•

Bay Area Style Tuolumne Gives ~ Celebrating County

Wealthy renowned A guide to donors' ,,,., S.F. retailer autumn's legacies J1, . Wtll{es best live on Bashford's hiking, through Isfo.1-v~ Sty1c ever-so- climbing their good (tnff,]~~~~~~~!llD.~~iJ?Il . stylish and works.NI career. JI biking. Ml.

anrw ranci,co <!tbroniclt SFCHRONICLE.coM I Sunday, October 18, 2015 I PRINTED oN RECYCLED PAPER I $3.00 *****•

Airbnb measure divides neighbors Prop. F's backers, opponents split over impact on tight housing market

By Carolyn Said

A narrow alley separates Libby Noronha's West Portal house from that of her neighbor

Phil Li, who rents out three suites to travelers via Airbnb.

"He's running a hotel next door," said Noronha, 67, a re­tired federal employee. "People

,-~

come in the middle of the night, bumping their luggage down the alley. This is not an occa­sional use when a kid goes to college or someone is away for a week. Along with all the house cleaners, it's an array of com­mercial traffic in a residential neighborhood," she said of the noise, smoking, garbage, park-

CAMPAIGN 2015

ing and liability issues. But Li, 38, said he urges

guests to be respectful, while two other neighbors said that they are not affected. Vacation rentals helped him after he lost his job and remain a major

source of his income in addition to work as a real estate agent and renewable-energy consul­tant, Li said.

"I depend on Airbnb to make sure I can meet each month's expenses," he said. "I screen guests carefully and educate them to come and go quietly."

Prop. F continues on A15

Airbnb measure divides neighbors on housing impact Prop. F from page A1

Next-door neighbors Noronha and Li encapsulate the two sides of Proposition F, which would severely curtail vacation rentals in private homes.

It's possibly the most polariz­ing issue on San Francisco's Nov. 3 ballot. Short-term rentals are either a scourge devastating the housing market or a savior of the struggling middle class, depend­ing on which side you ask. It's definitely the most expensive campaign, with Airbnb pouring more than $8 million into defeat­ing Prop. F with a barrage of glossy mailers, slick TV com­mercials and online ads - plus lots of well-paid consultants and a cadre of volunteer hosts.

Units taken off market

*****• SFCHRONICLE.COM I Sunday, October 18, 2015 I AlS

Carlos Avila Gonzalez I The Chronicle

Fran Maier (right) welcomes Airhnh renter Emily Robin of Vancouver to herPotrero Hill home, where she rents two rooms for extra income.

Prop. F backers say prolifer­ating vacation rentals, many of them arranged by hometown startup Airbnb, as well as other sites like HomeAway, FlipKey and Craigslist, siphon perma­nent units from the market, hurt neighborhood ambience and infringe on landlords' rights. They want to cap rentals to travelers at 75 days a year and enable steep civil fines and big-

- 1.. • ...,J,,~:.0 aaa;.wt 11iahtorc: I J ibhv Noronba stands in the path by her house, where she says people come at all hours to her neighbor's Airbnb rental suites.

I

------. --------~----~ r-~ lots of well-paid consultants and a cadre of volunteer hosts.

Units taken off market Prop. F backers say prolifer­

ating vacation rentals, many of them arranged by hometown startup Airbnb, as well as other sites like HomeAway, FlipKey and Craigslist, siphon perma­nent units from the market, hurt neighborhood ambience and infringe on landlords' rights. They want to cap rentals to travelers at 75 days a year and enable steep civil fines and big­buc.ks lawsuits against violators - both websites and hosts. The initiative also would require hosts to report quarterly on how many days they live at home, as well as their rentals - reports on rentals are already required.

"Short-term rentals are de­creasing the housing stock at a time when the city badly needs it," Prop. F supporter and for­mer City Attorney Louise Renne said at a recent Chronicle edito­rial board meeting.

But Prop. F opponents say vacation rentals aren't to blame for the housing crisis.

"Housing affordability is a big issue in this city, but it's one that long predated Airbnb's presence here," said Chris Lehane, a for­mer top adviser to Bill Clinton and Al Gore, who is now Airbnb's head of global policy.

The anti-Prop. F contingent says temporary rentals actually help with housing by letting residents generate extra income to afford spiraling costs, as well as bringing new business to local merchants in outlying neighborhoods. They charge that Prop.Fis too extreme, pointing to the lawsuit provision as an incitement to frivolous lawsuits, to the reporting re­quirements as a privacy vio­lation and to the annual cap as unnecessarily harsh.

