Caldwell 2015 Short-Term Rental Report

1

Summer 2015 Enforcement Intern
Alexandra Caldwell
Data
and
Analysis
Report
on
Short-‐
Term
Rentals
in
San
Francisco

2

Table of Contents
Abstract………………….…………………………………………………………………………….….. 3
Suffixes……………………………………………………………………………………………. 3
Overall Issue……………………………………………………………………………………… 3
Major Concerns…………………………………………………………………………………... 3
Part 1: The Data………………………………………………………………………………………….. 3
Hearings and Legislation ………………………………………………………………………… 3
Who are the Hosts?……………………………………………………………………………….. 5
Figures 1 and 2—Representing STR’s in each Zip Code…………………..…………………….. 6
Percentage of STR’s in Each Zip Code…………………………………………………………… 7
Supervisor Districts………………………………………………………………………………. 7
Figure 3: Total Applications in Each Supervisor District……………………………………….. 9
Figure 4: Total Approved Applications in Each Supervisor District ………………………....... 10
Figure 5: Total Denied Applications in Each Supervisor District…...…………………………. 10
Figure 6: Total Number of Applications to Register……………………………………………..11
Figure 7: STR Hosts who have Lived in the Same Place in SF by Zip Code…………………..…11
Number of STR’s on Each Street………………………………………………………………... 12
Part 2: The Analysis
Hearings and Legislation……………………………………………………………………….. 13
Enforcement Policies in Other Major Cities…...……………………………………………….. 15
Figure from LAANE Report: Percent of Listing Type by City………………..………………… 20
Part 3: Conclusion…………………..………………………………………………………………….. 21
Endnotes…………………………………………………………………………………………………. 23

3

Abstract:
This report will define both legislative proposals put forth to Ordinance No. 218-14. The
amendments proposed by Mayor Ed Lee and Supervisor Farrell, as well as Supervisor Campos’
amendments regarding short-term rentals will be defined. The purpose of this report is to provide the
Planning Commission with information regarding the average “type of host” that is currently using their
home or apartment as a short-term rental platform in the city and county of San Francisco. Current
enforcement mechanisms will be compared between major cities such as Los Angeles, New York City,
Portland, and Austin, exploring which cities has seen the most effective method of enforcement. This data
has been gathered and analyzed from the Planning Department’s registered short-term rental
applications. All information was given voluntarily by short-term rental applicants. (Whether or not our
records will conclude that there is an average “type of host”) the goal is to provide an unbiased report
that will offer the Planning Commission data, in an attempt to understand who these hosts really are.
Suffix’s used in Report:
Ø STR: Short-Term Rentals
Ø BLA: Budget and Legislative Analyst Report 2015
Ø DBI: Department of Building Inspection
Overall Issue:
Ø Short-term rental hosts abusing the system, skyrocketing eviction rates, illegal short-term rental
usage and group housing.
Major Concerns:
Ø Quality of Life
Ø Community/Neighborhoods
Ø Safety
Ø Evictions
Part 1: The Data
Hearings and Legislation—
Current Enforcement in San Francisco:
Ø Fall of 2014, short-term rentals legalized with conditions
Ø Allows permanent residents, which are defined as, ‘a person who occupies a unit for at least 60
consecutive days with the intent to make it their home—to offer short-term rentals.’ i
Ø Requirements:
o Register with the Planning Department
o Pay the City’s 14% transient occupancy tax by obtaining a Business Registration
Certificate

4

o Un-hosted rentals are limited to 90 days per year while hosted rentals do not have any
limitations on the number of days per year (365 days per year) ii
o Each listing is required to carry liability insurance of $500,000
Proposed Enforcement:
Ø Mayor Ed Lee and Supervisor Mark Farrell’s Amendments:
o Treats hosted and un-hosted rentals the same—limiting all rentals of less than 30 days to a
maximum of 120 days a year.
o New office of STR administration and enforcement: The Planning Department, Department
of Building Inspection, and The Treasurer and Tax Collectors Office to act as one division
for registrations, enforcement and complaints.
o On top of building residents and neighborhood groups, neighbors and nonprofit housing
groups would also have the ability to sue violators for attorney’s fees and an end to
violations.
o These requirements were later amended at the Board of Supervisors hearing on July 14,
2015. Please see below for a more detailed description of the hearing results.
Ø Supervisor David Campos Amendments:
o 60 day cap for both present and un-present hosts.
o Adds platform violations as misdemeanors, on top of the already current hosts’ violations
as misdemeanors.
o Registry Requirements—platforms prohibited from listing units not in good standing.
Planning required, notifying neighbors upon receipt of completed application.
o These requirements were later amended at the Board of Supervisors hearing on July 14,
2015. Please see below for a more detailed description of the hearing results.
Ø Share Better SF (Petition from the Public)
o Limits short-term rentals to 75 nights a year whether or not host is present.
o Requires quarterly reports to the Planning Department on the number of nights a unit is
rented to tourists.
o Fines ‘hosting platforms’ (like Airbnb, VRBO, HomeAway, etc.) for listing unregistered
units.
o Provides other building tenants, neighbors and neighborhood associations with notice
when a unit is registered as a short-term rental.
o Allows other building tenants and neighbors to go to court to protect their rights to the
quiet enjoyment of their homes when the city fails to enforce the law.iii
June 9, 2015 Hearing Results
Ø Supervisor Farrell requested for continuance, to postpone the vote for a month in an attempt for
the supervisors to come to a consensus.
Ø Supervisor Campos opposed this idea of a continuance, supported by Supervisor Mar, Supervisor
Avalos, and Supervisor Kim.
Ø The continuance passed with a 7 to 4 vote.iv

