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Tuesday, October 21, 2014

Airbnb Legislation Under Attack Today

Posted By and on Tue, Oct 21, 2014 at 11:45 AM

They are coming...
  • They are coming...
It's not every day that a sitting U.S. Senator takes out an op-ed in the city's paper of record to argue that municipal legislation is crap, and sets an evil precedent. 

But that's just what Sen. Dianne Feinstein has done with regard to this city's capitulation to Airbnb. This would seem to be unprecedented. But it could portend more than just griping from up on high. This could lead to changes in the city's nascent Airbnb legislation.

That's because the David Chiu-spawned ordinance needs to pass a second reading at today's Board of Supervisors meeting in order to gain passage, head to the desk of (unabashed Airbnb supporter) Mayor Ed Lee, and clear the way for you to bump into Norweigans with rolly bags in your hallway even more than you already do. 

SF Weekly has learned that fervent behind-the-scenes wrangling is going on at this very moment and, likely, all the way up to and during the 2 p.m. meeting. At issue isn't so much whether the supes will reverse their 7-4 vote authorizing the legislation but revisit a number of spurned amendments, many of which only failed by a 6-5 vote. 

And, in this case, many eyes will turn to Supervisor Malia Cohen, who is "a" if not "the" swing vote. 

More than a dozen amendments were proposed on the Board Chambers floor on Oct. 7; combined with the amendments already attached to Chiu's legislation during its months of gestation the total approaches 50. This is complex stuff, and ever-changing. 

But, two of the big would-be amendments are mandating Airbnb settle its back taxes with the city before being granted a municipal green light to print money; and a hard cap on the number of days a unit can be flogged as a short-term rental, which would make enforcing this ordinance conceivable if not a snap. 

These both failed on Oct. 7. But it stands to reason that they will be reintroduced today. Also, adoption of some of the amendments sure to be proposed and re-proposed today would require more public hearings, more procedure, and more time for Airbnb foes to make trouble. 

So, lobbying has been intense. And District 10 supervisorial challenger Tony Kelly has fired off an e-mail querying "Will Malia Cohen do the right thing this time?" 

Malia Cohen was the deciding vote on October 7 to not force Airbnb to pay as much as $25 million in back taxes to the City. While it is unconscionable that District 10’s Supervisor would not fight for those back taxes to be reinvested in our community for affordable housing and education, she will have an opportunity at today’s Board of Supervisor’s meeting to right her wrong. Even Senator Dianne Feinstein is outraged at the Board’s decisions. 

Well, that will be interesting, and not just for the intuitive reasons. 

Ethics complaints have been filed regarding the working situation of 50+1 Strategies running Chiu's Assembly campaign while also being in the employ of Airbnb. Both Chiu and strategist Nicole Derse have denied any wrongdoing or conflict of interest.  

50+1 Strategies is also handling Cohen's re-election campaign; a quick perusal of contributions reveals several thousand dollars worth of donations to Cohen from Airbnb interests.

This promises to be an intriguing day in San Francisco. Billionaire tech barons and senior senators and all the interested parties in-between will be peppering our legislators with cell phone calls and text messages until the very last minute. 

Play ball

Update, 5:42 p.m.: The vote is in. On the amendment that would've really hit Airbnb in the pockets, tasking short term housing rental companies to pay owed taxes prior to passage of the ordinance, was rejected, losing by a sole, singular vote. Supervisors John Avalos, David Campos, Jane Kim, Eric Mar, and Norman Yee voted for the back taxes. 

Supervisor Malia Cohen was much talked about as the potential swing vote on the amendment, which would've seen Airbnb pay as much as $25 million in taxes owed to the city. Cohen called out those assailing her vote, saying they were "politically motivated" attacks. 

We think she was referring to her competition for the District 10 supervisor seat, Tony Kelly. But though Kelly certainly has professional beef with Cohen, Senator Dianne Feinstein also disagreed with letting Airbnb skirt paying taxes, and wrote so in her San Francisco Chronicle op-ed:

Finally, in 2012, the San Francisco treasurer and tax collector ruled that short-term rentals to tourists must incur the city’s hotel tax that all other visitors pay to cover costs of public services and amenities.

The tab for back taxes for Airbnb rentals alone is estimated at more than $25million. Another commonsense amendment to collect those back taxes prior to this legislation taking effect was rejected by the board.

I believe there is a compromise solution, but it does not involve handing over the key to the city to Airbnb and other short-term residential rental companies.

The US senator certainly has no reason to smack down the humble San Francisco supervisor. She voiced an opinion oft-not made in this town, to ask the tech sector to pay what it owes, a sentiment Cohen and five other supervisors rejected.

After the amendment was shot down, the full short term rental resolution was approved in a 7-4 vote by the Board of Supervisors. 

It was certainly a victory for AirBNB, which employed lobbyists who met with Supervisor David Chiu over 50 times to write the ordinance, which the lobbyists helped Chiu write, word for word. 

Below, David Owen of Platinum Advisors writes to Chiu's aide, Amy Chan, about the ordinance:


In her op-ed, Feinstein compelled Mayor Ed Lee to veto the ordinance. But with Airbnb investor Ron Conway's well-known friendship with Lee, and Conway's $500,000 campaign against Assembly candidate David Campos on behalf of David Chiu, who wants to take bets on that veto? 

Those are slim odds.

(Joe Fitzgerald Rodriguez)

Update, 1:45 p.m.: On the heels of ethics complaints being filed against David Chiu and 50+1 strategist Nicole Derse, new complaints have now been filed against Cohen and Derse

Ethics Complaint Cohen

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About The Authors

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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