"I don't think the situation warrants this level of control, scrutiny and reporting," said Fr.:in M~;f'r_ ~n Prnnhr-nP<:tPr

Connor Radnovich I The Chronicle

Libby Noronha stands in the path by her house, where she says people come at all hours to her neighbor's Airbnb rental suites.

Prop. F - pros and cons Uke current San Francisco law, Proposition F stipulates that only permanent residents may offer short­term rentals of less than 30 days, requires hosts to register with the city and mandates payment of the 14 percent hotel tax. But it then diverges dramatically, imposing a raft of new requirements.

Prop. F

Limits all short-term rentals to 75 days a year.

Hosts must submit quarterly reports on how often they rented to travelers and how often they occupied their own house. Host­ing platforms must submit quarterly re­ports on rental nights for each address.

"Interested parties," including neighbors within 100 feet, can sue violators - both hosts and hosting platforms. If they win, they can receive special dam­ages up to $1,000 a day, plus attorney fees and costs.

It's a misdemeanor for hosting platforms to list unlawful units, with fines up to $1,000 per unit per day. Platforms must remove listings

What's different from city law

"Unhosted" short-term rentals now are capped at 90 days a year. Host­ed ones (when the resident is present) are unlimited.

Hosts must report quar­terly on how often they rent out their units, under a change the supervisors made in July. Platforms don't make reports, other than confidential data for hotel-tax collection.

Lawsuits against hosts but not hosting plat­forms now are allowed by building residents, a unit's owner and hous­ing nonprofits. Dam­ages are limited to attorney fees and costs.

It's now a misdemeanor for hosts who violate the law, but there are no penalties for hosting platforms.

Arguments for Prop. F Arsuments against Prop.F

It's impossible to prove when the host is home, so people can rent whole units to travelers year-round under cur­rent law.

Reports will help the city enforce the law.

Private enforcement will help make sure people obey the law.

Holding accountable platforms like Airbnb is the most efficient way to enforce the law.

Limits on hosted rentals hurt people who rent out spare rooms. These rooms would not be­come permanent hous­ing.

Violates citizen privacy.

Big financial incentives will spawn frivolous lawsuits by neighbors.

Dozens of websites list vacation rentals, so bad actors can hop from one to another. Private companies shouldn't have to enforce the law

other neighbors made so many calls to the police and the prop­erty's listing agent that the own -er imposed a 30-day minimum, which exempts it from the city's short-term rental rules and attracts a more stable type of tenant.

Coalition of unlikely allies Prop. F unites unlikely bed­

fellows - housing activists and landlords; unions, especially hotel workers; and neighbor­hood groups - to oppose short­term rentals. They hope their diverse coalition will offset their more-modest campaign war chest of $3 75,000, most of it ($300,000) from Unite Here, the hotel workers' union.

"We are a bunch of grassroots folks," saidJanan New, executive director of the San Francisco Apartment Association, which represents landlords. "Ours is a neighborhood-driven move­ment."

But Airbnb has a potent grassroots weapon: its popular­ity with tech-savvy, globe-hop­ping San Franciscans. A stun­ning 138,000 city residents have been Airbnb guests or hosts in just the past year, the company said. It is e-mailing them seek­ing their support. By contrast, San Francisco has 441,401 regis­tered voters, about half of whom voted in the last election.

\A/hen th.c\1 r-o.::11rh th.o _ +h~+!c-_+h...-=,. .rih.11.c-.lr..h... _____ __ I A .;T'h,.,,h'eo J.,,_.."' l _,u_..,.c,,.,.r, -=-... .o.,:,,.o.-+

The anti-Prop. F contingent says temporary rentals actually help with housing by letting residents generate extra income to afford spiraling costs, as well as bringing new business to local merchants in outlying neighborhoods. They charge that Prop.Fis too extreme, pointing to the lawsuit provision as an incitement to frivolous lawsuits, to the reporting re­quirements as a privacy vio­lation and to the annual cap as unnecessarily harsh.

"I don't think the situation warrants this level of control, scrutiny and reporting," said Fran Maier, an empty-nester who hosts paying guests in two bedrooms ofher Potrero Hill home. A former tech entrepre­neur, she now makes a six-figure rental income, which allows her to devote time to advising start­ups in exchange for equity, to do volunteer work and to make upgrades to her house.

If Prop. F passes, Maier said she'd rent her entire house for the allowed 75 days a year to generate the maximum income, but wouldn't turn her rooms into long-term rentals because she needs them for family and friends. ''Prop. F won't bring in any more housing," she said.

Law in place since February San Francisco long banned

short-term rentals in private homes until a law to regulate and rein them in took effect in February. Prop. F opponents say the city should give the new law time to work, noting that the Board of Supervisors has al­ready updated it and can contin­ue to do so. Any amendments to Prop. F would require another citywide vote, a huge hurdle.