5

July 14, 2015 Hearing Results
Ø Supervisor Campos’ proposed amendments rejected by a 5 to 6 vote. Changed amount of
days to rent per year to 75 instead of 60. Supervisors in support of his amendments were
Jane Kim, John Avalos, Eric Mar, and Norman Yee.
Ø The Board of Supervisors approved a first vote of an amended Farrell/Mayor law.
Supervisor Farrell’s proposed amendments passed with changes introduced at the time of
the hearing by another 6 to 5 vote. Supervisors in support of his amendments were
London Breed, Julie Christensen, Malia Cohen, Katy Tang and Scott Wiener. Changes to
the original amendments include: excluding the 120 day cap per year and re-introducing
the initial legislation from February—which requires hosts of short-term vacation rentals
to be present 275 days per year, and allows registered hosts when present to rent all 365
days per year and 90 days per year when not present or un-hosted.
Ø Additionally, 3 new requirements were adopted to the new law
1. Creation of a new “Short-Term Rental Office” to serve as a “one-step shop” for
applicants.
2. Hosts required to provide quarterly reports instead of annually, regarding how
many days they are renting out either a single, shared room, or an entire house.
3. Limits short-term rental vacation of units if there has been an Ellis Act eviction
within the past five years.v
Who Are the Hosts?—
(Data gathered from the Registered Short-Term Rental Applications on File at the Planning
Department. All answers were submitted voluntarily by applicants.)
Ø Average amount of years an applicant has lived in SF:
o 20 years
Ø Average nights renting per year when an applicant is not present:
o 60 nights
Ø Average nights renting per year when an applicant is present:
o 178 nights
Ø Average amount of years an applicant has lived in their current unit:
o 11 years
Ø Total number of registered short-term rentals that are rent controlled:
o 14 units
Ø Total number of units that are rented:
o 68 renters
Ø Total number of units that are owned:
o 590 owners

6

0

5

10

15

20

25

30

94102

94103

94105

94107

94108

94109

94110

94112

94114

94115

94116

94117

94118

94121

94122

94123

94124

94127

94131

94132

94133

94134

Years

Zip
Codes

Average
Length
in
Years
STR
Hosts
Have

Lived
in
SF
by
Zip
Code

Number
of

Years

0

2

4

6

8

10

12

14

16

18

94102

94103

94105

94107

94108

94109

94110

94112

94114

94115

94116

94117

94118

94121

94122

94123

94124

94127

94131

94132

94133

94134

Years

Zip
Codes

Average
Length
in
Years
STR
Hosts
Have

Lived
in
Their
Unit
by
Zip
Code

Number
of

years
host
have

lived
in
their

unit

Average

number
of

years:
11

The following graph, Figure 1, displays the average length in years STR registered hosts have lived in
San Francisco by zip code. The average length in years is 20.
Figure 2 shows the average length in years STR registered hosts have lived in their unit by zip code. The
average length in years is 11.
Figure
2

Average

number
of

years:

20

Figure
1

7

Percentage of STR’s in each Zip Code—
Which zip codes have the highest percentage of registered STR hosts? (Source: STR applications)
Ø 94110 — 15.6%
Ø 94114 — 15.6%
Ø 94103 — 7.7%
Ø 94107 — 6.2%
Ø 94118 — 5.0%
Which zip codes have the lowest percentage of registered STR hosts? (Source: STR applications)
Ø 94105 — 0.2%
Ø 94132 — 0.5%
Ø 94134 — 0.7%
Ø 94102 — 1.5%
Ø 94109 — 3.1%
Supervisor Districts—
District 1 – Supervisor Mar
• Total applications: 51
• Total approved applications: 42
• Total denied applications: 4
o (5 applications awaiting review)
District 2 – Supervisor Farrell
District 3 – Supervisor Christensen

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District 4 – Supervisor Tang
District 5 – Supervisor Breed
District 6 – Supervisor Kim
• Total applications:18
o (1 application awaiting review)
District 7 – Supervisor Yee
District 8 – Supervisor Wiener
District 9 – Supervisor Campos

9

0

20

40

60

80

100

120

140

160

180

200

Number
of
ApplicaGons

SF
Supervisors

Total
ApplicaGons
in
Each
Supervisor

District

Total
ApplicaMons
in
Each

Supervisor
District

District 10 – Supervisor Cohen
District 11 – Supervisor Avalos
o (1 application awaiting review)
The following graph shows the total number of applications received by the Department in each
supervisor district.
Figure
3

