It’s been called “the end of Airbnb as we know it” and a “de facto ban.” That latter cry came via Airbnb itself, as New York City recently enacted a slate of tough regulations on short-term rentals after years of worry that the services were sucking up valuable housing stock and accelerating gentrification.
In New Orleans, where in some neighborhoods up to 10 percent of homes may be listed on sites like Airbnb, and in Phoenix, lawmakers are debating another round of new laws. Even small cities, like Bangor, Maine, are debating how best to short out short-term rentals, or STRs.
All this anxiety should sound familiar to San Franciscans, but also retro: In 2014 and 2016, SF enacted major STR regulations in two parts. “The goal at the time was to strike a balance between allowing STRs but protecting our limited housing stock, and I still don’t know if anyone else has done it better,” former supervisor David Campos tells The Frisc, adding that “for all the criticisms the city is facing now, this is something we can look back on as a success.”
That’s a nice idea for a change: something the city actually got right, and ahead of the curve to boot. If SF politicians a decade ago hadn’t fended off this arrow, the ongoing struggle to mitigate the housing crisis would be that much harder.
Could our current set of leaders apply anything from this one particular legal victory to the current situation? Before we answer that, it’s important to unpack whether the Airbnb assay really worked as well as its advocates say.
Aired out
It was only nine years ago that the latest tech boom and housing affordability crisis locked San Francisco between their respective horns. Silicon Valley had plucked SF from the doldrums of the Great Recession, but in a city where future shock has long been the default setting, fears set in fast and early that Airbnb and its imitators might crush everyday residents under the wheels of so-called digital innovation.
Chinatown activists circulated faux wanted posters of alleged STR hosts accused of “Airbnbing our community.” Even the staid City Hall Budget & Legislative Analyst offered the opinion that “short-term rentals may exacerbate the housing shortage in San Francisco by offering a more lucrative alternative” to conventional landlording.
It was a messy affair; city lawmakers were initially divided over how best to proceed. They passed a first set of regulations in 2014 and also asked voters to enact wider restrictions the next year. Airbnb threw its muscle against the ballot measure and prevailed, but the supervisors returned in 2016 to pass more legislation unanimously.
‘Short-term rental corporations said it was impossible for them to enforce city-level regulations on the platform side. The SF model clearly showed this isn’t the case.’ — University of Minnesota researcher Nina Medvedeva
The 2016 bill, considered a compromise, required hosts to register with the city, as well as live in the unit at least nine months per year. It also levied a 14 percent tax on each booking — paid by guests, not the host or company — which brought in more than $14 million the first year.
Most importantly, the new rules put some burden on rental platforms to police their users. Diego Sanchez, manager of SF’s Office of Short-Term Rentals, calls the program a success because “the number of properties being used for short-term rentals has gone down” from nearly 9,500 in 2016 to 2,500 listed on Airbnb and other platforms today. (The rental analytics site AirDNA estimates a figure closer to 3,500; it’s a sharp decline in either case.)
Sanchez acknowledges that the pandemic and economic malaise, not just city regulation, have also played a role, but he points out that SF tourism is back up, with some neighborhoods like Fisherman’s Wharf doing 95 percent of the business they did back in 2019. Yet Airbnb listings are still in the dumps, and that shows regulations working as designed, according to Sanchez.
And what happens in San Francisco often draws attention across the country. “Just about every city that has adopted short-term rental regulations since 2016 has adopted our model,” says Dale Carlsen of the advocacy group Share Better SF. “SF was the first city to set down requirements for the platforms themselves” rather than just property owners, and “now they all do it.”
University of Minnesota researcher Nina Medvedeva agrees: “The SF model arose at a time when STR corporations said it was impossible for them to enforce city-level regulations on the platform side. The SF model clearly showed that this isn’t the case,” she tells The Frisc via email.
Medvedeva writes that early efforts were led by an “odd-fellows coalition” that united landlords, hotel owners, tenant activists, and even many Airbnb hosts who feared that a freewheeling and unregulated market might ruin a potentially good thing.
In SF, that also meant development skeptics like Campos were agreeing with housing hawks who want new construction to actually turn into long-term homes. (Campos initially voted against the 2014 version of the law as not doing enough to protect renters, but two years later compromised with the board’s more moderate elements, like former supervisor and now state Sen. Scott Wiener.)
“San Francisco certainly avoided a lot of the sturm und drang by clamping down early,” YIMBY Action’s SF organizing director Jane Natoli tells The Frisc. “It’s great to have standards” rather than “to try and make it up as we go,” as some other cities have ended up doing, she adds.
Scofflaws still scoffing?
Sanchez, SF’s top short-term rental regulator, says the system is working and points to a drop in the number of complaints coming in, from hundreds a week “in the Wild West days” to only a few: “I want to give credit to my predecessors — they dealt with those issues so that we’re not buried anymore.” (Sanchez took office in 2020.)
Critics would still like to see changes. Medvedeva says relying on neighbors to report potential scofflaws is difficult to enforce, and the system places a “massive amount of housing stock” under the purview of just one office.
Murray Cox, founder of the STR data site Inside Airbnb, would like to lower the 90-day cap on rentals, perhaps down to 30 days per year. Cox says SF did well at the time after “a pretty vicious fight” to get a good outcome. But he argues that a lower cap, in the style of cities like Amsterdam, would make it easier to catch cheats.
Market skeptics and YIMBYs might agree that the STR law helped fix a problem, but they still don’t agree on the cause of that problem. Airbnb and its headaches for housing stock were spawned by a dearth of local affordable accommodations, says Matthew Lewis of California YIMBY. The regulations are fine, he notes, but they don’t address that underlying problem of hotel scarcity.
Lewis would also like to see lawmakers boost housing the old-fashioned way: by approving more housing. A unanimous vote to block a big tech platform is doable for many SF lawmakers “as long as we don’t have to build more physical supply,” says Lewis.
Even though complaints about STR-driven evictions are down from 2015, the tenants rights group Housing Rights Committee “doesn’t consider the Airbnb legislation a win,” spokesperson Liz Gobbo writes in an email, because the temptation of STR deals is too much for some landlords to resist. (Eviction reports are way down across San Francisco compared with a few years ago — but from many advocates’ perspective, even one is too many.)
The Frisc reached out to multiple Airbnb competitors and management agencies, but all declined to comment. Airbnb itself declined to comment on the record, although the company did defer to sources like a 2018 Bay Area Economic Institute publication arguing that stricter STR limits (like Cox’s 30-day cap) would drive up prices and burden hosts, and a Beacon Economics study of San Luis Obispo suggesting that STRs have only marginal effects on housing shortages.
San Francisco’s take on managing Airbnb is not perfect, but what democratic process is? The city was smart to take action, and the results remind us that legislating should be an ongoing process focused on the bottom line. We could use some of that thinking now, as January will bring possibly the most contentious housing fight in SF’s history, as the Planning Department brings a new citywide zoning proposal before the current set of lawmakers.
History shows that San Francisco can get stuff right — if we have the will and the leadership to see things through.
Adam Brinklow covers housing, development, and more for The Frisc.