"Ordinances can be changed, strengthened, modified - and an initiative can't," Maier said.

The new Office of Short-Term Rental Administration and Enforcement has fined nine property owners a total of

v ~ \i.

orrs-orrremarnrgrns­for each address.

"Interested parties," including neighbors within 100 feet. can sue violators - both hosts and hosting platforms. If they win, they can receive special dam­ages up to $1,000 a day, plus attorney fees and costs.

It's a misdemeanor for hosting platforms to list unlawful units, with fines up to $1,000 per unit per day. Platforms must remove listings when they reach the 75-daycap.

Prohibits short-term rental of in-law units.

Hosts who are renters must show proof that their unit's owner agrees it.can be a short­term rental.

When people register as hosts, the city will noti­fy everyone living within lOOfeet.

connoem1a1 aaca-rur hotel-tax collection.

Lawsuits against hosts but not hosting plat­forms now are allowed by building residents, a unit's owner and hous­ing nonprofits. Dam­ages are limited to attorney fees and costs.

It's now a misdemeanor for hosts who violate the law, but there are no penalties for hosting platforms.

Permanent residents of in-laws now can rent them short term. Va­cant in-law units cur­rently can't be rented short term.

The city notifies build­ing owners when rent­ers apply to be hosts.

No such provision ex­ists.

Private enforcement will help make sure people obey the law.

Holding accountable platforms like Airbnb is the most efficient way to enforce the law.

In-law units were legal­ized for affordabl'e housing; using them for temporary visitors un­dercuts that.

Ensures that landlords can control use of their properties.

Allows people to know what's happening in their neighborhood.

Big financial incentives will spawn frivolous lawsuits by neighbors.

Dozens of websites list vacation rentals, so bad actors can hop from one to another. Private companies shouldn't have to enforce the law - that's the city's job.

Unfairly applies differ­ent standards to differ­ent properties. Hurts in-law residents, who tend to be tower- in­come.

The existing provision is sufficient.

Violates privacy.

$155,000 for illicit short-term rentals in recent weeks. It's received 212 complaints about vacation rentals so far this year, and 187 last year. Of those 399 cases, 206 are still active. Offi­cials said it was a ''labor-in­tensive manual process" to research what happened with the closed cases.

~~ In Insight: Debra J. Saunders says both sides have a point. E3

litigation will wipe out the legiti­mate hosting community in San Francisco."

"Nine violations is a pretty pathetic record to hold out as a sign that the city is cracking down," said Dale Carlson, co­chairman of Prop. F committee Shar~Better SF. The city's lack­luster enforcement is why Prop. F gives neighbors and nonprof­its the right to sue violators, he

said. But the threat of those law­

suits chills local hosts, who say they fear a rash of frivolous cases. While neighbors who sue hosts and prevail in court can collect their expenses plus pen­alties up to $1,000 a day, hosts who are sued and exonerated still must pay to defend them­selves in court.

"The expanded right oflitiga -tion is lopsided," said Li, the West Portal host. "If Prop. F passes,thethreatofexpapded

But some neighbors of vaca­tion rentals say the lawsuits would help.

"When people rent these houses, it's a vacation for them - they stay up late partying, smoking and drinking," said a Telegraph Hill resident who lives next door to a full-time vacation rental in an upscale single-family house. "It was a frat house in there all the time; there were people throwing beer bottles from the rooftop and urinating in the street."

Over many months, he and

:olks;· saic:tJanan New, executwe director of the San Francisco Apartment Association, which represents landlords. "Ours is a neighborhood-driven move­ment."

But Airbnb has a potent grassroots weapon: its popular­ity with tech-savvy, globe-hop­ping San Franciscans. A stun­ning 138,000 city residents have been Airbnb guests or hosts in just the past year, the company said. It is e-mailing them seek­ing their support. By contrast, San Francisco has 441,401 regis­tered voters, about half of whom voted in the last election.

Airbnb's local users represent "a bigger political base than anything else in the city," Le­hane said. "They are an enor­mous asset and are now mobiliz­ing over this issue."

Full-time vacation rentals A Chronicle report this year

showed that Airbnb had about 5,500 listings in the city, two­thirds of them entire homes. While most appeared to be rented only occasionally, at least 350 entire properties looked like full-time vacation rentals (al­though some could be suites within homes). And Airbnb has 205 hosts who control three or more properties. Their holdings add up to 993 properties.

.,

Those are the types ofbad actors that Prop. F will affect, its backers say.

"The measure is aimed at commercial hosts taking mul­tiple units off the market that could house regular San Fran­ciscans," said Sara Shortt, exec­utive director of the Housing Rights Committee of San Fran­cisco. "Airbnb provides an in­centive for landlords to clear buildings of permanent resi­dents."