10

0

20

40

60

80

100

120

140

160

180

Number
of
ApplicaGons

SF
Supervisors

Total
Approved
ApplicaGons
in
Each

Supervisor
District

Total
Approved

ApplicaMons
in
Each

Supervisor
District

0

2

4

6

8

10

12

14

16

18

Number
of
ApplicaGons

SF
Supervisors

Total
Denied
ApplicaGons
in
Each

Supervisor
District

Total
Denied

ApplicaMons
in
Each

Supervisor
District

The following graph shows the total number of approved applications the Department has received for
each Supervisor District.
The following graph shows the total number of denied applications the Department has received for each
Supervisor District.
Figure
4

Figure
5

11

0

20

40

60

80

100

94102

94105

94108

94110

94114

94116

94118

94122

94124

94131

94133

Years

Zip
Codes

Total
Number
of
ApplicaGons
to
Register

0

2

4

6

8

10

12

14

16

18

Hosts

Zip
Codes

STR
Hosts
Who
Have
Lived
in
The
Same
Home

The
EnGre
Time
in
SF
by
Zip
Code

Number
of
Hosts

that
have
lived
in

same
unit
enMre

Mme
in
SF

The following graph shows the number of hosts who have lived in the same unit the entire time they have
lived in San Francisco. Zip codes 94110, 94114 and 94117 are the top three zip codes that have the
highest percentage of people that have lived in the same unit the entire time they have been a San
Franciscan resident.
Figure
6

Figure
7

§ Number
of

units
that

have
applied

to
legalize

12

Diamond St. 2
Dolores St. 6
Downey St. 2
Duncan St. 2
Elizabeth St. 3
Eureka St. 2
Filbert St. 4
Fillmore St. 2
Florida St. 5
Folsom St. 4
Fulton St. 2
Golden Gate Ave. 4
Grand View Ave. 2
Grove St. 7
Guerrero St. 5
Hancock St. 2
Hayes St. 3
Henry St. 2
Ivy St. 2
Kansas St. 5
Kirkham St. 2
Leavenworth St. 2
Lexington St. 4
Liberty St. 2
Lippard St. 2
Lyon St. 6
Market St. 2
Masonic St 2
Mission St. 4
Mississippi St. 5
Missouri St. 2
Moraga St. 2
Moultrie St. 2
Noe St. 3
Nordhoff St. 2
North Point St. 3
Oak St. 5

Church St. 3
Clayton St. 3
Clipper St. 4
Collingwood St. 2
Congo St. 2
Cresta Vista Dr. 2
Culebra St. 2
De Haro St. 2

Number of registered short-term rentals on each street
The following table displays the number of short-term rentals registered on each street for every street
that contains two or more.
Street Name Number of Units
4th St. 4
5th St. 2
7th St. 2
10th St. 2
14th St. 3
15th St. 8
16th St. 2
17th St. 4
18th St. 2
19th St. 2
20th St. 10
21st St. 4
22nd St. 2
24th St. 3
25th St. 6
26th St. 4
28th St. 2
33rd St. 2
40th St. 5
41st St. 2
45th St. 2
48th St. 5
Alabama St. 2
Albion St. 2
Andover St. 3
Anza St. 2
Ashbury St. 2
Baker St. 2
Bay St. 2
Belvedere St. 2
Broad St. 2
Broderick St. 4
Bryant St. 3
Buchanan St. 2
Buena Vista St. 3
California St. 2
Capistrano Ave. 2
Carl St. 2
Carolina St. 5
Caselli St. 2
Castro St. 9
Cesar Chavez St. 3

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Part 2: The Analysis
Hearings and Legislation—
On June 9th
, 2015, the Board of Supervisors voted to continue both ordinances amending the
Administrative Code to revise the Residential Unit Conversion Ordinance. The first ordinance proposed
by Supervisor David Campos, amended the cap to 60 days per year for renting a residential unit both
hosted and un-hosted. It would also require hosting platforms to verify that a residential unit is on the city
registry prior to listing, be removed as a listing if ever renting for tourist or transient use for more than 60
days, and provide proper information and documentation to the Planning Department. Other requirements
would include: “remove a listing once a residential unit has been rented for tourist or transient use for
more than 60 days in a calendar year, and provide certain usage data to the Planning Department; revise
the definition of interested parties who may enforce the provision of Chapter 41A through a private right
of action to include permanent residents residing within 100 feet; amend the private right of action
provisions to allow for a private right of action against hosting platforms and create an additional private
right of action against owners, business entities, and hosting platforms under certain circumstances;
provide for criminal penalties against hosting platforms in violation of this Chapter 41A; and affirming
the Planning Department’s determination under the California Environmental Quality Act.” vi
The second ordinance proposed by Supervisor Farrell, amended the cap to 120 days per year both
hosted and un-hosted. The requirements include: “revise the definition of interested parties who may
enforce the provisions of Chapter 41A, through a private right of action to include permanent residents
residing within 100 feet of the residential unit; create an additional private right of action under certain
circumstances; create an Office of Short-Term Residential Rental Administration and Enforcement
staffed by the Planning Department, Department of Building Inspection, and Tax Collector’s Office; and
affirming the Planning Department’s determination under the California Environmental Quality Act.”vii
Supervisor Farrell requested that the vote of these ordinances be moved to the next month, July 14th
,
2015. The move was seconded by Supervisor Tang and the motion passed with a 7 to 4 vote of
continuance.viii
According to the data that was used in this report pulled from Accela, the Department’s permit
tracking software, the average amount of years a registered host has lived in San Francisco is 20 years.
The average amount of years a registered host has lived in the unit they are currently residing in is 11
years. There is also a fairly large number of people who have lived in the same home their entire time
living in San Francisco. In total, there are currently 111 registered hosts that have lived in the same house
Chenery St. 2
Oakwood St. 2
Ord St. 2
Page St. 5
Parker St. 3
Pierce St. 2
Pine St. 3
Precita St. 4
Prospect St. 2
Rhode Island St. 2
Ripley St. 2
San Jose St. 2
Santa Marina St. 2
Scott St. 2
Shotwell St. 3
Shrader St. 3
Steiner St. 2
Sunview St. 2
Tennessee St. 2
Turk St. 2
Union 2
Valley St. 2
Waller St. 3
Webster St. 5
Whitney St. 2
Winfield St. 3
Wisconsin St. 2

