
SF fines two landords $2.25M for illegal Airbnb rentals - tschellenbach
https://techcrunch.com/2018/11/05/sf-fines-two-landords-2-25-million-for-illegal-airbnb-rentals/
======
nostromo
> “This is a win for San Francisco residents,” Herrera said. “Whether you’re a
> tenant or a landlord who has been following the law, this is a victory. This
> outcome frees up more homes for long-term tenants and stops unfair
> competition in the marketplace. The serious financial penalty is an
> important deterrent. It sends a clear message to those looking to illegally
> profit off of San Francisco’s housing crisis: Don’t try it. We will catch
> you. Most importantly, we preserved more than 45 housing units to be used as
> homes, not hotel rooms. We are fighting back against San Francisco’s housing
> crisis in every way possible.”

This city attorney seems... extra.

You know what else frees up more housing units? Letting people build housing
does. You know who is responsible for the housing crisis? The city is.

~~~
ilikehurdles
Property owners are responsible for the housing crisis. The city is at their
whim.

But that’s beside the point, because this is a case about an unlicensed
Airbnb. I don’t know what the laws are where you come from, but someone
illegally turning their multi-tenant property in a residential neighborhood
into a 24-hour motel isn’t someone I have any sympathy for.

Besides, Airbnb is no answer to the dearth of housing in any city. The lawyer
is spouting facts. Those are 45 units that would be going to people who would
live or work in SF and instead are used to price gouge visitors (relative to
the going rent/mortgage rates) who want to save $50 on a hotel room.

~~~
Simon_says
Either they're being price gouged or they're saving $50 on a hotel room. You
can't have it both ways.

~~~
mattnewton
The hotels can gouge them harder, or the hotels can be worth the $50 price,
etc

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hamandcheese
> As part of city law, San Francisco requires property owners renting out
> units for less than 30 days to register with the city’s office of short-term
> rentals, as well as be a permanent resident of that unit.

As far as I can tell, AirBnb is blatantly complicit in allowing renters to
violate this law. When I moved to SF I stayed in an AirBnb for a few weeks. It
didn't occur to me when I booked that it could have been an illegal operation.
Once I became aware, I looked up the public records and, lo and behold, there
was no short term rental permit.

~~~
lancesells
Not only are they complicit in it they are profiting off of breaking the law
but having zero consequences. They are paying no fine in this case or any
other I've heard of because of something in their TOS.

"As part of city law, San Francisco requires property owners renting out units
for less than 30 days to register with the city’s office of short-term
rentals, as well as be a permanent resident of that unit. " \- The
registration can easily be made a requirement to list on AirBNB and they could
limit one unit rental to users.

"These are not the type of hosts we want on our platform and are glad the City
has the tools it needs to enforce the rules" \- Ha.

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ballenf
Are they not going after airbnb to get their fees back? Airbnb seems to charge
a fee of around 10-13% on bookings, putting their haul around $100k for the 11
months mentioned in the article. Maybe the settlement mentioned also included
a financial component.

Not downplaying the landlord's unlawful acts, but they couldn't have easily
operated at this scale without the help of a popular platform.

There's also a 14% occupancy tax _only on rentals of less than 30 days_ , so
SF has a financial disincentive against converting all these properties to
long term rentals. (Edit: if airbnb is lowering the average short term rental
price, then the picture is less clear. There are tourists who will go outside
SF if there aren't any 'whole house' options there...)

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ppeetteerr
Airbnb is suing NY right now because the city wants the names and addresses of
those who are illegally renting without registering their apartments. I
believe it's called "disruption"

~~~
seattle_spring
So you also support Facebook giving up names and addresses to law enforcement?

~~~
sonnyblarney
This is a little different.

Law Enforcement want data from Facebook because it's useful to an
investigation.

Law Enforcement want data from AirBnB because the act of working with AirBnb
is the illegal part.

So asking a drug dealer for the name of his distributors seems reasonable to
me. Or asking the illegal online betting company the names of those who were
placing illegal bets.

Though the regulations should hopefully be more clear on this.

~~~
l4yao
Airbnb isn't banned in New York, it can be operated legally. The city is
asking for a full list of all operators, including hosts abiding by
regulation.

If continuing the (poor) Facebook analogy, this is akin to asking for a full
list of their users, even the ones abiding by the law.

~~~
lern_too_spel
The city already has the names and addresses of the law abiding ones. They
registered with the city.

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komali2
Holy crap, they made 700k in profit on Airbnb? How much would they have made
as just landlords?

~~~
arcticbull
14 units times 11 months times the median rent in 2017 ($3000) = $462,000 in
revenue.

I suppose the article implies approximately $200,000 in expenses but it’s not
clear whether those are Airbnb specific or whether those would have been
required even if rented to tenants. It’s unlikely that each unit requires
$14,000 in maintenance per year. It’s fairer IMO to use $1/sqft per year for
condo maintenance when an HOA looks after the exterior, though I’m assuming
these were condos? Assuming 750sqft, that’s just $11,000 in costs. Then
there’s opportunity cost of capital, etc. The top line number should be good
enough for napkin math.

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awad
The city government would like to blame illegal Airbnb rentals for
contributing to the housing crisis but at the same time still enforces strict
height limits on buildings because NIMBYism. It won't be today, or tomorrow,
but eventually SF and the greater Bay Area will no longer be sustainable as
the major economic hub it is without some serious change. You can't complain
about increasing income inequality and cost of living problems without
addressing the core component that makes up the cost of living...

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intrasight
The fines have to be large enough to discourage breaking the law. Is it a good
law? I generally trust the residents to pass laws that make sense for those
that live there. What I want to understand is what makes SF different from
other cities in terms of zoning laws?

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bcheung
What is the motivation for this law? Why is SF regulating the length of stay
or rentors at all? Seems like a gross violation of freedom and property
rights. Zoning I can understand but duration? This seems like a bad law.

