Airbnb Showdown On San Francisco’s November Ballot Averted For The Time Being

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It looks like Airbnb is going to get a reprieve on facing a huge regulatory showdown on November’s ballot in San Francisco.

A former planning commissioner and affordable housing activists had paired up to put new regulation on the ballot that would have clarified rules on short-term rentals throughout the city. It would have been far stricter than a set of rules supervisor David Chiu had been working on for the past two years with input from Airbnb.

The group said today that they’re pulling their proposed initiative because it seems like they might be able to work out a compromise legislatively, instead of going through the initiative process. Even though they had collected more than 15,700 signatures to qualify for the ballot’s deadline today, they’re holding off and will reconsider for the November 2015 ballot instead.

Even though Airbnb has been headquartered out of San Francisco for the past six years, it’s operating in a legal gray area. Technically, you need a conditional use permit to offer residential rentals for less than 30 days. That hasn’t stopped San Francisco hosts from listing thousands of spaces on the platform, however.

Activists had raised concerns around how Airbnb hosts may be subverting rent control and zoning laws that are meant to keep housing affordable to long-term San Francisco residents.

“We have the worst housing crunch since the 1906 earthquake,” said Dale Carlson, one of the main proponents of the initiative. “This is not the time to be cannibalizing our housing stock for tourists.”

Chiu’s competing legislation would have limited Airbnb hosts to renting out their spaces for 90 days of the year. But this group, which includes former planning commissioner Douglas J. Engmann and housing activist Calvin Welch, felt like it didn’t go far enough. Their proposed initiative would have called for a public registry of all hosts, who would have to show permission from their landlords and proof of insurance. It would also have required hosts to follow existing zoning regulations, which could limit spaces to certain parts of the city instead of neighborhoods across town.

“We think neighborhoods should have a say in whether this activity is legalized in their neighborhoods, instead of providing a blanket rezoning of the city,” Carlson said.

That doesn’t mean this will be a cakewalk for Airbnb.

“I think [Chiu’s] legislation is dead,” Carlson said. “I didn’t find a single supervisor who was ready to back him.”

He added, “It was very easy for us to get the signatures. People are not happy. It’s a remarkable thing that a company like Airbnb can reach a $10 billion valuation with a business model that is dependent on people willingly defying the law.”

Update: Airbnb said in a statement: “We have long believed that we can all work together to fashion responsible rules that protect the public interest and let San Franciscans share the home in which they live. We look forward to working with everyone on legislative proposals as we move forward.”

The company is seeing regulatory blowback in some of its other most popular markets. The company has been running a campaign throughout New York City subways touting the benefits of hosting in terms of tourism and tax revenue.