14

or apartment the entire time they have lived in San Francisco, out of the 658 applications that our
department has received in the past five months. Based on this data, these are potentially the “true home-
sharers”. This group tends to be empty nesters who have recently vacated bedrooms due to children
leaving the home, and/or who may be struggling to afford their rent and make ends meet. However, those
are only a fraction of the actual hosts using Airbnb and other similar hosting platforms. The main issue
with short-term rentals is when bad actors abuse the system. For example, when owners of entire
apartment buildings or condominiums are operating as illegal de facto hotels and take away long term
housing. When looking at the data, there are some residents who have lived in the same home for 85
years, while others have only lived in their current dwelling for 1 year or less. When asking the question,
“Who Are the Hosts?” the answers seem to be ambiguous. Unfortunately from the research that has been
done, there is not one overarching category that every applicant for short-term rentals seems to mold into,
but instead two completely opposing groups.
Since the start of registration in February of 2015, applications have been deemed ineligible for
the following reasons: failed to submit the required documents needed to be reviewed by the Planning
Department staff to verify the applicant’s primary residency, within a reasonable period of time afforded
to them by the Department, or the staff has found proof that the renter or owner of the proposed short-
term rental unit was not, in actuality the permanent resident of the pending unit, or lastly, that there was
an open DBI or Planning Code Violation. According to the gathered data, on average, applicants plan to
not be present 60 nights per calendar year, while the mode is estimated to be 90 nights per calendar year.
When hosts are present, on average, applicants plan to rent 178 nights per calendar year while the mode is
estimated to be 275 nights per calendar year. These numbers indicate that the average applicant plans to
rent out their entire, shared, or single room unit to guests when they are not present for only 30 days less
than the legal cap, while un-hosted applicants are renting out their unit on average for almost half the
legal cap. Unfortunately, these numbers only represent a small proportion of the actual 5,000 listings on
Airbnb and do not include the other estimated 1,200 listings on other hosting platforms such as VRBO,
Flipkey, Roomorama, Wimdu, and countless others.ix
This sample size may not be entirely reflective of
the universe of hosts as they represent the “good actors” by following the law and registering before they
rent out their single or shared room, or entire home. It is difficult to make extensive conclusions about the
short-term rental market from the data provided, when only looking at roughly 700 applications out of the
estimated 6,200 currently on the market as listings.
Another legality issue is driver’s license. The Enforcement Division at the Planning Department
has noticed multiple applicants that have driver’s license that will show a different address than the
dwelling unit they are attempting to “share”. Often times, applicants have renewed their driver’s license,
changing the address from their previous address, fairly recently to when they have submitted their
application. The California DMV License Renewal Requirements are defined below for further
clarification on changing ones address or renewing ones license. According to the California DMV
License Renewal Requirements, every five years your California license must be renewed.x
Depending on
your driver’s license status (valid, expired, suspended, or lost/damaged), you can renew either: online, by
mail, by phone, or in person, whether you have moved within the state or not. According to the
California Department of Motor Vehicles, anyone is allowed to change their residence or mailing address
for their California Driver License, Identification Card, vehicle, or vessel.xi
Before filling out a change of
address form, one must have their last issued vehicle or vessel registration card with them. A change of
address does not require an in-person visit to a DMV office, however there are a few ineligibilities for
registering online if a person: does not have a California Driver License or California Identification Card,
does not have a social security number, has a Commercial Driver License (CDL) issued by California and
your residence address is in another state, has an Army Post Office or Fleet Post Office address, or has an
address outside of the United States. For U.S. citizens, the law requires that voter registration is also
updated when moving to a new permanent residence. These driver licenses that were submitted
automatically became a concern for staff on the validity of their residency if the average length of living
in a unit in San Francisco is 11 years based on the applications submitted.

