BUSINESS

San Francisco residents to vote on contentious Prop. F targeting Airbnb

It's not often a technology start-up — albeit one with a $25-billion valuation — makes it front and center in a city election. Then again, we are talking about San Francisco.

Tuesday, San Franciscans will head to the polls to vote on, among other things, Proposition F, casually known as the "Airbnb initiative."

The contentious proposition concerns regulation of short-term rentals in the city. It would toughen the rules that hosts and platform providers must follow, such as limiting the number of nights a unit can be rented each year to 75, and would require quarterly reports to the San Francisco Planning Department on how a unit is used.

It's an issue with which Angelenos are no doubt familiar. Santa Monica passed strict short-term rental rules in May, banning residents from renting out entire units, and Los Angeles announced it is considering similarly tough measures.

The difference here is that San Franciscans are turning to the ballot to decide how this should play out.

It may sound like a run-of-the-mill ballot measure, but in a city grappling with a housing crisis and the effect of a thriving tech hub, and with residents worried about privacy and wary of how their personal data are used, San Francisco is ground zero for a Proposition F freakout.

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Over the last few months, residents have been bombarded with television commercials describing Proposition F as "unnecessary" and "extreme" while also receiving campaign literature that describes it as a "modest measure."

Billboards sponsored by the No on Prop. F campaign, largely bankrolled by Airbnb, allege Proposition F will lead neighbors to file frivolous lawsuits against one another, while proponents of the proposition have written op-eds in the San Francisco Chronicle saying that if it weren't for neighbors complaining, the city wouldn't do anything about rental violations.

Opponents say existing laws are working. Proponents say existing laws are toothless.

Adding to the heat, many residents who previously didn't have an opinion on Airbnb recently developed one, after the short-term rental company posted ads in the city's Muni bus stops touting the benefits of its tax payments. Rather than inspire gratitude, residents found the ads passive-aggressive, and Airbnb was quick to withdraw them.

Although Airbnb appears to be Proposition F's target by virtue of its being both the biggest player in the short-term rental market and headquartered in San Francisco's backyard, the proposition's rules would extend to other short-term rental services such as HomeAway, VRBO and FlipKey.

Proposition F supporters say it's about time tougher rules are created. Laws enacted by City Hall this year have been weak, and companies like Airbnb have been skirting the rules with impunity, according to attorney Joseph Tobener, who represents the San Francisco Tenants Union (also a supporter of Proposition F).

"I think they're having a heyday right now because there's no enforcement," Tobener said. "There is no enforcement in the city at all right now. It's do whatever you want. Rent out as much as you want. No one is going to enforce it."

To Tobener's point, enforcement of existing laws that require short-term rental hosts to be registered with the Planning Department seems lax. There are an estimated 10,000 short-term rental listings in San Francisco. As of Thursday, the recently created Office of Short-Term Rentals had issued only 728 registration certificates.

According to office director Kevin Guy, most San Francisco listings on Airbnb are probably in violation of current law.

Guy said his staff of four people is prioritizing the "most egregious actors," such as those who post multiple properties on sites such as Airbnb but don't live in San Francisco.

The argument in favor of Proposition F is grounded in the belief that short-term rentals hurt the city's already limited housing supply. Rents in San Francisco have already skyrocketed, with the median price of a one-bedroom apartment tipping into $4,000 a month. If homeowners can make more money renting out their units weeks at a time, why bother with long-term tenants?

"We see about 6,000 people a year, and at least three a week talk about a unit in their building that is being Airbnb'd by the landlord," said Jennifer Fieber, policy director of the San Francisco Tenants Union. "So tenants are definitely worried that they'll be next."

Michael Rouppet was evicted from his rent-controlled home in September 2012 after a new owner bought the 1909 building. He learned from former neighbors that his place near the Painted Ladies Victorians had been turned into a short-term rental. In June, he sued the owner, alleging violations of rent laws.

"I would ask how many San Francisco residents have to be evicted to see the wisdom in regulating the industry," he said. The landlord's lawyer did not return phone calls and email for comment.

By limiting the nights a unit can be rented to 75 a year (down from the current 90 days allowed by existing regulation for rentals whose host is not present, and the unlimited number of days for rentals whose host is present), landlords will no longer have an incentive to reserve their units for short-term rentals, Proposition F proponents believe.

"Prop. F doesn't stop people from home sharing," said the proposition's author, Dale Carlson, who heads up ShareBetter SF, the organizing group behind the initiative (which is largely funded by community organizations, the hotel and restaurant unions, and the Hotel Assn. of New York).

Compared to regulations Santa Monica adopted this year, which bans short-term rentals whose primary resident isn't present (the city of Los Angeles is considering similar laws), proponents believe Proposition F is fair.

"You can still rent out your place 75 nights a year," Carlson said. "And if someone wants to rent more than that, that's what bed and breakfast licenses are for. Go get one."

Opponents aren't convinced, though, and describe Proposition F as a desperate, knee-jerk reaction to the city's housing crisis.

"That's one of the most disappointing parts of Prop. F," said Patrick Hannan, campaign manager for No on Prop. F. "It disingenuously asserts it addresses the housing crisis. The housing crisis will not go down because of it. Thousands of apartments will not suddenly become available. They're selling a fairy tale."

Citing internal data, Airbnb spokesperson Christopher Nulty told The Times that more than 90% of Airbnb hosts rent out their primary residence. According to the company's own research, a host in San Francisco would have to rent out an apartment on Airbnb for at least 211 nights each year before making more money from a short-term rental than a long-term tenant.

From June 2014 to May 2015, only 348 listings for an entire unit exceeded that threshold, Nulty said, so the idea of thousands of homes taken off the long-term rental market for Airbnb is false.

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Opponents don't have a problem only with the 75-night limit, though. Proposition F would require hosts and hosting platforms to report when and for how long their units are rented out, and when the hosts themselves occupy the unit. Such requirements would help determine whether the 75-night cap has been exceeded.

For Peter Kwan, a San Francisco retiree and founder of Home Sharers of SF — a community group where hosts meet to discuss home-sharing best practices — such a reporting requirement is "troubling" and "intrusive."

"It's unprecedented in the way it violates the privacy rights of hosts," said Kwan, who occasionally rents out a spare bedroom in his North Beach home on Airbnb.

Current laws require hosts to disclose only how many nights a year a unit is used for short-term rentals.

Kwan is also worried about a provision in Proposition F that gives people a right to sue their neighbors for short-term rental violations, even if the city has found that no violation has occurred. He believes it could lead people to get litigious.

Proponents of Proposition F say no attorney in their right mind would pursue a case in which the city has already found no evidence of wrongdoing.

Opponents of Proposition F, like No on Prop F's Hannan, say "Well, we're in America, and we're in California."

In a San Francisco voter guide, independent urban planning group Spur listed pros and cons of Prop F. It ultimately recommended a "no" vote, if only because a ballot vote would lead to a permanent outcome that can be changed only by another costly ballot vote. For an issue as new as home sharing, the guide said, it makes more sense to adjust and improve existing regulation as more data become available.

And although proponents and opponents advertise and protest their way to Tuesday's polls, Spur had this to say: "We're staying out of this."

tracey.lien@latimes.com

Twitter: @traceylien

The Associated Press contributed to this story.

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