Hosts renting homes warned
S.F.: Registration a must
San Francisco this year made peace with Airbnb and HomeAway when the two vacationrental companies agreed to ensure that all their local hosts abide by a requirement to register. Now the city is gearing up to pursue other home-stay companies, making sure that unregistered hosts don’t simply migrate elsewhere to duck their obligations.
On Monday, San Francisco wrote to 11 companies, warning them that they will face steep fines and criminal sanctions if they arrange short-term stays in unregistered homes. They have 45 days to comply with the law, and several options to do so.
“The onus is on the (companies) to determine how they want to comply and provide us with verifiable information,” said Kevin Guy, director of the Office of Short-Term Rentals, who wrote the letter.
Besides jettisoning any unregistered listings, companies must provide monthly affidavits that they are complying, and they must be ready to provide the city up to three years of bookings records upon request.
San Francisco wants to rein in short-term rentals because it fears that the lucrative practice siphons away permanent housing. Airbnb’s popularity exacerbated the issue, attracting thousands of local hosts. Airbnb says that most
of its San Francisco hosts either rent out rooms to make ends meet, or rent out their whole place occasionally when they are out of town.
Regulations that took effect two years ago seek to ensure that only permanent residents rent to travelers. But the core requirement — that hosts register — has been largely ignored. Only about a quarter of an estimated 8,000 hosts signed up, making it difficult to enforce rules against illegal hotels in homes.
Last year the Board of Supervisors passed legislation imposing strict penalties on vacationrental companies that arrange unregistered bookings. Airbnb, joined by Expedia’s HomeAway, sued to overturn the law. But a federal judge ordered the companies to work with San Francisco on a system to register their hosts. Airbnb and HomeAway will be phasing in the system over the next few months and after Jan. 4, 2018, they must remove all unregistered San Francisco listings from their websites.
Both companies will offer online registration, although San Francisco must still verify the hosts’ documentation. The city recently implemented its own online registration system. Critics had said its in-person method, which is still an option, was too cumbersome.
The companies sent the letter include two owned by giant travel conglomerates: TripAdvisor’s Flipkey, whose website shows 406 San Francisco listings, and Priceline’s Booking.com, with 203 apartments and vacation homes in the city.
TripAdvisor said it had received the letter and will “be reviewing it carefully before determining our next steps.” Priceline did not respond to requests for comment.
Some small San Francisco operators said they had already switched to requiring 30-day minimum stays, which exempts properties from the vacation-rental law.
“The monthly paperwork for each unit was too complicated, so we cater now to visiting nurses, corporate clients, parents visiting their new grandchildren, etc.,” said Annette Fajardo, owner of SF Holiday Rentals, which has about 40 local listings and received the letter.
Likewise, Jan Chernoff, president of Casa Buena Vista Vacation Rentals, said all but two of his 50 rentals are now for 30 days or more. The two exceptions have both registered with the city.
“We always intended to be in compliance,” he said. Casa Buena Vista started in 2004, several years before Airbnb. “It wasn’t until Airbnb that (vacation rentals) became an issue,” Chernoff said. “Before that, we weren’t a factor because not enough people were doing it.”
Several other companies, many of them based overseas, were sent the letter, including Canada Stays; France’s MisterB&B, which caters to gay travelers; Germany’s Wimdu and 9Flats, which have merged; and London’s One Fine Stay, which specializes in luxury properties. Other companies contacted were RedAwning and Overnight.
OneFineStay said it follows all applicable local regulations and advises its hosts to do the same. RedAwning said it already had begun taking steps to comply with the ordinance. The other companies did not respond to emailed requests for comment.
San Francisco’s law only affects companies that collect a fee to arrange rentals of unregistered homes. That means that pure listing services such as Craigslist are not covered. Craigslist now shows about 150 San Francisco vacation-rental listings, although some are duplicates and some are legal hotels.
But San Francisco also has strict rules for individual hosts. In fact, it has assessed $1.68 million in penalties against some 600 properties, and has collected about $713,000 of that. The remaining penalties are either being appealed or have been referred to the Bureau of Delinquent Revenue.
“Even if Craigslist doesn’t bear responsibility, hosts advertising there are still in violation if they offer a listing without being registered,” said Guy of the Office of Short-Term Rentals. “We will monitor sites like that closely over the coming months.”
Going forward, Airbnb and HomeAway will play an active role in policing their sites as part of their agreement with the city.
“We’re entering a very different world in how we do our enforcement, working collaboratively with platforms,” Guy said. “It will be a much more efficient way of operating.”