15

Enforcement Policies in Other Major Cities in the United States—
o San Francisco, California
§ See page 1 for legislation active at time of publishing
§ As of Thursday, July 2nd
2015, New Agency Announced by Mayor Ed Lee
• Office of Short-Term Rental Administration and Enforcement will manage rental
applications as well as coordinate efforts to pursue violators of the city’s laws
and complaints.
• Loopholes:
§ For example, critics have stated the following:
o Hosting platforms such as Airbnb will not provide their data to
the public which makes it difficult to enforce the law.
o New amendments proposed by Supervisor Christensen requires
hosts to file quarterly reports on how many nights per year they
are renting out their apartments, as opposed to the hosting
platform submitting those reports which will make fabrication
difficult to detect.
o New York City, New York
§ Current Legislation:
• Entire residential rentals for 30 days or less are illegal.
Ø The 2011 New York State multiple dwelling law states:
§ A residential dwelling unit, such as an apartment building, must be used for
“permanent resident purposes” –the property must be occupied by the same
person or family for 30 days—unless the property is a licensed hotel, bed-and-
breakfast or hostel.xii
Ø Loopholes:
§ It is legal to rent a room in NYC if you occupy your home/apartment at the
same time and all parts of the dwelling are available to the paying guest.
However, individual leases or condo/co-op bylaws may prohibit this activity.
§ Exceptions for family members — The Class A Multiple Dwelling law
defines family as:
§ “A ‘family’ is either a person occupying a dwelling and maintaining a
household, with not more than four boarders, roomers or lodgers, or

16

two or more persons occupying a dwelling, living together and
maintaining a common household, with not more than four boarders,
roomers, or lodgers.” xiii
New York City in particular, has focused on ensuring that Airbnb’s expansion does not continue to
corrupt the housing industry. The new law that was initiated in 2011, The Multiple Dwelling law,
illegalized any type of short-term residential rental.xiv
Although these types of rentals have been
completely banned, there is however a couple of loopholes which allows people to use their home as
a short-term rental. For example, the term “family” is loosely defined which allows leeway for people
to disobey the current law. Another loophole is the legalization of a rented room in someone’s home
if the host is also living there full time and all parts of the dwelling are available to the paying guests.
There is no required registration for this type of renting, potentially a highly problematic concern.
New York State Attorney, General Eric Schneiderman, has even issued Airbnb with subpoenas to
receive information on exact addresses and revenues generated by Airbnb listings.xv
After these
subpoenas were issued, the Attorney General’s office found that “more than 72% of Airbnb’s New
York City revenue was generated by illegal listings.” That wasn’t the only surprising news that was
found out either, “the Attorney General’s report also found that commercial hosts dominated the New
York City Airbnb market.” xvi
o Los Angeles, California
§ 5 example cities in LA:
1. Avalon
§ Title 9, Chapter 8, Section 9.8.404 (d) outlines that Transient Rental Use is
considered only if a Conditional Use Permit is applied for. As stated in Title
Finance, Chapter 3, Section 3.3.403, a Transient Occupancy Tax of 12% shall
be collected and remitted. xvii
2. Hermosa Beach
§ Short-term rentals less than 30 days are not allowed except in commercial
zones when all permits have been obtained. Chapter 3.32, Transient Occupancy
Tax, states: for occupancy of any hotel or hospital as defined, each transient is
subject to and shall pay a tax in the amount of ten percent of the rent or bill
charged by the operator. xviii
3. Santa Monica
§ Article 9, Chapter 9.04.02 – The housing is designed for use by individuals
who will reside on the property for a minimum stay of at least 30 consecutive
days, but who otherwise intend their occupancy to be temporary. The housing
is intended for use by persons who will maintain or obtain a permanent place of
residence elsewhere. The housing includes some or all of the following
amenities: Maid and linen service, Health club, spa, pool, tennis courts, or
memberships to area facilities, Business service centers, Meeting rooms, Fully

