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S.F. cracks down on Airbnb rentals

Jeffrey Katz felt nauseous. The special-ed teacher makes ends meet by hosting Airbnb guests in the living room of his San Francisco apartment. But last week, Katz found an eviction notice on his front door. “You are illegally using the premises as a tourist or transient unit,” the letter said. Katz contacted Airbnb, which “didn’t seem quite interested.” He requested help from tenants’ activists, but “they made it abundantly clear that they dislike Airbnb,” Katz said. “Even though I’m not taking rental stock off the market, they were less than sympathetic to my plight.”

As Katz discovered, San Francisco’s ban on short-term rentals is turning out to have teeth. People who rent out space on Airbnb, VRBO and other markets for temporary housing are facing fines by the City Planning Department and eviction on the grounds of illegally operating hotels. “Using an apartment for short-term rentals is a crime in San Francisco,” said Edward Singer, an attorney with Zacks & Freedman who filed the notice against Katz. “It’s obviously not the same moral culpability as running a house of prostitution or manufacturing methamphetamines, but any illegal use is grounds for eviction. “The law I’m using is that the city says there are hotels and there are apartments, and the two shall never meet,” he said.

San Francisco bans all residential rentals of less than 30 days unless the hosts have a conditional use permit – an expensive and cumbersome process that virtually everyone ignores. The ban applies whether the hosts own or rent, paying guests visit frequently or once a year, or hosts rent out a room or an entire dwelling.

Complaints surge

Since 2012, the Planning Department has witnessed a surge in complaints about short-term rentals, normally from neighbors. The agency is now actively investigating about 85 people offering their spaces on Airbnb, VRBO and the like. Joe Tobener, a tenants attorney who is representing Katz, said Airbnb-related eviction notices are reaching epidemic levels. Just getting to the eve of a trial can rack up $15,000 in legal bills. “It’s not like these people are scofflaws,” he said. “They thought it was OK to rent out on Airbnb because the company didn’t tell them otherwise. Airbnb should be defending these tenants, or they should disclose to every person who rents in San Francisco that (short-term rentals are illegal) and tenants are being evicted.”

Laws may soon change

Airbnb’s website tells people to check local laws and their leases. A specific section on San Francisco explains the prohibition on short-term rentals and links to various city codes. “Unfortunately, we can’t provide individual legal assistance or review lease agreements for our 500,000 hosts, but we do try to help inform people about these issues,” said David Hantman, Airbnb head of global public policy. “We think we can best help by making sure the laws make sense.” In fact, the laws soon may change in San Francisco. Board of Supervisors President David Chiu has spent almost two years working on a framework for Airbnb’s operations. The company’s decision last week to start collecting the city’s 14 percent hotel tax by summer may help Chiu’s efforts. The new law would amend the codes that prohibit short-term rentals, among other provisions.

“We want landlords to want this activity to happen, and we want it to be legal,” Hantman said. Until then, Airbnb hosts roll the dice when they rent out homes, especially with neighbors watching. “If you live next door or nearby, and all of a sudden a place is turned into a hotel with people coming in and out, generally that is not welcomed by most residents,” said Christine Haw, Planning Department code enforcement manager.

Covering their tracks

Investigating complaints has grown more difficult over time. For example, websites and hosts appear to be hiding addresses and intersections. Some hosts list homes in the middle of Golden Gate Park or in the Pacific Ocean. “We are in a situation where it is so lucrative for property owners to do short-term rentals that people who are totally law-abiding will essentially break the law,” Haw said. “People go to extremes to conceal the practice.” Hosts have produced fraudulent leases or told guests to pose as nonpaying visitors, she said. Others have even gone so far as to stage fake residencies – hiring people to pretend they are long-term tenants.

As a result, catching people who flout the ban is a challenge, said Audrey Butkus, a code enforcement planner. “The chances of us being there when guests come out with suitcases are very rare,” Butkus said. Attorney Michael McLaughlin of Fried and Williams said he became aware of the ban when a client who rented out a house on Airbnb was the subject of a Planning Department enforcement action. “The city just wanted it to stop,” McLaughlin said. “This issue is really blossoming in San Francisco. It’s my impression that the city’s enforcement is getting more active.”

An end to hosting

Lisa Weitekamp and Chad Selph, who received an eviction notice “out of the blue,” contacted Airbnb for help. The company told them they should consult a lawyer. The SoMa roommates hosted Airbnb guests in their spare bedroom for three nights in October and stopped because it was a hassle. Once they explained their situation and agreed to cease hosting, the landlord agreed not to pursue the eviction. Katz, the special-ed teacher, is still hoping for his own happy ending. “If the eviction goes through, I will have to move out of the city,” he said. “That would break my heart.”


Credit: SFGate