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @cs aid

DATE: October 19, 2015

TO: Stevenson Planning Commission

FROM: Kristi Versari

SUBJECT: Short-term Rentals/Zoning Discussion

Thank you for the opportunity to provide my input on the home rental zoning discussions. Unfortunately, I am not able to attend the workshop this evening so I am providing my comments to you in writing for your consideration.

It is critical that the Planning Commission distinguish between the issue of the conflicting interpretations of the Stevenson Code regarding the rental of residences and the issue of whether or not regulation of short-term rentals is needed in Stevenson. These are two different issues that should be addressed separately.

1 - The first issue is strictly a code interpretation issue.

In 2013, a neighbor of a home in Stevenson whose owners considered renting on a short-term basis had concerns over potential neighborhood disruptions and asked the Planning Commission not to approve the application. The City had initially approved the rental but subsequently reversed the decision, concluding that the rental of a residence on a short-term basis was not allowed under current code since the current code does not explicitly list the rental of a home as an allowed use in residential zones.

Based on the later interpretation, no one can rent their home on either a short-term or long-term basis in Stevenson since neither rental is specifically listed. This interpretation is the opposite of the Supreme Court of Washington’s ruling that rental is a residential use regardless of duration, and that silence regarding a fundamental residential use such as renting a residential home cannot be construed to imply disallowance of the use. I urge the Planning Commission to revisit its later interpretation of the code based on the findings from the Supreme Court ruling and to allow the rental of residences in the residential areas of Stevenson regardless of duration.

2- The second and totally separate issue in front of the Planning Commission is whether or not to regulate short-term rental homes in Stevenson.

As pointed out above, code interpretation can be resolved without implementing short-term rental regulations in Stevenson. Therefore, we need to ask ourselves, absent any interpretation of the code issues, does it make sense to regulate short-term rental homes in Stevenson?

Cities faced with this issue first ask if there are documented problems that need to be addressed in their jurisdiction. Most Commissions in small towns with few rentals decide not to bother with cumbersome, time consuming, and expensive regulations unless there are real

issues that cannot being addressed by their local code. There are no such documented issues with short-term rentals in Stevenson and the recent survey results demonstrated a positive community attitude towards visitor lodging in general.

Established resort communities (Cannon Beach, Manzanita, etc.) have used funding from taxing short-term rentals of second homes which, unlike Stevenson, is the prevalent type of residence in these resorts. A few of the larger cities with significant numbers of short-term rentals (Bend, Portland, etc.) and large budgets only recently began to regulate rentals. Seattle requires all rental homes to be licensed and inspected, including long-term rentals. Most of the cities with short-term rental regulations have hundreds of rentals and documented problems that led to their regulations. They also expect the lodging tax revenues generated will at a minimum cover the cost to implement and administer the regulations, and most expect to generate profits to be used to promote tourism. This is not always the case however. San Francisco recently implemented regulations on short-term rentals and employs 6 full-time employees to administer the program. They expected millions in additional tax revenues from over 6500 rentals, however only 400 owners had applied for permits by the deadline. The other 6000 owners are ignoring the new regulation and not paying lodging taxes. The employees are spending most of their time attempting to track down the non-conforming homes/owners.

Stevenson, by comparison, appears to have about 5 short-term rental homes in the city limits. Assuming each home generates $20,000 per year, the total rental income is $100,000. The lodging tax in Stevenson is 2.7%, which results in about $2,700 of lodging tax revenue per year. It is doubtful this amount covers time spent to study the issue not to mention the continued costs that will be incurred during this draft ordinance process, public hearings, city council meetings, implementation and administration of the new program. This is not a good use of tax payers’ dollars and serves no benefit to Stevenson’s economy. Instead, efforts and dollars in support of increasing tourism, lodging, and local employment should be encouraged. These are the goals that were chosen by the community in its Comprehensive Plan. These are the goals that should be priorities, not seeing Stevenson as a bedroom community opposed to visitors.

In conclusion, I urge the Planning Commission not to pursue the regulation of short-term rentals to address the question of “is a short-term rental an allowed use in Stevenson?”. Following the courts’ direction, it is clear that it is an allowed use so you don’t need to regulate it in order to allow it in the code. The current zoning code could simply be amended to include rentals as an allowed use in order to address any ambiguity that may exist when interpreting the code. I also strongly urge the Planning Commission not to pursue the regulation of short- term rentals in Stevenson since, as stated above, it would be expensive, cumbersome, and at odds with Stevenson’s tourism/lodging strategy and the community goals stated in its Comprehensive plan.