17

furnished units including a combination of some but not necessarily all of the
following: furniture, appliances, housewares, bed linens, towels, artwork,
television sets, stereos, VCRs, CD players, fax machines, and Internet access,
and/or Valet parking. xix
4. Long Beach
§ Every transient will pay a tax of 12% total of the rent for their occupancy in
any room, space, or portion thereof in a hotel. “Hotel” means any apartment
house, auto court, boarding house, bungalow court, club, hotel, inn, lodging
house, motel, rooming house, camp, studio, dormitory, tourist home or other
structure, private or public, or portion thereof, within the city offering or
renting to transients for lodging, dwelling, or sleeping purposes, in guestrooms
for compensation, and shall further include any trailer court, trailer spaces, or
combinations of such spaces and trailers, including mobile homes, timeshare
units not occupied by the timeshare owner or a guest of the owner, and docked
boats and ships, occupied or intended or designed for occupancy by transients
for dwelling, lodging or sleeping purposes. No transient occupants are allowed
unless the use is also approved and licensed as a hotel, as stated in the Zoning
Definitions. xx
5. Manhattan Beach
§ Title 6, Chapter 6.24, Ordinance No. 2160 – Must obtain a permit, all
advertising will include permit, must acquire all occupants
information/maintain for one year, must provide a copy of “Good Neighbor
Brochure”, must collect TOT. xxi
o Ordinance draft proposed by the City and County of LA Councilmember Mike Bonin and
Council President Herb Wesson on June 2nd
2015:
§ Authorizes a host by right, to rent all or part of their primary residence to short-term
visitors, permitting someone to rent a spare room, a back house, or even their own
house while they are out of town.
§ Prohibits hosts from renting units or buildings that are not their primary residence or
are units covered by the Rent Stabilization Ordinance (RSO), forbidding speculators
from creating a syndicate of short-term rental properties, and prohibiting the loss of
valuable rental housing stock.
§ Captures Transit Occupancy Tax (TOT) from all hosts
Due to the rise in Airbnb’s popularity in the most populous city and county in the country, Los Angeles,
there has been a major shortfall of housing units.xxii
This has led to low vacancy rates and skyrocketing
rent prices. This theme of increasing rent prices is not just apparent in Los Angeles but a reoccurring
theme around the country in many major cities. The only rentals that seem to not be negatively affecting

18

the housing market is the true home sharing; the initial idea of short-term rentals or bed and breakfast,
that legally hosts guests for short periods of time and promotes a true sharing economy.
o Portland, Oregon
§ Legalized in 2014 xxiii
§ Requirements include:
Ø Rent out one or two bedrooms over-the-counter
Ø $180 permit after inspection
Ø Must notify neighbors
While some municipalities have attempted to ban short-term rentals altogether, such as New York City,
others such as Portland and Austin have changed legislation in an attempt to make enforcing the law
slightly easier for officials. The intention with stricter requirements and legislation is that landlords
running illegal hotels will be caught, providing more vacant and available housing. Airbnb designated
Portland its first “Shared City” –“meaning the company and the city had determined to work together to
create a regulatory framework that would allow the city to collect hotel taxes in exchange for creating a
new category of housing in its planning code—the “Accessory Short-term Rental (ASTR). ” xxiv
Whether
or not this relationship has been successful or mutually beneficial, the idea of creating a “Shared City”
relationship between all cities using Airbnb seems as though it would create a trusting environment where
“true sharing” is not only both parties priority, but also the ultimate goal of the business model.
o Austin, Texas
Ø Owners of Short-Term Rentals (STR’s), sometimes called Vacation Rentals, are
required to obtain an operating license (Ordinance No. 20130926-144). This law
applies to all properties (including rooms and guest houses) rented for less than 30
consecutive days.xxv
Ø Requirements:
§ Find the short-term rental license application for your type (Type 1, Type 2,
Type 3)
§ Submit all of the following to Austin Code:
§ Application
§ $285 fee
§ Proof of Property Insurance
§ Proof of Payment of Hotel Occupancy Tax (if applicable)
§ Certificate of Occupancy OR Certified Inspection

19

§ Call 3-1-1 to complete a service request for an appointment, or walk-ins are
accepted
§ Allow 3 to 5 business days for processing and approval
§ Post the operating license* (which will arrive by mail) and a copy of the
vacation rental information packet in a visible area in the rental property
Ø There is a cap on the number of non-owner occupied (Type 2) and
multifamily/commercial (Type 3) short-term rentals allowed in each census tract of
the city. The list shows the number of licenses available in your area (map). Use
the Census tract lookup tool to find your tract code.
Before one of the busiest holidays of the year, July 4th
, Austin Texas decided to be overly prepared for the
chaotic weekend they were about to face. New travelers, friends and family visiting, loud backyard
parties, and an increase of cars parked around the city— a team of police, fire, and code enforcement
officers stood on standby between the hours of 10p.m. and 4a.m. ready to receive complaint calls from
angry neighbors. Cities such as New York City and Austin have made stricter legislation a priority, in
order to protect the true primary residents of their cities.

20

The figure below was taken from the LAANE Report by Roy Samaan from March 2015. This graph gives
a visual representation of the difference between whole units, private rooms, and shared rooms being
utilized in the three major cities: New York City, Los Angeles, and San Francisco. Each city has similar
percentages between whole units, private rooms and shared rooms. This graph is shown to demonstrate
that although these three cities hold many similarities, they all have different short-term rental laws. New
York City’s enforcement mechanisms are currently the strictest, being illegal. However, each city has
reported bad actors finding loopholes to those laws and regulations. Unfortunately, even though these
cities differ on short-term rental laws, each city is still faced with people abusing the system and
successful enforcement mechanisms have yet to be reported.

