Why San Francisco is melting down over Airbnb
San Francisco isn't an easy place to live, given that it's one of the priciest real estate markets in the country. It might also soon become a tougher place to rent out part of your home through Airbnb and other rental services.
Voters in liberal San Francisco are in the midst of an meltdown over Airbnb, with opponents pointing fingers at the company for adding fuel to the city's already sky-high rents. Tensions over fairness, rents, livability and the city's growing income and generation gaps are being tested as residents vote today on Proposition F, also known as the Airbnb initiative.
That the issue stirs up strong emotions isn't surprising considering what's at stake. On the one hand, long-term residents of San Francisco are dismayed at how rents continue to spiral higher, forcing some out of their homes as rents reached record levels this year. That has led to anger at Airbnb and its competitors as the services get blamed for putting housing units out of reach of residents in favor of well-heeled tourists.
What exactly in Proposition F is getting San Franciscans so riled up? The proposal would limit the nights that a home can be rented to 75, while also requiring the homeowner file quarterly reports to the city. One of the stipulations would allow a neighbor to sue if he believes another neighbor has violated the city's short-term rental regulations.
That last part of Proposition F has sparked concern. One resident told the Los Angeles Times that he feared it would make residents litigious against each other.
But the issues go deeper than that. The vote is also seen as a proxy for the battle between the city's nouveau tech riche and the old guard, who lack the stock options to help cope with the surging cost of living.
"There are currently 4,600 listings for entire homes or apartments in San Francisco," wrote ShareBetterSF on its site to support the ballot proposal. "These units should be used to provide much-needed housing for local residents instead of being rented to short-term tourists."
Given the rising rents now hitting many of America's big cities, San Francisco's fight over regulating Airbnb might be a proxy for what's to come in other municipalities. A loss at the San Franciso polls for Airbnb might not only hurt the $25 billion startup's bottom line but prove an embarrassment because the city is, after all, Airbnb's home turf.
Airbnb takes issue with the claim that its service leads to higher rents. "There's no evidence that short-term rentals are impacting the housing market," spokesman Chris Nulty said.
Of course, opinions on how Airbnb affects the housing market may depend on whether a resident is profiting from the service, or hurting because of it. Thousands of San Francisco residents are turning to short-term rental services to help defray their own expenses, including sky-high rents.
In Airbnb's view, limiting the number of rental days to 75 would hurt middle-income homeowners who are trying to make some extra money. "If it's really about affordability, why are we telling people who are renting out a room and depending on that income?" said Nulty. "Why are we telling them it can only be 75 days a year?"
Others, though, cite short-term rentals as causing more headaches than high rents. One recent transplant to San Francisco wrote on Medium.com that his apartment, which he can "barely afford," is affected by "a barrage of tourists rotating through every few days with no investment to this community."
Airbnb may have been its own worst enemy in its efforts to defeat the proposition. It quickly took down a series of ads last month that were criticized as being passive-aggressive, and Airbnb acknowledged the ads "displayed poor judgement." The campaign tried to highlight the $12 million in annual taxes Airbnb says it generates for the city. One ad said: "Dear Public Library System, we hope you use some of the $12 million in hotel taxes to keep the library open later."
Despite that misstep, Airbnb says it's confident the proposition will be defeated. A poll from David Binder Research showed that 55 percent of voters surveyed late last month said they would vote against the measure. Results are expected to be announced around 11 p.m. Eastern Standard Time today.
Regardless of how the vote turns out, one thing is almost certain: Rents in San Francisco aren't coming down any time soon.