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President Chiu Announced Legislation to Regulate Short-Term Rentals and Protect Residential Housing

Board President David Chiu Announced Legislation to
Regulate Short-Term Rentals and Protect Residential Housing

Legislation Limits Short-Term Rentals to Primary Residence and Regulates Hosting Platforms; Balances Preservation of Housing Stock, Protections against Displacement and Flexibility for Sharing Housing

San Francisco, CA -- Board of Supervisors President David Chiu introduced legislation that would regulate a resident’s ability to rent their principal place of housing on a short-term basis. Currently, residential apartments cannot be rented for fewer than 30 days under San Francisco’s Administrative and Planning Codes.

“My legislation creates limited flexibility for permanent residents to earn the additional income they need to help pay their rent and every day bills, but not at the expense of converting our limited supply of housing into hotels or vacation homes,” said Supervisor Chiu. “That’s why we’re requiring residents to register with the city to ensure accountability in the process.”

The proposal requires residents to register with the City’s Department of Building Inspection for permission to rent short-term. The Department would grant two-year approvals to individual applicants that verify the apartment as their primary residence. As a condition of renewal, residents would need to provide documentation that they have complied with all city laws, including tax and rent control laws.

The legislation would also reinforce the existing prohibition against “hotelization,” which refers to the conversion of residential housing into full-time de-facto hotels. Some of the worst offenders – tenants and homeowners – are taking entire units and renting them year-round to guests, resulting in less housing for residents, higher rents and housing prices and exacerbating the City’s affordability crisis.

“Thousands of rent controlled apartments have been permanently converted to tourist use and the city needs to focus on these illegal conversions, rather than the situations where a tenant or homeowner is renting out their own apartment for a few weeks while they themselves are traveling,” said Ted Gullicksen of the San Francisco Tenants Union.

Only primary residents that live in their apartment at least three-quarters of the year would be allowed to rent short-term. Secondary or vacation homes that do not have long-term residents occupying them would not be given permission for short-term use so that the city’s stock of housing would be protected.

This proposal provides flexibility to San Francisco residents who could use the additional income from sharing their apartments while they are traveling because of work, school breaks, or vacations. The legislation aims to make a clear distinction between reasonable and limited short-term activity by these residents and the worst offenders that are converting entire apartments into short-term rentals.

Recognizing that the advent of new technology has enabled everyday people to share their housing directly through online platforms, this proposal also sets clear regulations for online and offline businesses that facilitate short-term rentals. They include requirements to collect and remit hotel or transient occupancy taxes and notification to users about all local short-term rental laws before a posting is allowed.

The legislation also strengthens the City’s ability to enforce the law by applying the following rules consistently across all City codes:

• All residential buildings of two or more units are subject to regulation;
• Residents who are not registered with the City but are found renting short-term after a complaint is filed are automatically in violation;
• Registered residents would need to demonstrate compliance in the event of a complaint;
• Residents that violate the law are blacklisted from listing their unit on all platforms until they come into compliance.

The proposal represents a balanced approach relative to cities like New York that have a full ban on short-term rentals and cities like Malibu that permit the use as of right. It also aims to capture the best practices of registration and reporting to ensure proper accountability.

For more information, please contact Amy Chan at 415-554-7419.

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Last updated: 10/21/2014 4:22:41 PM