21

Part 3:
Conclusion—
This report was conducted to provide an unbiased overview of what is currently happening in the
short-term rental market in major cities, with a special focus on San Francisco. All data that was used was
drawn from the short-term rental applications on file at the Planning Department beginning February 2nd
of 2015 through June 8th
of 2015. All information was given voluntarily by each applicant. The purpose
of this data was to scope out similarities and differences between the short-term rental hosts in San
Francisco. The focus was meant to be on the registered short-term rental hosts are as opposed to the other
thousands of hosts that currently have illegal listings on the market. The data has shown commonalities
among zip codes and Supervisor Districts using short-term rentals, however it is difficult to provide an
answer to the question, “Who are the Hosts?”
Many of the applications accepted or approved by the Planning Department represent the true
home sharers; the people who obeyed the law and registered with the Department as it is required to do so
in the city and county of San Francisco. When Airbnb was first founded in 2008 by Brian Chesky and Joe
Gebbiaxxvi
, the initial idea of the company was simply true home sharing in order to make ends meet and
afford their rent. By simply providing short-term living quarters and a free breakfast to people traveling
that were unable to book a hotel, the idea seemed to fit perfectly into the already existing sharing
economy. Shortly after AirBedandBreakfast launched, later changed to Airbnb, the third co-founder
joined the team, a technical architect and recent grad from Harvard, Nathan Blecharczyk. Just one year
later in 2009, the company expanded to not just sleeping on air mattresses but instead renting out entire
rooms, apartments, homes, castles, boats, and even private islands. It didn’t take long for the company to
receive its one millionth booking in 2011, and shortly after in June of 2012, Airbnb announced its 10
millionth booking. However, 75% of those bookings came from outside of the United States.xxvii
The
company was expanding and growing at an exuberant rate—not just in the United States, but around the
world.
Airbnb’s business model connects hosts to travelers throughout the world through a marketplace
platform model which allows transactions to process without Airbnb having to own the rooms itself, as
hotels do for example.xxviii
Platforms such as these have the potential to give the hotel industry some tough
competition. However, according to an article that was released in May of 2015 in the Business Insider
discussing the hotel industry and the U.S. economy, there is currently a supply shortage in the hotel
industry. The average daily rate of hotels is currently at an all-time high.xxix
Due to the extremely high
occupancy rates of hotels throughout the country, hosting platforms such as the $25 billion dollar
corporation, Airbnb, offers an alternative way to accommodate travelers. In 2014 there were 4,798 listings
on Airbnb and almost two-thirds of those listings were for entire houses or apartments.xxx
In just one year
there were a little over 1,000 listings added to Airbnb’s site. San Francisco’s rent is currently up 15%
from 2014 and with an average rent of more than $3,400 a month, the most expensive city to rent an
apartment in the United States.xxxi
This has made affordable housing scarce and also influenced many
landlords to operate their apartment buildings or condominiums as illegal hotels—giving travelers a
chance to experience traveling in a non-traditional way. These illegal short-term rental units are one of the
main reasons people are being evicted out of their homes by landlords and left without a home. This is the
problem. This is what makes enforceable legislation a challenge. While there is a group of people who are
legally using their home as a short-term rental, the majority has not even registered with the Department.
The supervisors of San Francisco have been working diligently the past 5 months brainstorming new
amendments as well as additions to the already existing short-term rental legislation. Finding a solution
that makes everyone happy with the law has seemed to be impossible thus far. The number of days per
year hosts should be allowed to rent their home both hosted and un-hosted has stemmed most of the
debate between the San Francisco Supervisors. However, in the most recent vote of amendments,
Supervisor Farrell’s legislation passed with the addition of Supervisor Christensen’s amendments,
keeping the cap of how many days for both hosted and un-hosted the same: 90 days for un-hosted stays

22

and 365 days for hosted stays.xxxii
The ShareBetter SF petition also qualified for the November ballot,
receiving 10,000 signatures from supporters and other advocators against Airbnb. The petition asks for 75
days for both hosted and un-hosted stays as well as requiring Airbnb to fine unregistered units that are
listed on their website.xxxiii
As of right now, the biggest change in the legislation is the new office of short-term rentals which
will focus all of its attention on the intake of applications. This office will be a “one-stop shop” at the
Planning Department. The next four months until the ballot measure in November will test whether or not
there is an increase in applicants to register, as slightly stricter legislation has been implemented. The
Planning Department continues to enforce the changing legislation, however continues to be challenged
by the growing number of illegal listings on the market. The mission of the department reads:
…under the direction of the Planning Commission, shapes the future of San Francisco
and the region by: generating an extraordinary vision for the General Plan and in neighborhood plans;
fostering exemplary design through planning controls; improving our surroundings through
environmental analysis; preserving our unique heritage; encouraging a broad range of housing and a
diverse job base; and enforcing the Planning Code.xxxiv
In other words, the Planning Department hopes to make improvements to the city to the best of its
ability— economically, socially, environmentally, and culturally, by still ensuring historical preservation.
However, the thousands of bad actors abusing the system make it difficult to carry out that function. The
future of San Francisco will negatively be impacted if this legislation continues to provide loopholes for
those bad actors. This is an extremely controversial topic and deserves the utmost priority, as it is vital in
the future and success of San Francisco.

