Effective Feb 1, 2015, legislation allowed restricted short-term rentals (rentals for less than 30 nights). On July 14, 2015 amendments that were bad for tenants were approved by Airbnb supporters San Francisco Supervisors London Breed, Scott Wiener, Malia Cohen, Mark Farrell, Katy Tang, and Mayor Ed Lee. Short-term rentals reduce the housing stock by up to 43%. Also, Airbnb had been operating illegally by not paying taxes as well as illegally listing unregistered short-term rentals and enriches investor Ron Conway who funds legislation and politicians (such as London Breed, Scott Wiener, and David Chiu) against tenants. On June 7, 2016, amendments approved unanimously by the San Francisco Board of Supervisors (with Mark Farrell recusing himself due to business interests in short-term rentals) were passed. The amendments finally give the city the ability to penalize the hosting platform such as Airbnb for listing illegal unregistered short-term rentals. Fines are being levied for thousands of dollars at $500 per day. The October 2016 proposed amendment introduced by Supervisor Breed (under pressure for re-election) to cap the short-term rentals at 60 days a year was vetoed by Mayor Lee. More information on the effect on housing by short-term rentals in the San Francisco Chronicle article.
The push to regulate short-term rentals was accomplished by an unusual and temporary coalition, SharebetterSF, which included tenant advocacy groups such as the San Francisco Tenants Union, the San Francisco Apartment Association, hotel labor union UNITE HERE, Local 2, neighborhood associations and elected officials.
Tenants as Hosts
Renting space in your apartment, whether you are on the premises or not, is an extremely risky venture without the permission of the landlord. To participate legally in the new system, all hosts MUST Register with the San Francisco Planning Department before listing on a website. Some of the requirements for the host are:
- Provide a copy of the rental agreement to the Planning Department. The landlord will be notified by the Planning Department of the application for short-term rentals. The landlord has the right to deny permission if the rental agreement includes a no subletting clause.
- Charge no more than their rent, pro-rated for the month. In other words, if the rental is for 7 days, the host can only charge for the amount of rent the host pays the owner for the 7 days out of the month. (SF Administrative Code § 37.3(c)).
- Show proof to the Planning Department that the unit for rent is the host’s primary residence. Only one tenant in each residential unit qualifies to be a host.
- Show proof to the Planning Department of at least $500,000 in liability insurance.
- Obtain a San Francisco Business Registration Certificate from the San Francisco Treasurer and Tax Collector’s Office to pay the hotel tax.
- Resolve code violations for the entire property.
- Pay a $250 fee to the Planning Department for permission for two years.
- Condo dwellers and buildings with homeowners associations should check their rental agreements because there may be additional prohibitions that override the legislation.
- Public housing and units in Below Market Rate programs are not eligible.
Most leases prohibit subletting. Some landlords are looking for any excuse to evict so they can raise the rent. Tenant lawyers have reported a rash of eviction notices related to short-term rentals done without the landlord’s permission.
Owners as Hosts
- Property owners can only list their primary residences. This means they cannot run a hotel out of any extra unit in your building that they do not live in.
- Most likely, unscrupulous owners will have a relative or friend register units which the owner controls. If you suspect that your landlord or a landlord within 100 feet of your residence is running an unsanctioned hotel, please report it to the Tenants Union. You can also report it directly to the city, however, we would also like to know.
If you have evidence or suspicion that you or other tenants were forced out of a rental apartment so that the owner could turn it into a vacation rental, there may be a case for a wrongful eviction lawsuit. The displaced tenant should seek advice at the Tenants Union.
Tenants who do not obtain landlord permission are subject to eviction proceedings although there may be a chance to cure the offense. Violations can result in fines up to $1000 per day for the period of the unlawful rental. Any monetary award obtained by the city shall be used for enforcement of San Francisco Administrative Code Chapter 41A. The city is also able to penalize the hosting platform for listing unregistered units.
Landlords, annoyed neighbors and homeowners associations are reporting illegal vacation rentals to the Planning Department. The Office of Short-Term Residential Rental Administration and Enforcement has been created to investigate vacation rentals.
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