Thou­sands of Airbnb’s S.F. hosts drop out

San Francisco Chronicle - - FRONT PAGE - By Carolyn Said

Thou­sands of San Fran­cisco hosts on Airbnb and ri­val home-stay sites have stopped rent­ing their homes and rooms to tourists. Many oth­ers are scram­bling to reg­is­ter their va­ca­tion rentals with the city as a Tues­day dead­line looms for Airbnb and HomeAway to kick off un­reg­is­tered hosts.

“If you look at the sites, you’ll no­tice a sub­stan­tial re­duc­tion in the num­ber of list­ings,” said Kevin Guy, di­rec­tor of the San Fran­cisco Of­fice of Short-Term Rental Ad­min­is­tra­tion and En­force­ment.

The rush to reg­is­ter is the re­sult of an agree­ment be­tween the city and the sites, which had fought San Fran­cisco’s ef­forts to strengthen reg­is­tra­tion re­quire­ments and rental lim­i­ta­tions im­posed in 2015. Af­ter a court bat­tle, San Fran­cisco, Airbnb and

HomeAway reached a set­tle­ment in May that re­quired the sites to reg­is­ter all hosts in phases start­ing in Septem­ber.

By Tues­day, all hosts must be reg­is­tered. Airbnb and HomeAway won’t al­low un­reg­is­tered hosts on their sites, and other ser­vices, like FlipKey, which weren’t a party to the set­tle­ment, will face fines of up to $1,000 a day per list­ing and crim­i­nal penal­ties if they help ar­range book­ings of un­reg­is­tered list­ings.

The city said 2,168 hosts had met its re­quire­ments to of­fer tem­po­rary rentals as of Thurs­day — rep­re­sent­ing a frac­tion of the 8,453 Airbnb list­ings the city ob­served in early Au­gust. (That count ex­cludes more than 2,500 list­ings ex­empt from the rules.) An ad­di­tional 737 have sub­mit­ted ap­pli­ca­tions and can host while those are pend­ing. About 15 per­cent of them have more than one list­ing, such as two rooms in their home.

The num­ber is in flux: Some pend­ing ap­pli­ca­tions may be re­jected, while about two dozen ap­pli­ca­tions a day are still ar­riv­ing. Hosts can still ap­ply af­ter Tues­day, but any book­ings will be can­celed un­til they are reg­is­tered.

Airbnb, which got its start in San Fran­cisco just un­der a decade ago and is still head­quar­tered here, is by far the city’s big­gest va­ca­tion-rental site. It says that most hosts are res­i­dents who rent out spare rooms, or their en­tire home when they are away, mak­ing them com­pli­ant with city laws.

In ad­di­tion, the com­pany has about 2,650 list­ings in San Fran­cisco that are ex­empt from the reg­is­tra­tion re­quire­ment, in­clud­ing rentals of 30 or more days, bed and break­fasts, and ho­tels.

“Over the last few months, we’ve fo­cused on ed­u­cat­ing our host com­mu­nity about the reg­is­tra­tion process, and will con­tinue our out­reach ef­forts in the fi­nal days to en­sure hosts have all the in­for­ma­tion they need to reg­is­ter,” said spokes­woman Mattie Zazueta.

Airbnb has re­moved more than 2,600 list­ings since Septem­ber. It doesn’t yet know how many more it must ax Tues­day. Many list­ings had lit­tle ac­tiv­ity, so their re­moval won’t hurt its lo­cal busi­ness, she said.

Airbnb said it booked the same num­ber of nights in San Fran­cisco in the 30 days af­ter Dec. 5 as dur­ing the same pe­riod a year ear­lier. World­wide, its busi­ness soared dur­ing the same time frame. It booked 3 mil­lion guests glob­ally for New Year’s Eve — up 50 per­cent from the last night of 2016.

HomeAway and VRBO, both owned by Ex­pe­dia, and FlipKey, owned by TripAd­vi­sor, show­case many sec­ond homes, which San Fran­cisco does not al­low to be of­fered as va­ca­tion rentals.

“FlipKey looks like a mas­sacre hap­pened, there are so few list­ings now,” said Omar Masry, senior an­a­lyst at the Of­fice of Short-Term Rentals. “On VRBO, you can see that the map of San Fran­cisco is no longer cov­ered in pins (of avail­able prop­er­ties). A shake­out is hap­pen­ing.”

FlipKey has re­moved 498 San Fran­cisco list­ings and has only 57 re­main­ing, ex­clud­ing those ex­empt from the reg­is­tra­tion re­quire­ment such as ho­tels, time­shares and B&Bs, the city said.

TripAd­vi­sor spokes­woman Lau­rel Greatrix said FlipKey worked closely with the city to com­ply with the reg­u­la­tions, and noted that it of­fers a va­ri­ety of ac­com­mo­da­tions in San Fran­cisco, such as ho­tels, hos­tels and B&Bs.

Data for HomeAway and VRBO were not im­me­di­ately avail­able. In May 2016, they had about 1,300 lo­cal list­ings, a Chron­i­cle in­ves­ti­ga­tion found.

