no impact on units that are rented out for 75 days or less in a year, meaning that if you aren’t running a bed and breakfast business out of your home, you have nothing to worry about. What Prop F does is make existing laws enforceable. There is currently no way of knowing which units are STR, nor how many days in a year they are being rented out. And even with this information, there isn’t enough money to cover the administrative costs of enforcing violations. For example, only 10% of STRs in SF are registered with the city, making 90% of listings already illegal. Likewise, there is no way of knowing which listings exceed the current 90 day limits. One way Airbnb could comply with STR abuse is by sharing property data and only listing registered units. Same with the number of days, exceed 90 days (or the proposed 75 days) and you’re de-listed. Though, there are no limits if you’re operating under a bed and breakfast license.

After the ballots have been tallied, I really wonder if Airbnb’s fear inducing psychological campaign would have been worth the cost simply to avoid reasonable regulations. Does Airbnb really expect that the smart people of San Francisco will believe that Prop F leads to jail time, neighborhood spying and draconian roundups? Or that this is all some grand conspiracy by hotel magnates? I hope for Yes on Prop F but I expect the city will vote No, simply because political campaigners know how to fund wedge issues and rig ballots with fear.

Additional Reading:

  1. I Have Read Prop F, and It Is a Perfectly Normal and Reasonable Piece of Legislation by Zach Perez
  2. The Truth Behind The Airbnb Lies by Tim Redmond
  3. City of San Francisco Initiative to Restrict Short-Term Rentals, Proposition F by Ballotpedia
  4. Airbnb and Hotels: What to do about the sharing economy? by Colin Strong

Thanks to Vijit Hassar for editing, to Kelly Ellis for tuning me into this issue and to that guy at the bar I had a discussion with about Prop F. And Airbnb, if you’re looking for a product designer to explore compliance features, call me.