23

Endnotes

i
Budget and Legislative Analyst’s Office, “Policy and Analysis Report,” sfbos.org, last modified May 13, 2015,
http://www.sfbos.org/Modules/ShowDocument.aspx?documentid=52601
ii
“Ordinance No. 218-14,” sfbos.org, last modified October 7, 2014,
http://www.sfbos.org/ftp/uploadedfiles/bdsupvrs/ordinances14/o0218-14.pdf
iii
“Share Better SF,”sharebettersf.com, last modified June 14, 2015, http://www.sharebettersf.com/sharebetter-the-
petition-airbnb/
iv
City Hall Board of Supervisor’s Hearing. June 9, 2015.
v
City Hall Board of Supervisor’s Hearing. July 14, 2015.
vi
“Legislative Research Center,” City and County of San Francisco Board of Supervisors, sfbos.org.
vii
City Hall Board of Supervisor’s Hearing. June 9, 2015.
viii
Office of Economic Analysis, “Amending the Regulation of Short-Term Residential Rentals: Economic Impact
Report,” sfcontroller.org, last modified May 18, 2015,
http://sfcontroller.org/Modules/ShowDocument.aspx?documentid=6457
ix
Joshua Sabatini, “Airbnb Rentals Cut Deep into SF Housing Stock,” sfexaminer.com, last modified May 14, 2015,
http://archives.sfexaminer.com/sanfrancisco/sf-report-says-units-rented-for-short-term-reduce-long-term-
housing/Content?oid=2929888
x
Change of Address, California Department of Motor Vehicles, dmv.ca.gov, last modified
2011,http://www.dmv.ca.gov/portal/dmv/?1dmy&urile=wcm:path:/dmv_content_en/dmv/online/coa/welcome
xi
Ibid.
xii
Jessica Dailey, “An Introduction to New York’s Short-Term Rental Laws,” curbed.com, last modified March 25,
2013, http://ny.curbed.com/archives/2013/03/25/an_introduction_to_new_yorks_short_term_rental_laws
xiii
Ibid.
xiv
Ibid.
xv
Elliot Mest, “New York City Debates Airbnb Pros and Cons,” internationalmeetingsreview.com, last modified
January 22, 2015, http://www.internationalmeetingsreview.com/hotel/new-york-city-debates-airbnb-pros-and-cons-
100951
xvi
Roy Samaa, “Airbnb, Rising Rent, and the Housing Crisis in Los Angeles,” The LAANE Report. last modified
March 2015.
xvii
Bianca Barragan, “The Few Places in Los Angeles Where Airbnb’s Might be Legal,” curbed.com, last modified
March 24, 2014,
http://la.curbed.com/archives/2014/03/the_few_places_in_los_angeles_where_airbnbs_might_be_legal.php
xviii
Ibid.
xix
Ibid.

24

xx
Ibid.
xxi
Ibid.
xxiii
Elliot Njus, “Portland Tries to Make Peace with Airbnb as ‘Sharing Economy’ Moves into the Mainstream,”
oregonlive.com, last modified January 31, 2014, http://www.oregonlive.com/front-porch/index.ssf/2014/01/airbnb-
style_vacation_rentals.html
xxiv
Roy Samaa, “Airbnb, Rising Rent, and the Housing Crisis in Los Angeles,” p.30, last modified March 2015.
xxv
“Austin Code Department—Vacation Rental Licensing,” Austin Texas Gov. austintexas.gov,
http://austintexas.gov/str
xxvi
“Airbnb,” Wikipedia.org, last modified July 17, 2015, https://en.wikipedia.org/wiki/Airbnb
xxvii
Ibid.
xxviii
Ibid.
xxix
Myles Udland, “The Hotel Industry is Sending a Clear Signal that the US Economy is Not Grinding to a Halt,”
businessinsider.com, last modified May 31, 2015,http://www.businessinsider.com/hotel-industry-economic-signal-
2015-5
xxx
Carolyn Said, “Window into Airbnb’s hidden impact on S.F.,” San Francisco Chronicle, last modified June 2014,
http://www.sfchronicle.com/business/item/Window-into-Airbnb-s-hidden-impact-on-S-F-30110.php
xxxi
Biz Carson, “The Fight Between Airbnb and San Francisco Just Got Nastier,” businessinsider.com, last modified
May 15, 2015, http://www.businessinsider.com/san-francisco-report-blames-airbnb-for-housing-shortage-airbnb-
strikes-back-2015-5
xxxii
City Hall Board of Supervisor’s Hearing. July 14, 2015.
xxxiii
“Share Better SF,”sharebettersf.com, last modified June 14, 2015, http://www.sharebettersf.com/sharebetter-
the-petition-airbnb/
xxxiv
City and County of San Francisco Planning Department. Sf-planning.org, last modified August 26, 2013,
http://www.sf-planning.org/index.aspx?page=3575
Images on page 1:
Humphrey, Julia. “San Francisco Bridge” The Best Restaurants in San Francisco. Ideal Magazine. Web. 8 July
2013.
“San Francisco House” A Division of William Lilly and Associates. San Francisco Green Point Rater California
Living and Energy. Web. 2013.
“Downtown San Francisco.” Photo Everywhere.Co.Uk, Web.
Detta, Gillar. “San Francisco Cable Car.” Word Press. Web. 2014

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