Most Airbnb hosts flout SF laws, city report says
San Francisco Chronicle | Carolyn Said
April 7, 2016
More than a quarter of San Francisco homes listed as vacation getaways on Airbnb violate the city’s 90-day annual limit on such rentals, while the vast majority of Airbnb hosts have yet to register their properties, flouting a law enacted last year, according to a report released late Thursday by the San Francisco Budget and Legislative Analyst’s Office.
About 1,055 homes, or 26 percent of all entire-home listings, are rented for more than than 90 days a year, exceeding a cap on such “unhosted rentals” designed to prevent turning houses into full-time hotels, the report says. Those homes, controlled by 969 unique hosts, average an occupancy rate of 200 nights a year, it said.
The report also looked at the well-known issue that the vast majority of Airbnb hosts have ignored: a city registration requirement that took effect in February 2014. Airbnb says it had 7,046 unique hosts as of mid-March. San Francisco has received 1,647 registration applications – and some of those may be from hosts on other sites like FlipKey or HomeAway/VRBO.
“This damning report makes it clear that it would be irrational to rely on Airbnb and the industry to self-regulate,” said Supervisor David Campos, who asked city analysts to crunch the numbers. “We need to amend the law to make sure there is proper implementation.”
He declined to detail how the Board of Supervisors might modify the law, but its new progressive majority is likely to pass stricter rules than its predecessors. The report offered some suggestions on tougher laws, such as requiring Airbnb and other platforms to ban listings unless they have a registration number, and requiring them to provide more information to the city about possible violators.
Last week Airbnb said it would start to investigate and remove people running illegal hotels in San Francisco homes. The probe’s initial focus, Airbnb said, is people with multiple whole-home listings – a sign that they may not be legal residents of the home being rented. Its report said that about 1,149 whole-home listings are controlled by hosts who rent more than one home, with about 671 of those homes appearing particularly suspicious.
“People with multiple listings are just one sliver of the bad actors, a small part of a much larger problem,” Campos said.
Airbnb said the new report mischaracterizes some information, noting that some listings billed as entire homes may be master-bedroom suites with private entrances, which are legal to rent. Others may be entire homes rented for spans of 30 or more days at a time, which is also legal.
“Airbnb is already working to help meet the city’s goal of fighting illegal hotels and we are taking action by removing unwelcome listings from our platform, releasing data and cracking down on commercial operators,” the company said in a statement.
Airbnb’s report last week omitted the red-flag issue of how many whole homes are rented for more than 90 days a year. Since it controls calendars and payments for all listings, it could easily produce the data.
How city got its figures
The San Francisco city report relied on a roundabout way to deduce how often homes were rented. First, it used automated tools to extract listings data from Airbnb’s website on Nov. 1, 2015. Then it used the number of reviews per property to estimate how often each property was rented. Airbnb CEO Brian Chesky has said that 72 percent of guests leave reviews, while San Francisco Travel says home-stay guests average 5.1 nights. City analysts applied these two factors to the number of reviews to estimate how many nights each listing was rented.
While San Francisco startup Airbnb, now worth some $25.5 billion with 2 million listings worldwide, is the most popular venue for vacation rentals, it’s not the only one. Expedia’s HomeAway/VRBO has about 1,774 San Francisco listings while TripAdvisor’s FlipKey has 896, the report said, without delving into behavior on those platforms. It did suggest that the city should try to get those sites to remit San Francisco’s 14 percent hotel tax, something Airbnb has been doing since mid-2014.
San Francisco’s new Office of Short Term Rentals is hamstrung in enforcing the law because Airbnb and other platforms don’t share information or sufficiently police their websites, the report said.
“The (city enforcers) don’t know the location of the businesses they are in charge of regulating or the names of the people running them,” said the report’s main author, Fred Brousseau, director of policy analysis in the Budget and Legislative Analyst’s Office. “That puts them at a real disadvantage in terms of enforcement.”
The report illuminates enforcement’s limitations, he said. “The fact that there are that many hosts exceeding the 90-day cap (on whole-home rentals) and the city can’t identify them in any systematic way or get them to stop is an indication that the office doesn’t have all the tools at its disposal that it needs,” he said.
Airbnb, hosts and even the report all said the current registration process is flawed. “San Francisco is asking hosts to apply for multiple permits, fill out dozens of pages of paperwork and tell the city how many spoons they have in their home,” said Airbnb, referring to a recent requirement that San Francisco vacation-rental hosts report and pay taxes on all the furnishings in their homes.
The report suggested streamlining registrations and letting hosts register online without having to appear in person.
Airbnb and its ilk stir controversy because of concerns that lucrative vacation rentals siphon off badly needed housing. The company argues that many other factors are in play, such as long-standing city policies that limited new construction.
Both sides of the debate say they want to help middle-income people. Most San Francisco hosts are middle-class people who rent to travelers 48 days a year for supplemental income that helps them afford spiraling costs, Airbnb said.
“Airbnb and short-term rentals did not create the housing crisis, but they are definitely exacerbating it,” Campos said. “When you have housing that could go to middle-income or working-class people but is taken off the market, things are made much worse.”