“SF Pushing Changes to Affordable Housing Requirements, Short-Term Rental Rules”

SF Examiner, April 26, 2016

Ushering in a new era of housing policy, San Francisco has proposed a tougher rule on short-term rentals like Airbnb and will vote today on legislation to increase affordable housing requirements.

Legislation from supervisors Aaron Peskin and Jane Kim would impose new affordable housing requirements on development, should voters in June approve Proposition C, a charter amendment that would allow the Board of Supervisors to adjust the requirements rather than voters, who currently have that power.

With thousands of homes wending their way through the planning process and the future of development at stake, the board is poised to vote on the legislation today after it advanced Monday out of the board’s Land Use and Economic Development committee.

The law would impose a 25 percent affordable housing requirement for new developments with at least 25 homes. The current requirement is 12 percent for projects with at least 10 units.

While last week the committee hammered out controversial details of grandfathering provisions, on Monday Supervisor Scott Wiener outright opposed the legislation, arguing it could mean a “de-facto moratorium,” even though he has endorsed Prop. C.

Wiener said he had concerns the 25 percent could render future development unfeasible. “We’re finally starting to see rents leveling off in San Francisco because we have been producing more housing over the last few years,” Wiener said. “We should be waiting to see what the [economic] feasibility shows.”

The legislation requires the City Controller to issue by July 31 a feasibility study of affordable housing requirements.

In addressing Wiener’s concerns, Peskin said, “We should be very proud of” the legislation. He said the pipeline projects were “treated lightly,” facing increases between 1 percent and 2.5 percent on top of the existing 12 percent requirement.

“We’ve got four years worth of projects already in the pipeline,” Peskin said.

Peskin also objected to Wiener’s housing supply-demand analysis, arguing that it wasn’t the building of more housing that has led to what Wiener called “rents leveling off” but shifting market conditions.

Under the proposal being voted on today by the Board of Supervisors, developments proposed prior to 2014 must comply with a 13 percent affordable housing requirement, 13.5 percent applies to projects proposed in 2014 and developers must hit 14.5 percent if filed in 2015. Projects in excess of 120 feet tall must hit 25 percent.

There are some 10,000 homes in the pipeline, and the new rates are expected to yield an additional 200 below-market-rate units.

Every unit counts

As San Francisco is poised to increase its affordable housing requirements, The City may also be ready to add more restrictions on short-term rentals like Airbnb, which have been widely blamed for gobbling up existing housing.

Today, Supervisor David Campos will introduce legislation to require websites like Airbnb to only list short-term rental opportunities with a verified registration number or face fines of up to $1,000 daily

“We believe that some 2,000 units of housing have been permanently taken off the market” by “unscrupulous speculators” violating the city’s short term rental laws, Peskin said. “Not all of the [short-term rental] operators are mom-and-pops trying to make ends meet.”

In his support of the proposal, Peter Cohen, co-director of the SF Council of Community Housing Organizations, referred to The City’s March housing balance report.

“We are losing three rent-controlled protected units for every four we build,” Cohen said. “We know that the short-term rental industry is part of that. How much of that we can’t know until we have an ability to have transparency.”

Airbnb said in an emailed statement, “While the legal enforceability of this proposal is questionable, Airbnb will continue working with our community to simplify the process and get hosts registered.”

Supervisors, however, said the proposal is legally defensible. The federal law in question says, in part, that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”