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Out at Home: New York's Response to Airbnb Puts San Francisco to Shame 

Tuesday, Oct 28 2014
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San Francisco is a tolerant city. And that's a wonderful thing. Most of the time.

Our reflexive tolerance and aversion to confrontation can be played against us, though: We are made into a city of enablers. Every last passenger on a standing room-only Muni vehicle will hold his or her tongue while an ingrate sprawls across three places. When a voice rings out imploring this gent to "get your damn dog off the seat," it will, invariably, be spoken with a New York accent.

New Yorkers are not conflict-averse. New Yorkers do not suffer fools gladly. They do not take well to being bullied. And so, faced with the scourge of Airbnb and other tech platforms cannibalizing New York City's housing stock, state Attorney General Eric Schneiderman hit Airbnb with a subpoena.

Crunching the data, his office this month released an alarming report: Nearly three quarters of all Airbnb rentals in New York City — 72 percent — were in violation of state law forbidding short-term rentals of residential units.

Surprise, surprise, surprise: Airbnb is based here in San Francisco, where its business model is, indisputably, in violation of our similar city ordinances. But Schneiderman's counterpart, California Attorney General Kamala Harris, hasn't made any trouble for Airbnb. Quite the opposite: In the same week Schneiderman subpoenaed the $10 billion company, Harris held a fundraiser at Airbnb's opulent SOMA headquarters. Yes, our state's top law-enforcement official popped in to pass the hat in the den of a company with a business model that violates the laws of its home city, and hers.

On the very day she did this, City Attorney Dennis Herrera filed a pair of lawsuits against landlords who evicted long-term tenants (disabled tenants, no less) to convert their properties into illegal hotels, which they flogged on Airbnb and other sites.

The timing was embarrassing. Or, rather, it would be if anyone involved could feel embarrassment.

This week, Mayor Ed Lee signed into law Supervisor David Chiu's ordinance validating Airbnb's business model, setting the stage for a proliferation of residential units to, lawfully, be refashioned into tourist beacons. Just how this nascent law will be in any way enforced remains elusive, even to the city bodies charged with enforcing it. The $25 million (or more) Airbnb owes the city in back taxes remains uncollected; settling that debt was not made a precondition of handing Airbnb the keys to the city.

This was all rather alarming to Sen. Dianne Feinstein, who inveighed against the Airbnb ordinance in an op-ed in the city's paper of record. It's not every day a senior U.S. senator sees fit to openly and publicly opine on pending municipal legislation. Your humble narrator has learned that, prior to penning the op-ed, Feinstein phoned Lee and attempted to explain to him how this ordinance would eviscerate city zoning rules, deplete already-scarce housing stock, and enable a company that has made a point of not paying its taxes.

That argument didn't exactly fall upon deaf ears. The mayor was listening, all right. But not to Feinstein. Because what followed demonstrated a sense of timing far more insidious than Harris' earlier fundraising jaunt.

Not 24 hours after the board last week passed Chiu's legislation, a press conference was convened at which Lee bestowed his official endorsement upon Chiu's Assembly bid. Venture capitalist Ron Conway, the mayor's preferred financier and a major early Airbnb investor, was not in attendance. But his presence hovered over the proceedings.

Conway has doled out millions of dollars to Lee and toward other pet political causes; a number, like the elimination of San Francisco's payroll tax, have benefited him personally. It's nice to make friends in high places: Two years ago, Lee urged the city's elected treasurer — in writing — to back off on collecting Airbnb's back taxes. This year, along with fellow Airbnb early investor Reid Hoffman, Conway has poured some $735,000 into an independent expenditure committee targeting Chiu's Assembly opponent, David Campos.

So, the mayor announced his support of Chiu immediately after Chiu shepherded through legislation that stands to benefit Conway prodigiously. And not only have Airbnb's early investors put lots of money into aiding Chiu, Airbnb hired the firm running Chiu's campaign to round up supporters to cajole the board into passing Chiu's legislation. (Both Chiu and 50+1 Strategies head Nicole Derse have denied any wrongdoing; she claims a "firewall" was created within her 10-person firm).

That was the winning game plan. Not surprisingly, when asked why Airbnb conquered San Francisco while running into resistance in New York, sources in both cities offered an identical answer: "Home-field advantage."

The glossy mailers funded by Conway and Hoffman feature poignant, high-contrast photographs of domestic violence survivors who are quoted excoriating Campos for his vote to preserve the job of Sheriff Ross Mirkarimi, who pleaded guilty to grabbing his wife by the arm.

This is visceral stuff, and comes on the heels of $90,000 Conway and others dumped into the District 5 Supervisors race in 2012 in a similar campaign to sink Supervisor Christina Olague, who also voted to save Mirkarimi.

It's not entirely clear, however, whether this over-the-top political mobilization of domestic violence victims is actually helping Chiu, or if it was the difference-maker in District 5 (Olague was, to put it mildly, a suboptimal candidate). But these nasty mailers and the endless reserves of money behind them serve another purpose: The exceedingly costly and vindictive lengths these tech barons are willing to go has been made clear. Ambitious politicos know all too well what awaits those who please the city's ascendant forces — and what awaits those who don't.

This is the city we call home. And, for those with designs on remaking it — and possessing the money to do so — what an apt choice of home it is. Unlike New York City, a vast city-state administered by an army of 51 city counselors, ours is a conveniently insular place with a conveniently uniform economy. Here's one more way San Francisco is a wonderful investment opportunity.

And, like that ingrate sprawled across three seats on a crowded train, it's all out there for everyone to see. And we see it. But that's all we do. Because San Francisco is a tolerant city.

About The Author

Joe Eskenazi

Joe Eskenazi

Bio:
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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