
AirBnB units drop by 74% due to SF regulations - refurb
http://m.sfgate.com/business/article/Airbnb-loses-thousands-of-hosts-in-SF-as-12496624.php?t=1be8549d57
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ttul
Vancouver is about to do the same with a new bylaw governing short term
rentals. The cause is an unbelievable shortage of actual long term rentals for
people who live in the city. But the cause of THAT shortage is not AirBnB.
It’s rampant speculation by both locals and foreign investors.

Rather than fix the tricky speculation issue, government focused on Airbnb.
IMHO this will hurt both cities by making it more expensive to visit.

~~~
mjfern
If you own a property, why not just rent it for cash flow? What's the benefit
of letting a property sit vacant? So the property owner doesn't have to deal
with finding tenants and property wear and tear?

~~~
karthikb
If property value appreciation is significant (in SF, about 12% in 2017) the
benefit of renting out (AirBnB or otherwise) may actually be minimal - as you
said, the overhead of finding and managing the rental. $3k/month on a rental
makes you far less than just 12% appreciation on a $1.5M place.

~~~
usaar333
Where are you getting 12% appreciation from? Paragon ([https://www.paragon-
re.com/trend/san-francisco-home-prices-m...](https://www.paragon-
re.com/trend/san-francisco-home-prices-market-trends-news)) shows it at 7% for
houses and 5% for condos. That's ~6% after property taxes (assuming recently
set cost basis) or $90k/year. Maintenance, HOA fees (if any) further drop this
return. (Besides future appreciation isn't something you can bank on..)

A $1.5M home should rent for at least $4.2k (P/R ratio of 30). That's $50k a
year, smaller than the appreciation of $90k but still very significant. The
only reason I see to not at least hire a rental management company to do the
renting for you is if you are subject to rent control and fear not being able
to evict the tenant/raise their rents.

~~~
karthikb
[https://www.zillow.com/san-francisco-ca/home-
values/](https://www.zillow.com/san-francisco-ca/home-values/) \- 12.8% last
year and projected lower this year.

The reason I have a lower rent figure is that rents haven't gone up as
quickly, as much of the new construction has been focused on rental stock.

~~~
usaar333
Thanks for the citation. I'm a bit skeptical of Zillow's numbers; they look
pretty volatile (e.g. they show 2016 with 0% appreciation)

Anyway, according to zillow last 2 years is 7% average - and since depth of
recession 8 years ago, 8.6%. 12.8% is likely a statistical abnormality. (Of
note 10 year average is 5% vs. ~8.5% for SP-500 index funds)

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TAForObvReasons
The most significant points (that weren't discussed ad nauseam in previous
discussions over the last few years) from the article:

"About 2,000 people listed their homes but never rented to tourists." The
percentage is artificially skewed by the effects of eliminating stale
listings, and the real effect attributable to regulation is less significant
than the headline suggests.

"San Francisco charges a $250 registration fee plus a $90 business
registration fee for all hosts." This is a scarier prospect for AirBnB and
other companies. If $340 is really enough to scare off a significant
percentage of people, how much are these hosts making?

~~~
bsder
> If $340 is really enough to scare off a significant percentage of people,
> how much are these hosts making?

It's not the money. It's the fact that you will be _on record_ and people can
check up on you.

All this tells me is that a huge chunk of the AirBnB folks _actually knew_
when they were in violation of something and, now that they might get caught,
have decided that AirBnB really isn't worth it anymore.

~~~
bonesss
> _It 's not the money. It's the fact that you will be on record and people
> can check up on you._

And beyond the compliance checking here and now, it also means you're subject
to and pre-registered for any and all forthcoming regulation.

I think, though, it's only fair. If private rentals are gonna compete with
hotels then private rentals need to start addressing some of the issues we
have regulated mostly out of existence with how hotels used to be. Like having
a registered business, or perhaps the right kind of insurance, or the right
kinds of fire safety systems that are monitored on a schedule. Business ain't
easy, and shortcuts are how we get unthinkable tragedies. It's only fair the
economics of AirBnB hosts reflect that.

~~~
bsder
> I think, though, it's only fair.

Oh, I agree. Things like "pest control" are really damn important to people
living around you.

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refurb
I think one the most impactful parts of the regulation is getting your
landlord's ok. God knows how many people were doing AirBnB knowing either
their landlord would not be ok with it or their lease strictly forbidding it.

~~~
hn_throwaway_99
I think this will basically kill AirBnBs for any sizable multi-tenant
building, which is basically 90% of the inventory in certain areas of the
city. I don't know of _any_ condo associations or professionally-managed
apartment buildings that allow short-term rentals.

Sure, single family homes or very small condo units (e.g. just a couple units
where the owners all know each other) may allow it, but if other cities take
this lead it will be a large, significant blow to AirBnB.

~~~
dawnerd
Well they exist and they list on airbnb. Forget where but I noticed a whole
bunch of very similar looking listing and I thought it was spam at first but
realized it was just an apartment/condo complex putting their unleased
inventory to work. Kinda smart I guess?

~~~
URSpider94
In many cases, this isn’t people renting out unused inventory. It’s landlords
taking their apartments out of circulation for long-term tenants in order to
rent to short-term tenants on AirBnB. Think about it - an Airbnb listing has
to be furnished, so the landlord has to make a decent investment in order to
put such a listing on the market. It’s not like they’re furnishing apartments
in between tenants moving in/out to get a few night’s rent.

This is also really unfriendly to tenants, you now have a bunch of strangers
traipsing through the hallways with no relationship or accountability to the
neighbors.

