San Francisco tightens 'Airbnb law' with new amendment

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San Francisco's board of supervisors passed an amendment on Tuesday tightening the rules governing short-term room and home rentals in the city. This means people offering accommodations through Airbnb -- a popular room- and home-sharing platform -- may face closer scrutiny.

San Francisco is one of the first cities in the world to make short-term rentals legal. Last October the city passed a law that lets people rent their rooms or homes for up to 90 days per calendar year. And hosts present during home-stays can lease rooms year round. The law also requires that all Airbnb hosts sign on to a city registry, collect transient occupancy taxes and carry liability insurance.

Within months of the law's passage, however, housing advocates and others were saying it didn't do enough to protect renters and landlords and to preserve low-income housing. By the spring, two separate amendments had been proposed to tighten the law.

The board of supervisors considered both amendments on Tuesday and ultimately voted to pass the more lenient of the two, which was authored by Supervisor Mark Farrell and Mayor Ed Lee. This amendment requires that an Office of Short-Term Rental Administration and Enforcement be created impose the law, but a cap on how many days people can sublet their homes will remain at 90 days per year.

"Home-sharing is here to stay in our city," Farrell said during the hearing on Tuesday. "The proposal in front of me today builds on our current law."

The amendment that did not pass Tuesday, introduced by Supervisor David Campos, aimed to put a 75-day limit on short-term rentals per calendar year, while also requiring Airbnb to file quarterly reports to the city.

"Hundreds of hosts are disregarding the current law. That law is simply broken," Campos said during the hearing. "I support home sharing, but there has to be limits."

To get the "Airbnb law" passed in San Francisco, city legislators held countless meetings and forums over more than two years. To legalize the service, lawmakers had to amend its citywide zoning laws to allow for short-term rentals. Under the old law, temporary rentals were seen as commercial businesses and therefore not allowed in neighborhoods or buildings zoned for residential use.

The bill faced strong opposition from landlords, affordable-housing advocates and neighborhood associations. Many of these critics said the proliferation of short-term rentals on Airbnb contributed to the city's already tight housing crunch.

For its part, Airbnb says short-term rentals help "home sharers" make ends meet or pay off their mortgages, and they also bring in more visitors to cities where people might not be able to afford high-cost hotels. Airbnb didn't return request for comment for this story.

Besides the two amendments, the short-term rental law is facing other opposition. A coalition called Share Better San Francisco turned in nearly 16,000 signatures for a November ballot measure last week that also aims to curtail the bill; the San Francisco Department of Elections announced Tuesday that this measure is officially qualified for the ballot. This measure is nearly identical to Campos' amendment and aims to put a 75-day cap on all short-term rentals, whether they're hosted or not.

Because the new amendment passed Tuesday keeps the 90-day cap for unhosted rentals and lets hosted rentals happen year-round, co-founder of Share Better San Francisco Dale Carlson said it will be difficult for the city enforce the law.

"The Lee-Farrell legislation is an empty shell," Carlson said. "Pray tell, how is the city to determine when a host is sleeping in her own bed each night?"

As cities around the world are figuring out how to best legalize short-term rentals, Airbnb's business has been booming. It now offers more than a million listings with hosts in 34,000 cities in nearly 200 countries. The company takes a cut of every rental -- typically between 9 percent and 15 percent -- fueling its value to investors. Airbnb has raised $2.3 billion since its founding in 2008, giving it valuation of $25.5 billion. That makes Airbnb the third highest-valued venture-backed companies in the world, after China's mobile phone maker Xiaomi and ride-hailing service Uber.

Update, July 15 at 10:15 a.m. PT: Adds comment from co-founder of Share Better San Francisco Dale Carlson.