Some of you know that Prop F, on the November 2015 ballot, which would have strengthened the existing ordinance for short-term rentals (STR’s), failed to pass after Airbnb spent over $ 8M to defeat it. It lost by about 55-45%. The existing STR Ordinance is separate from the Rent Ordinance. In 2015, the City set up a new Office of Short-Term Rentals within the Planning Department. However, as of early January 2016, according to the SF Chronicle, only about 1100 of an estimated over 6000 STR’s have registered or have applications pending with the City. The election of Supervisor Peskin makes it more likely that the Board of Supervisors will strengthen enforcement. Here is a summary on STR’s right now:
- Individuals can only host STR’s at their primary residence, which must be their primary residence for at least 270 days/year; Vacant units cannot be rented;
- Tenants cannot host STR’s where their rental agreement prohibits subletting. Even if they comply with the STR Ordinance, they can be evicted. The SF Apt Owners Association lease, which is widely used specifically prohibits STR’s. Even without a lease prohibition, STR’s often lead to problems with noise, partying and other nuisance behavior and neighbor complaints. Tenants cannot be evicted for a first-time eviction for an “illegal purpose” [one of the grounds for eviction] if the tenant cured the violation within 30 days of the notice. Tenants may have difficulty evicting problem tenants in a STR. Also, for a condo building, the condo Declaration or rules often prohibit STR’s, which can be enforced against the owner.
- Hosts can conduct STR’s for up to 90 days/year when they are not present in the unit, but there is no limitation when they are present.
- Hosts owe a hotel tax of 14% on the STR’s, which is paid quarterly.
- Hosts have to make quarterly reports to the City on the number of nights of STR’s.
- There is an insurance requirement. Some short-term rental platforms, eg, Airbnd offer secondary coverage, but hosts must have a primary policy. The insurance policies of hosts may not cover STR’s, which can be considered a business activity.
- Hosts must have business licenses;
Enforcement is increasing, and the City is highlighting enforcement actions, particularly for egregious violations; the City is pressuring LTR platforms to help them find and deactivate illegal listings.