~~~
visarga
> This is also really unfriendly to tenants, you now have a bunch of strangers
> traipsing through the hallways with no relationship or accountability to the
> neighbors.

The root of the problem is that tourists have diverging interests compared to
locals, because they don't have to share the same building for many years. In
situations where agents have to deal again and again, tit-for-tat works. But
not where they meet just once.

It should be solved by good reputation tracking over rentals, so they don't
escape responsibility - maybe reputation tracking should be outside the hands
of a private company that has an interest in the game, like an independent
organisation.

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jokoon
Internet technologies have been constantly disrupting the rule of law for
individual interests.

I have no political statement to make about it, but there are so many issues
between the internet and the law: content copyright, airbnb, uber, money
laundering with bitcoin... If you're a technologist, I can clearly see how a
libertarian agenda fits perfectly.

Governments are not following on technologies to take advantage of them, or at
least not quickly enough...

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zbentley
Would it be possible to clarify the title as currently posted? It's ambiguous
whether the _price_ or _quantity_ of units dropped by 74%.

~~~
dharness
I'm actually not sure I saw anything in the article that actually provides
that figure - but it looks like it is meant to be the quantity.

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cozzyd
Chicago has hard a hard time enforcing its ordinance:
[http://www.chicagobusiness.com/realestate/20171218/CRED03/17...](http://www.chicagobusiness.com/realestate/20171218/CRED03/171219896/airbnb-
scofflaws-evade-chicago-officials)

Hopefully SF's measure has more teeth.

~~~
esturk
"HOW DO THEY SLIP THROUGH? - The problem: The city has yet to rule on about
1,300 applications that are missing a unit number or specific address. Until
the new ordinance required that Airbnb collect that information, most hosts
would list their home without an address or specific location, one way to
avoid detection if the unit was in a building that prohibited vacation
rentals. It's possible that some hosts deliberately filed an application
without an address, hoping it would allow them to stay one step ahead of city
regulators."

Interesting you brought this up. Unless the listing is unbelievably
attractive, a listing without a number or address just seems sketchy to me.
Makes me think its the analog of a hourly rented motel.

~~~
dmurray
Airbnb usually doesn't show the exact address to the customer before you've
rented it, or at least it doesn't make it easy to find. I've always assumed
this was to make it a little harder for landlords, neighbours or regulators to
see that a property was being listed without their permission.

If you're visiting an unfamiliar city and the place has good reviews, I don't
see anything sketchy about only being able to narrow down the location to
within a few hundred metres.

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intrasight
These are not burdensome regulations. And, as was mentioned in this
discussion, Airbnb makes the registration easy. So clearly the reduction is
from (a) illegals getting out of the act, and (b) activation energy barrier of
that registration fee.

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unstatusthequo
Glad I'm leaving SF. Way too much red tape and too little freedom. One one
hand it touts innovation, and with the other it strangles it. Typical
government interference for the bad.

~~~
sergiotapia
"WARNING: This comment contains ideas known to the State of California to
cause cancer and birth defects or other reproductive harm."

~~~
adrianratnapala
I once got a swag-bag at a job interview in Switzerland. It contained a long
thin object with just such a Californian warning on it. I was hoping it would
be a giant glow stick or a rocket. You something with actual chemicals in it.
But it turned out to just be a selfie stick.

~~~
Kalium
At this point, we may as well put one of those stickers on the entire State of
California.

"WARNING: The State of California contains chemicals known to the State of
California to cause cancer, birth defects, or other reproductive harm."

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oil7abibi
I mean not everyone will have a chance right away to register their listings.
Give it a month or so, then check back on the numbers.

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eggie5
I just read in Amsterdam they are introducing regulation that limits airbnb
rentals to max 30 days/year.

~~~
cbcoutinho
A friend of mine rents out her apartment using Airbnb and I remember it was a
max of 60 days p/y. Are they reducing it?

EDIT: Yea it looks like the city is reducing the legal number of days someone
can rent out something via Airbnb [0,1]

[0] [https://techcrunch.com/2018/01/10/amsterdam-to-halve-
airbnb-...](https://techcrunch.com/2018/01/10/amsterdam-to-halve-airbnb-style-
tourist-rentals-to-30-nights-a-year-per-host/)

[1] [https://www.engadget.com/2018/01/10/amsterdam-airbnb-
rental-...](https://www.engadget.com/2018/01/10/amsterdam-airbnb-
rental-30-day-limit/)

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bkohlmann
I'd be interested to understand two things:

1) How has the average price for similar priced airbnb offerings changed pre
and post regulations

2) How do vacancy rates for airbnb offerings in SF change following the purge?

I can see trends in both directions. Would be an interesting empirical
analysis of how supply changes outcomes.

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swman
downside: less air bnb

upside: maybe more housing available

~~~
axau
Almost certainly not. Many people in SF avoid long term rentals very much on
purpose, because of the city’s comical tenant protection laws.

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visarga
Hmm... so it used to be just 8453 rentals for a large city. It was a drop in
the bucket.

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gsich
Not surprising. Airbnb (and similar services) will lead to such abuse.

