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Airbnb Fights Back Against An Increasingly Hostile San Francisco

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As tech booms, San Francisco prospers. The proverbial gold rush city is awash in cash thanks in large part to the rise of Twitter , Uber, Airbnb and a host of well-funded start-ups.

But while the city leaders welcome all that tech money, many San Francisco residents are fighting back against the very disruptive forces these social media giants have wrought all across the world.

The latest battle pits San Francisco residents against Airbnb, the deep-pocketed start-up that connects homeowners -- "hosts" -- with "guests" seeking short-term accommodation. Long-time city residents, many of whom directly benefit from rent controls and the city's historical bias against any new housing development, believe Airbnb is enabling landlords to rent out rooms, sometimes indefinitely, at rates that incentivize property owners to push out existing tenants. These concerns are not unfounded. Rent in San Francisco is up by 40% since 2010 -- and with it, a nearly equal rise in evictions.

Now they're taking action. Aided by hotel unions and tenants rights groups, residents are hoping to pass a voter proposition that could potentially gut Airbnb's business, at least within San Francisco.

How We Got Here 

Airbnb bills itself as a "trusted community marketplace for people to list, discover, and book unique accommodations around the world." Millions have.

Airbnb's mass appeal is obvious. Want to earn a few extra bucks? Use Airbnb to rent out your "in-law suite" to that nice couple from Germany hoping to experience America on the cheap. Can't find a hotel you can afford during the World Cup? Here's a room in a nice neighborhood.

Some folks call this the "sharing economy" but really it's just capitalism in an age when everyone is connected and where frictionless data platforms have eradicated the gatekeepers. With $1.5 billion in venture capital and a $25 billion valuation -- that's more than Marriott -- Airbnb is leading the disruption of the global hotel industry.

But in San Francisco, where Airbnb is headquartered, a counter-revolution is afoot. A new ballot measure, Proposition F, calls for limiting so-called short-term rentals to 75 days a year. The existing law limits such rentals to 90 days a year if the host does not also reside at the property but places no limits if the host does reside at the same property. Prop F also requires the "host" to file quarterly reports with the city. This ensures that all hosts are paying the city's hotel tax. It might also help make sure all available rooms are up to code.

These seem like reasonable demands.

However, Airbnb spokesperson Christopher Nulty told me that the reporting requirements could prove onerous to many Airbnb hosts. Under Prop F, "you would have to report both when you rent out a room and when you don't," he says. For those renting out their home or flat on a recurring basis, this may not be a problem. For the retired couple that wants to rent out their home during next year's Super Bowl, which is expected to draw tens of thousands to the Bay Area, they would now have to register their intent with the city and file quarterly reports throughout the year. Many may simply abandon the effort altogether.

In addition, Airbnb, or a competitor, could be fined up to $1,000 per day per any listing that it posts on its site which does not comply with city law. This may not be feasible. It's certainly not scalable.

It gets worse -- at least if you're Airbnb.

Prop F would allow all "interested parties," basically anyone living within 100 feet of a rented unit, to sue the host for potential violations of the new rules. That's right. You don't have to be living in the property, just within 100 feet of it. Airbnb tells me that this "low barrier to entry to go after your neighbors" will incite all manner of frivolous -- and costly -- lawsuits while "doing nothing to address affordable housing" concerns. "It's zoning at the ballot box."

Airbnb clearly understands that Prop F is a threat to their business, possibly even to their business model. In a series of recent television commercials an Airbnb-funded group calling itself "San Francisco for Everyone" claim the proposed law will pit neighbor against neighbor.

Battle lines are being drawn.

Mayor Ed Lee, who has long been on friendly terms with many of the city's big tech companies, opposes the measure. Former mayor and current US Senator Dianne Feinstein supports it.

Mayor Lee argues that Prop F would encourage "petty lawsuits." If he's right, that could mean a lot of lawsuits. An analysis by the San Francisco Chronicle suggests there are nearly 5,400 San Francisco homes and/or rooms listed on Airbnb by more than 4,000 hosts.

The election is set for November 3, 2015. Right now, the Airbnb-supported commercials appear to be working. The company told me that support for Prop F has fallen from 45% in July to just 34% today.

This post has been updated since it was originally posted. 
The original version stated that short-term rentals were currently limited to 90 days if a host or tenant was also living at the property. The law actually places the 90 day limit on rentals where the host is not living at the property.