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Wednesday, November 4, 2015

No on F Wins, Mission Moratorium Loses, but did Airbnb Shoot Itself in the Foot?

Posted By on Wed, Nov 4, 2015 at 11:02 AM


click to enlarge PHOTO: SHUTTERSTOCK/ILLUSTRATION: SF WEEKLY
  • Photo: Shutterstock/Illustration: SF Weekly
By now you've probably heard the preliminary results for two of San Francisco's most contentious ballot initiatives. Proposition F, which would have strictly regulated short-term rentals, was defeated, 55 percent to 45 percent. Proposition I, the moratorium on market-rate housing development in the Mission, also failed, by a slightly larger margin: 57 percent to 43 percent. 

These returns fail to account for late-arriving vote-by-mail ballots, so it's possible the numbers will shift a bit, but the end results are fairly certain. 

In an email to Airbnb users last night, Chris Lehane, Airbnb's head of global public policy, who compared Prop. F to ISIS and the Taliban, wrote, "This victory proves what our community can do when we work together and fight for what we believe in. You showed that home sharing is both a community and a movement."

It's certainly a victory for Airbnb, although Lehane failed to mention the $8.3 million Airbnb used to blanket San Francisco's airwaves with its No on F message. If every "movement" had this kind of funding, we would be living in a very different country.  

I do think that there are some signs of trouble for Airbnb and its "sharing economy" business model going forward, however.

Most of the No on Prop. F campaign focused on a few key aspects of the bill: the private right of action (i.e. "neighbors spying on neighbors for profit") and the ban on short-term rentals in in-law units.

(No on F also made a lot of hay out of the idea that the law would require hosts to "report where you sleep at night," which was utter nonsense. The current short-term rental law, which Airbnb putatively supports, actually does distinguish between hosted and non-hosted rentals, i.e. whether or not the homeowner or tenant is sleeping at home each night. This whole line of argument was weird and bogus.)

Focusing on these parts of Prop. F might have worked for Airbnb in the short term, especially in casting the measure as "too extreme," but it's possible that in winning the battle, Airbnb shot itself in the foot. Because in the long term, I don't believe that Airbnb actually cares that much about the private right of action, in-law units, or even the 75-day cap.

The No on F campaign focused on the parts of the bill that put the onus of regulation on Airbnb's users, not on Airbnb itself. That's why No on F's arguments appealed to Airbnb's many users in San Francisco, who were voting in their self-interest.

But Airbnb's real concern is likely the idea that short-term rental platforms should be on the hook for ensuring that hosts comply with regulations. Prop. F would have required Airbnb and other platforms to list only units that were registered with the city. It also would have required Airbnb to pull units off its platform once they hit the hard cap on rent-able nights (75) and opened the platform up for fines if it failed to comply. Platforms would have also been required to report data to the city about which units were rented for how many nights each quarter.

This is an existential challenge to a "sharing economy" unicorn that has reached a $25.5 billion valuation by avoiding any and all responsibility for the real-world impacts of its business. Uber's value is based on its ability to avoid employing drivers and owning taxis. Airbnb's value is based on its ability to avoid owning real estate and employing hotel workers. For Uber, the risk and cost of owning (and insuring) a car are borne by the driver. For Airbnb, the risk and cost of owning or renting a house or apartment is borne by the "host."

Uber has been loath to take more responsibility for its drivers, but it does require them to be licensed (and insured). Airbnb doesn't want cities to start thinking "hosting" is something that should require a license as well, especially if those cities are going to require Airbnb to check on that license before it lists a rental. (San Francisco does require that hosts be registered, but the vast majority are not and the city has no real ability to change this reality without the cooperation of platforms like Airbnb.) 

Aaron Peskin's victory in District 3, and the threat of another ballot measure in 2016, might be enough to motivate the new progressive majority on the Board of Supervisors and the Mayor to reach a deal.

What will Airbnb say if the Board crafts regulation that adopts the meaty portions of Prop. F while shedding some of the "too extreme" aspects that made it so unpopular with casual hosts?





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About The Author

Julia Carrie Wong

Bio:
Julia Carrie Wong's work has appeared in numerous local and national titles including 48hills, Salon, In These Times, The Nation, and The New Yorker.

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