Regulate short-term rentals, protect SF’s housing stock!

24 09 2014

CCHO commends the Board of Supervisors for attempting to find a pathway to legalize and regulate a popular but currently illegal activity—the ability for owner-occupants and tenants to rent their units or extra bedrooms for a limited time during the year. However, as currently written, affordable housing advocates cannot support this proposal.

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At its most basic level, the proposed system lacks transparency and enforceability to prevent abuses of “the rules.” The profitable industry of short-term rentals presents the very real risk of continuing to erode the City’s housing stock for permanent residents and continuing to drive up housing prices. It would appear that the only supporters of the ordinance are companies in the home-sharing industry such as Air BnB and their front group, Homesharers of SF, which represent the interests of those who would presumably profit by this legislation. Most of the Planning Commission’s own recommendations have not been adopted, including two critical issues:

  • Tracking and enforcement, such as tracking the number of nights STRs are rented to the enforcing agencies, identify units in the City’s Property Information Map, making listing on a hosting platform without registration a violation, and providing adequate funding for enforcement by Planning
  • Maximum annual limit on “hosted” rentals

Following is a set of recommendations set forth by affordable housing advocates, that would begin to make this a workable piece of legislation:

  1. Enforceability. The crux of it all is the question of enforceability. We recommend that, in alignment with Planning Department’s own recommendations, the legislation should AT A MINIMUM, require monthly or quarterly reporting the number of nights STRs are rented to the enforcing agency, identify on the City’s Property Information Map units registered as STRs, make listing on a hosting platform without registration a violation, provide adequate funding for enforcement, and allow “private right of action” so third parties can sue violators to enforce the laws.
  2. Three-Year Sunset Provision. It is impossible to assess the unintended consequences of the blanket change to zoning definitions created by this legislation. Barring a more thorough review of these changes by land use category or geography, we recommend either a maximum cap on STRs by neighborhood and/or zoning district, AND/OR limiting the length of this legislation to a 3-year pilot, with a “hard sunset” provision, and requiring a thorough study of the impacts and unintended consequences before reauthorizing for more years.
  3. Maximum Annual Limit. Presumably, the primary reason people use “home-sharing” hosting platforms in the first place is to rent out an apartment or room while the permanent resident is away on vacation – and it seems far-fetched that many people in this city can take more than three or four weeks of vacation per year. Allowing up to 90 days of “short-term” rentals and unlimited year-round “hosted” room rentals creates a “market” temptation to profit from STRs, adding another incentive to raise rents, raise sales prices, and hold housemate bedroom rentals off the market. We recommend reducing the total duration of allowance for STRs to something more reasonably aligned with typical vacations, say a total 30 days per year, and no more than 90 days for “hosted” rentals.
  4. Prohibition on Subsidized Housing and New In-Law Units. The legislation as currently written, seems to allow anyone receiving the benefit of subsidies for permanent affordable housing, public housing, master-lease subsidies, or subsidized first-time homebuyer loans, to potentially cash in on these benefits for their own profit. We recommend adding a clear prohibition to exclude any units receiving City subsidies, in whatever form, from taking advantage of these public subsidies. Additionally, legislation recently passed by the Board of Supervisors to legalize in-laws and promote construction of new in-laws was meant to address the critical need to provide more housing supply for City residents, not to create small hotel units. We recommend that in-law units should also be prohibited entirely from use as STRs.
  5. Finally, tenant advocates have raised critical issues to protect tenants from possible eviction and to provide a “private right of action” without undue bureaucratic hurdles to ensure enforceability.

 

 


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