~~~
georgeburdell
This is what SF does: create a ton of laws or regulations so that it’s onerous
to not break one, then selectively enforce them when it’s palatable to. Try
street parking in SF; it’s like an SAT problem trying to figure out if you’re
doing it legally. Arbitrary justice is not good.

~~~
bobthepanda
The distinction between hotels and residences is pretty standard across the
world and is hardly arbitrary.

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zandl
There are essentially Airbnb hotels in Seattle too (e.g. JMFM+R8 Seattle,
Washington), I wonder if they’re in violation as well.

~~~
toomuchtodo
You could find out if interested (Department of Finance and Administrative
Services contact info on that page, who regulates short term [ie AirBnB]
accommodations).

[http://www.seattle.gov/business-regulations/short-term-
renta...](http://www.seattle.gov/business-regulations/short-term-rentals)

~~~
dvtrn
This actually sounds like it could make for a really interesting endeavor in
open records requesting for anyone who geeks off on that sort of thing (
_looks around_...oh wait I guess that's me).

~~~
toomuchtodo
I look forward to your results!

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SOLAR_FIELDS
Amusing bit of hyperbole in the very first line of the article:

“San Francisco City Attorney Dennis Herrera is laying down the law —
literally. “

Nowhere in the article is it explained how they “literally” are laying down
the law.

~~~
jmcgough
What's hyperbolic about that? The article says:

"As part of city law, San Francisco requires property owners renting out units
for less than 30 days to register with the city’s office of short-term
rentals, as well as be a permanent resident of that unit."

They were breaking the law, Herrara enforced said law.

~~~
ArchTypical
You literally need to look up the definition of what literally means.

~~~
wavefunction
This seems to be a literal case of "laying down the law" when the phrase
usually just refers to some authority figure disciplining a subject.

~~~
ArchTypical
Idioms are not literal. The implication of my original comment, is now spelled
out.

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dixie_land
Communist California at its best

~~~
dang
Maybe so, but please don't post unsubstantive comments here, especially not
flamebaity ones.

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torgian
Personally, I see no problem with Airbnb and I think the government forcing
you to be licensed is bad.

Airbnb has a review system for a reason. If it’s a shitty place, you write a
review and other people will be less inclined to rent.

I’ve been in hotels that were shitty and licensed. I’ve been in airbnb rentals
that were cheaper and better taken care of. I’ve also been in great hotels and
shitty Airbnb’s.

How is suing two property owners a win for city licensed landlords? Are they
getting the 2+million? No? Oh the city is getting it for “reasons” and calling
it a win.

Stupid.

~~~
bobthepanda
The licensing is not to ensure quality, the licensing is to restrict supply of
hotel units. Not to keep hotels in business, but because people simply do not
like having short-term visitors as neighbors or floormates.

It's not a win for city licensed landlords. It's a win for residents.
Residents are ultimately voters. And AirBnB is bad for the vast majority of
residents.

~~~
baddox
> people simply do not like having short-term visitors as neighbors or
> floormates.

That's a commonly provided explanation, but I find it very hard to believe
that existing laws and leasing rules can't/don't already easily solve this. If
too many instances of noise complaints, property damage, improper trash
disposal, etc. occur from your property, you (the owner or renter) get fined
or evicted. It's obviously not an excuse to say that you rented out your unit
on AirBnb. Surely these laws and rules have always existed, since that problem
is not unique to short-term rentals. What am I missing?

~~~
bobthepanda
People want _zero_ short-term visitors as neighbors, and the law reflects
that.

Landlords, under existing US law, are only really liable for tenant nuisance
if they should have known that the nuisance was likely (e.g., an aggressive
dog in the apartment.) It's hard to really argue that you could tell anything
about noisy short-term visitors, since fine upstanding members of society on a
weekend trip may turn out to be party animals at night.

Short-term rentals are even more difficult to enforce against just because
there is a shortage of police and inspector manpower in most major cites; by
the time one is able to get to you the visitor may have left already. And
first offence is generally just a warning, but a warning is of little use to
people taking a plane out the next day.

~~~
baddox
I don’t think simply not wanting short-term visitors in your neighborhood is a
legitimate desire that should be respected. It’s fine to desire a lack of
specific symptoms like noise or damage. If a landlord or property owner allows
guests that cause problems I don’t see why they’re any less liable than if
they cause the problems themselves.

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adamnemecek
Holy shit, how can the city regulate private property like this?

~~~
jankassens
This is nothing new. There are many zoning laws restricting what you can do
with your land: What can you build? Is commercial and/or residential use
allowed? It's very much in line to say if a unit can be used as a hotel-like
or not.

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jonthepirate
Rather than putting restrictions on what private people can do with their
property, I'm starting to think the city should consider bulldozing some of
the GG park to put up affordable housing or renting it out for cheap to those
who need it where the city of San Francisco would be the landlord.

~~~
thatfrenchguy
Yeah what a great idea to destroy one of the city's great landmark.

~~~
msie
It's actually a good idea if viewed as a coercion tactic.

~~~
sintaxi
Building shitty housing is never a good idea.

