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Sharing Government: The City's Spectacular Appeasement of Airbnb Only Threatens Those Who Want to Live Here 

Tuesday, Oct 14 2014
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Not a whole hell of a lot happens out on 23rd Avenue between Vicente and Wawona. And that's how people want it to be. And yet, the future of San Francisco popped up here, in the sleepy Parkside, none too long ago.

A quaint, two-bedroom home labeled "a pristine arts & crafts bungalow" was listed for sale. That's not remarkable. But listing it in the BizJournals' commercial real estate "Hotels & Motels" section? That's fairly remarkable.

Yet perhaps not for long.

The 1,500-square-foot, single-story hotel is, per the listing, an "income-producing San Francisco home" which "grossed $71,452 in 2013, and is solidly booked with increased daily vacation rentals for 2014." Would-be hoteliers are encouraged to "own an SF home that you can visit anytime, and produces income when you're not there!" Its "current web listings & business model can be easily retained."

In fact, they can be easily duplicated. And legally. The future is now.

Last week, San Francisco's Board of Supervisors approved legislation purporting to regulate Airbnb and other web services which, in undisputed violation of city law, allow homes and apartments to be refashioned into hotels. This was done following a hefty late push from Airbnb, and a letter-writing campaign from its astroturf front group.

Airbnb's business model was expressly designed to transgress city law. But the law has now been recalibrated ex post facto to validate the politically plugged-in tech platform, its wealthy backers, and prospering citizen hoteliers. That's not exactly the most respectful way to do business, and not every missive in the letter-writing deluge sent the supes' way was particularly respectful.

SF Weekly's Rachel Swan got a hold of one in which an Airbnb aficionado named Garrett Hebert altered the letter's pablum template to request the board "stop being a bunch of bitches" while urging "y'all motherfuckas to pass some sensible motherfuckin' legislation 'n shit, without delay, that ensures San Franciscans can continue to share their motherfuckin' homes."

At least one supe chided Hebert about being called a bitch. Sticks and stones. But, more substantively, the supes gave Hebert everything he and his wealthy enablers demanded.

The path is now clear for, as Hebert put it, "countless mothafuckas" to "share their motherfuckin' homes." It's hard not to foresee a metastasization of the situation the city ostensibly hoped to moderate.

Because this isn't regulation. It's capitulation.

Supervisor David Chiu's Airbnb ordinance is one of the most complicated bits of legislation to come down the pike in quite some time; it potentially affects every neighborhood in the city. As your humble narrator has written before, Chiu, to his credit, stepped into a void. There's so much at stake and no template to copy, no road map to follow.

In May, Chiu's office told us that the ordinance would "hinge on enforcement" — and the city entities tabbed with enforcement told us it was unenforceable. Much has changed in the past six months but this has not. Planning Department officials have, publicly and repeatedly, pondered how the hell they could even begin to enforce this law-to-be.

Planning personnel called for a finite yearly cap on how many days any home or apartment could be flogged on Airbnb or other services. This would, conceivably, be enforceable; if there's a 90-day cap, you could, theoretically, swoop in on Day 91 and start handing out remittance envelopes. Airbnb could rejigger its platform to prevent units from operating longer than 90 days a year, or at least flag overseers.

But that didn't happen. In fact, Airbnb execs told the city that wresting any data away from them would require individual subpoenas for each participating unit in the city — some 7,000 by January, per the Planning Department.

Instead of a tangible, enforceable limit and buy-in from the $10 billion company enabling this cannibalization of San Francisco's housing stock, the supes instead codified a bizarre, metaphysical conundrum that essentially allows crafty Airbnb hosts to peddle their homes, apartments, and broom closets every day of the year. Legally.

The ordinance permits hosts to hawk their units for 275 days a year when they're present and 90 days when they're elsewhere. And yet, minus a citywide deployment of private detectives lurking in the bushes, it remains unclear just how a wayward host will be caught off-premises (additional funding, if any, for this incredible new responsibility foisted upon the Planning Department has not yet been identified).

In a multiunit building, an owner can simply register her husband in one unit, her son in another, and so on — thereby gliding through a building-sized loophole when it comes to residency requirements. Anyone trying to enforce this nascent law is faced with a beguiling set of legal obstacles.

In the name of striking a balance, of regulating the plague of the city's housing stock being devoured by virtual hotels, the city is instead primed for an explosion of the very behavior it allegedly hoped to rein in.

As for why that's so problematic to so many, let's check back into that "hotel" on 23rd Avenue.

Assessing the value of a San Francisco residential property is a tricky business. Sorcery may be involved. The amounts people pay do have a touch of the magical about them. Assessing commercial properties is different; the price is calculated as a multiple of the income it generates.

But this city's commercial and residential properties have had their legal chocolate-and-peanut-butter moment. The bungalow hotel's asking price was $1.1 million. This was doubtlessly tabulated by factoring in the property's revenue-generating ability. Expect to see more of that all around town.

If you ever wondered how San Francisco's insane home prices could possibly get crazier — a means has been found.

Expect to see rents going up, too. You needn't be John Maynard Keynes to grasp that more Airbnb units means fewer rental units and increased demand for what's left. Those with the means to pay sky-high rent, meanwhile, could be willing to pay even sky-higher with the lure of renting out a portion of the flat on Airbnb to make back the difference.

If you ever wondered how San Francisco's insane rental prices could possibly get crazier — a means has been found.

Why would a bottom-line-oriented landlord or homeowner rent out his place to a family when he could charge three times as much to rolly-bag-toting tourists? ($71,452 a year is about $6,000 a month). Why would anyone lease out an apartment to a handful of young people chasing after their San Francisco dreams when far more money could be generated renting out the unit as a hotel room for young people chasing after soup in a bread bowl?

Airbnb, meanwhile, has been handed a spectacular gift. Its illegal business model has been validated — and other parasitic tech platforms clearly flouting city law certainly took notice. Expect more to come out of the woodwork.

Paying up the scores of millions of dollars of back taxes Airbnb owes the city was not part of the legislation allowing it to move forward — a huge precedent for the rest of the country. For the company's wealthy investors, this was a big deal. And they have apparently returned the favor.

An independent expenditure committee called "San Franciscans to Hold Campos Accountable" has, to date, poured some $600,000 into torpedoing Assembly candidate David Campos, Chiu's opponent in the forthcoming election. Half a million dollars of that comes from early Airbnb investor Reid Hoffman, $49,900 comes from early Airbnb investor Ron Conway, and $49,000 comes from Conway's wife, Gayle.

Chiu's campaign consultant, Nicole Derse, stresses that "our campaign has nothing to do with that. I don't even know who's funding what; I'm running our actual campaign."

Fair enough. But money talks. And those with the ability to listen likely discerned a message similar to the one penned by profane letter-writer Garrett Hebert: "We thank y'all bitchass motherfuckas for taking so much time to consider this important-ass issue — and we urge y'all to get it done right this time."

About The Author

Joe Eskenazi

Joe Eskenazi

Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" was a staff writer and columnist for SF Weekly from 2007 to 2015. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers.

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