Critics Blame Airbnb For San Francisco's Housing Problems

Aug 11, 2014
Originally published on August 11, 2014 11:08 am

Online rental brokers like Airbnb, VRBO and Flipkey in San Francisco may be finding some success renting to visitors on a nightly basis, but people concerned about a shrinking rental market have turned to legal action and protests.

In the city's North Beach neighborhood, for example, protesters recently gathered around a three-unit apartment with flats an online broker rents to vacationers. This used to be the rent-controlled home of elderly tenants until out-of-town investors bought the building and evicted the residents.

Ted Gullicksen of the San Francisco Tenants Union says those units were added to the 7,500 or so available to tourists in San Francisco using sites like Airbnb and VRBO.

"The underlying problem in San Francisco is the conversion of rent-controlled apartments to other uses, be they condo or tourist, which is taking sorely needed rent-controlled units off the market," Gullicksen says.

The city's nearly 3 percent vacancy rate is already one of the lowest in the nation. It's also got some of the most expensive median rents at nearly $3,300 per month. Local law limits rent increases for long-term residents; but if tenants are evicted, like they were here, they'll probably have to pay market rate to stay in the city.

But Peter Kwan, head of Home Sharers of San Francisco, urges critics not to blame all those renting to short-term visitors for the housing crisis.

"I applaud the tenants union for bringing attention to the bad actors, but they may be giving the impression that everybody who hosts are equally bad actors, which is simply not the case," Kwan says.

Kwan's organization has over 1,000 members, and a lot are like him: They don't evict tenants. They live in the property they rent to tourists. Kwan gets about $130 a night for a room in his house — and it's booked pretty solid in the summer.

"During the summer it would be more than 20 days a month," he says.

So is the room he rents out legal in San Francisco? "It could be a violation of the zoning code. I haven't looked into it," he says. He says he may do that.

There are at least two codes and ordinances that make private rentals of less than 30 days illegal in San Francisco, and two lawsuits have been filed so far. The law's the same in New York City, which has been cracking down on rental scofflaws.

San Francisco Planning Director John Rahaim says his city is trying to walk a fine line. It wants to protect vulnerable tenants "in a way that isn't causing heartache to people who are just trying to make a little bit of money in their apartment or house," he says.

Next month, the city's Board of Supervisors is expected to consider a compromise measure that would legalize tourist rentals, but only under some conditions.

Carl Shepherd, co-founder of HomeAway, which runs many vacation rental websites such as VRBO, is pro-regulation. But he says too much could just send the hot market underground.

"So it's a little like Prohibition in the '30s, and what you don't want to do is create a law that can't be enforced because that does no one any good," Shepherd says.

Other cities around the world have made definitive choices. Amsterdam and Paris recently passed laws allowing short-term residential rentals. Berlin and Barcelona both banned them. The short-term-rental arm of the so-called sharing economy will have to adjust one way or the other as regulations slowly catch up with the supply, the demand and the technology that connects the two.

Copyright 2014 KALW-FM. To see more, visit http://www.kalw.org/.

Transcript

STEVE INSKEEP, HOST:

Controversy is heating up around companies like Airbnb and VRBO. These companies are designed to let people rent out their homes directly, even for just a few days. Maybe you go away on vacation, so you rent your house to somebody else who's coming to your town on vacation. Now in San Francisco, some landlords have found that renting apartments through these brokers on a nightly basis can bring in a lot more money than renting to long-term tenants. And concerns over the city's shrinking market for rental housing has prompted protests and even legal action. For member station KALW, Ben Trefny reports.

UNIDENTIFIED PROTESTERS: (Chanting) How do you spell money? A-I-R, B-N-B.

BEN TREFNY, BYLINE: Protesters gathered in San Francisco's North Beach neighborhood recently to call attention to part of the city's housing crisis.

UNIDNETIFIED PROTESTERS: (Chanting) Sharing economy, you can’t evict me.

TREFNY: They got together around a three-unit apartment with flats being rented out to vacationers through an online broker. This used to be the rent-controlled home of elderly tenants, until out-of-town investors bought the building and evicted the residents. Ted Gullicksen of the San Francisco Tenants Union says those units were added to the 7,500 or so available to tourists in San Francisco using sites like Airbnb and VRBO.

TED GULLICKSEN: I mean, the underlying problem in San Francisco is the conversion of rent-controlled apartments to other uses be they condo or tourist, which is taking sorely needed rent-controlled units off the market.

TREFNY: The city already has one of the lowest vacancy rates in the nation, about 3 percent. It's also got some of the most expensive median rents at nearly $3,300 per month. Local law limits rent increases for long-term residents. But if tenants are evicted, like they were here, they'll probably have to pay market rent to stay in the city.

PETER KWAN: You know, I applaud the Tenants Union for bringing attention to the bad actors.

TREFNY: Peter Kwan heads a group called Home Sharers of San Francisco.

KWAN: But they may be giving the impression that everybody who hosts, equally bad actors - which is simply not the case.

TREFNY: Kwan's organization has over 1000 members and a lot are like him. They don't evict tenants; they live in the property they rent to tourists. Kwan gets about 130 bucks a night for a room in his house and its booked pretty solid in the summer.

KWAN: Oh, yeah, during the summer, it would be more than 20 days a month.

TREFNY: So the room in your house that you rent out, is that legal in San Francisco?

KWAN: It could be a violation of the zoning code. I haven't looked into it.

TREFNY: Are you going to do that?

KWAN: I may do.

TREFNY: There are at least two codes and ordinances that make private rentals of less than 30 days illegal in San Francisco. And two lawsuits have been filed so far. The law's the same in New York City, which has been cracking down on rental scofflaws. But San Francisco planning director John Rahaim, says his city is trying to walk a fine line. It wants to protect vulnerable tenants.

JOHN RAHAIM: And in a way that isn't causing heartache to people who are just trying to make a little bit of money out of their apartment or house.

TREFNY: Next month, the city's Board of Supervisors is expected to consider a compromise measure that would legalize tourist rentals but only under some conditions. Carl Shepherd, co-founder of HomeAway, which runs many vacation rental websites such as VRBO, is pro-regulation. But he says too much could just send the hot market underground.

CARL SHEPHERD: So it's a little bit like prohibition in the '30s, and what you don't want to do is create a law that can't be enforced because that does no one any good.

TREFNY: Other cities around the world have made definitive choices. Amsterdam and Paris recently passed laws allowing short-term residential rentals. Berlin and Barcelona both banned them. The short-term rental arm of the so-called, sharing economy will have to adjust one way or the other as regulations slowly catch up with the supply, the demand and the technology that connect the two. For NPR News, I'm Ben Trefny in San Francisco. Transcript provided by NPR, Copyright NPR.