SF Stands up to Short-Term Rental Abuse

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Cyrus Gill is a junior hospitality and entrepreneurship & innovation double major
Cyrus Gill is a junior hospitality and entrepreneurship & innovation double major

Cyrus Gill is a senior hospitality management and entrepreneurship and innovation major.

Prop F will regulate, not devastate, short-term rentals. San Francisco’s Proposition F seeks to curb short-term renting in San Francisco by limiting private rentals to 75 nights per year and imposing regulations that are designed to enforce the collection of hotel taxes and renter information. It also requires revenue reports from hosting platforms such as Airbnb, VRBO, HomeAway, and Flipkey every three months. While Prop F allows for more rigid enforcement of the short-term rental market, it also allows private “interested parties” living within 100 feet of a rental unit to file suit against a neighbor. Companies like San Francisco’s own Airbnb who have been accused of increasing local rents, hurting hotel business, jeopardizing home security, and skirting taxes, motivated this proposition.

Airbnb is an inspirational, groundbreaking innovator that has brought the world closer together. However, I believe San Francisco’s approach is a fair one, by allowing the shared economy to grow while protecting local communities. By registering short-term rentals and collecting taxes, we may achieve a higher level of rent stability and community transparency.

Every city has different needs, which is why regulation, even of a multinational company, must be implemented on a city level. First of all, it is clear that San Francisco’s hotel industry is not hurting as a result of short-term rentals. SF Travel reported an unprecedented 95% average hotel occupancy rate in August, over 30% higher than the national average of about 63%. However, the rise of short-term rentals has caused price instability in the renters market. With the 75-night cap on rentals, those who need the extra income can still host guests for money, when the practice of repurposing long-term rentals as short-term rentals might be no longer feasible. According to San Francisco Travel, 56 percent of Airbnb hosts in San Francisco said they use their Airbnb income to help pay their mortgage or rent”. The ability to generate extra income will greatly help people’s capability to stay in their homes. Neighborhoods are also positively impacted by the increased tourist traffic and spending. SFT also stated that “72 percent of Airbnb properties in San Francisco are located outside the central hotel district,” meaning that most hosting platform users are not interested in staying downtown, and in effect, and are not taking business from the hotel sector.

Incumbent interests have depicted Airbnb and its contemporaries as “‘evading’ established systems of regulation.” However, as Roberta Kaplan of Columbia Law School states, “this is true only in the sense that the automobile ‘evaded’ the horse tax and saddle regulations.” By setting a cap on the day’s rented we are institutionalizing the idea that the people doing shared economy activities (renting or borrowing goods) are not professional cab drivers or hoteliers. If people’s homes are not primarily short-term rentals I stand to reason that we should regulate shared economy businesses differently.

We are constantly making tradeoffs between the encumbrance of regulation, and the social improvement or support it affords. In a perfect world, a city health inspector would test the food on your plate at every restaurant every time you dine out. Obviously this cannot be done. We strike a balance by inspecting randomly and in the most prominent areas. We do enough to allow the flow of goods and services to continue. This balance means something different for a restaurant, for a Airbnb host, and for a service that one buys from a professional, and one you get from a nonprofessional, or peer. San Francisco has taken a meaningful step in creating a more equitable business framework. They know short-term rentals will continue even if we ban them.

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