“HomeAway re­mains com­mit­ted to work­ing through the law’s im­ple­men­ta­tion plan with the city and hope to con­tinue our part­ner­ship on rea­son­able pub­lic pol­icy and en­force­ment in the new year.” said spokesman Philip Mi­nardi.

Airbnb and HomeAway sued San Fran­cisco in 2016 over a strict new law passed in June of that year. A U.S. dis­trict judge re­jected the com­pa­nies’ ar­gu­ments that their rights were be­ing vi­o­lated and or­dered them to work with San Fran­cisco on a reg­is­tra­tion sys­tem. Such reg­is­tra­tions were part of the “Airbnb law” en­acted in early 2015, but the re­quire­ment was widely ig­nored. Only about 1,800 hosts reg­is­tered.

San Fran­cisco wants hosts to reg­is­ter to en­sure com­pli­ance with such re­quire­ments as hosts be­ing per­ma­nent res­i­dents who do not rent en­tire homes for more than 90 days a year. The law seeks to pre­vent land­lords from re­mov­ing hous­ing stock by turn­ing homes into full-time ho­tels.

List­ings dropped off for sev­eral rea­sons:

Dor­mant prop­er­ties:

About 2,000 peo­ple listed their homes but never rented to tourists. Many were lured by the hope of quick riches from Su­per Bowl 50 and Amer­ica’s Cup guests who didn’t ma­te­ri­al­ize.

Ten­ants and condo own­ers

who can’t sub­let: When renters reg­is­ter as hosts, the city no­ti­fies their build­ing owner. “We think a good num­ber of folks might meet city el­i­gi­bil­ity re­quire­ments, but may be renters with ‘no sub­let­ting clauses’ in their leases,” Guy said. Sim­i­larly, some condo as­so­ci­a­tions bar sub­let­ting.

In­el­i­gi­ble prop­er­ties:

San Fran­cisco per­ma­nently bars some prop­er­ties from va­ca­tion rentals, in­clud­ing be­low-mar­ket-rate units and pub­lic hous­ing, build­ings sub­ject to El­lis Act evic­tions af­ter Nov. 1, 2014, and a kind of in-law res­i­dence called an ac­ces­sory dwelling unit. Funkier places, such as recre­ational ve­hi­cles, tree houses, tents, ship­ping con­tain­ers and boats, are also ver­boten for tourists here. Prop­er­ties with build­ing-code vi­o­la­tions can’t reg­is­ter un­til they clear those up.

In­el­i­gi­ble hosts:

Only peo­ple who live in their homes at least nine months a year can rent to tourists. That ex­cludes those who have a pied-à-terre in San Fran­cisco, or who travel more than three months a year. Some hosts who listed more than one prop­erty or who had guests stay al­most year-round were re­jected by the city be­cause they ap­peared to be op­er­at­ing il­le­gal ho­tels.

In­fre­quent hosts:

San Fran­cisco charges a $250 reg­is­tra­tion fee plus a $90 busi­ness reg­is­tra­tion fee for all hosts. For those who only rent a week or two while they are on va­ca­tion, this could be a de­ter­rent.


“It’s hu­man na­ture that peo­ple wait un­til the last minute,” said Airbnb’s Zazueta. Chicago, which went through a sim­i­lar reg­is­tra­tion process sev­eral months ago, saw a surge of last-minute reg­is­tra­tions. Like­wise, San Fran­cisco says ap­pli­ca­tions have been in­creas­ing in the past week.

Some hosts com­plain that the city is dra­co­nian with re­jec­tions, and said the num­ber of pend­ing ap­pli­ca­tions means it takes longer to get a de­ci­sion.

“I was re­jected be­cause some­one filed a com­pletely bo­gus com­plaint say­ing I have three units that are all Airbnbs,” said a host who asked not to be named. “What ev­i­dence do they have? It’s not true.” He plans to ap­peal the de­ci­sion.

In fact, re­jec­tions are ris­ing. From Fe­bru­ary 2015 to Au­gust 2017, 26 per­cent of ap­pli­ca­tions were re­jected. Since Septem­ber, 38 per­cent have been re­jected, from a smaller pool of 293 ap­pli­ca­tions.

“We’ve al­ways closely scru­ti­nized ap­pli­ca­tions,” Guy said. “Now that peo­ple are re­ally re­quired to reg­is­ter, there may be in­cen­tives for some to sub­mit ap­pli­ca­tions that may be fraud­u­lent, so it would be nat­u­ral to see an in­crease in the re­jec­tion rate.”

Ap­pli­cants have 30 days to ap­peal a re­jec­tion and will re­ceive a de­ci­sion within an­other 30 days.

There is a loop­hole for hosts who don’t want to reg­is­ter: rent­ing for a month or longer.

“A lot of peo­ple are switch­ing to 30-plus-day list­ings, but it’s harder for them to get renters,” Benkert said.

Gus­tav Choto (left) talks with Omar Masry, senior an­a­lyst at the short-term rental of­fice. Hosts in San Fran­cisco for Airbnb and other ser­vices must reg­is­ter prop­er­ties by Tues­day.

Photos by Car­los Avila Gon­za­lez / The Chron­i­cle

A sign points the way for peo­ple to get help reg­is­ter­ing a short-term rental unit as Omar Masry as­sists Marcy Lip­ton.

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