San Francisco Is Ground Zero for an Airbnb Freakout
A little over a week ago, a series of perplexing ads popped up on Muni bus shelters and billboards around San Francisco. Sponsored by the home-sharing platform Airbnb—an online service that lets people rent their rooms and houses to strangers—the ads made it seem as though the tech company wanted extra credit for paying the city millions in hotel taxes: “Dear Public Library System,” read one, “we hope you use some of the $12 million in hotel taxes to keep the library open later. Love, Airbnb.”
Rather than respond with gratitude, many San Franciscans were offended. The campaign was met with a wave of criticism. Airbnb quickly took down the ads and apologized. But in a lot of ways, the damage was done.
Airbnb is a seven-year-old tech company now valued at $25 billion. Its young founders are now billionaires themselves. And its ad debacle epitomizes how a startup with such an innocent-sounding origin story has become a magnet for indignation during a period of tumultuous change in San Francisco. During this decade’s tech boom, San Francisco neighborhoods have gentrified rapidly. Home prices have surged, as have rents, putting the city in the grip of a housing crisis.
Much of that built-up tension will come flooding out tomorrow when San Franciscans head to the polls to vote on Proposition F—known to many as the Airbnb initiative—which would more severely restrict Airbnb-style short-term rentals. The measure pits San Franciscans who say Airbnb is chasing long-term renters out of the city against residents who say Airbnb gives them a bump in income that allows them to stay.
Airbnb, for its part, has stuck to the claim that its business is beneficial to the middle class. ”Home sharing is making it possible for thousands of middle class families to make ends meet and stay in the city,” Christopher Nulty, a spokesperson for Airbnb, tells WIRED, adding that Proposition F falsely draws a line between regular San Franciscans sharing their homes and a housing crunch that has existed for decades. Opponents say the surge in short-term rentals takes housing that would otherwise be occupied by long-term tenants off the market, restricting the supply of housing even more, driving regular rents ever higher. (Some of those opponents brought their frustrations straight to Airbnb: Earlier today, housing activists—complete with a brass band—reportedly stormed Airbnb’s headquarters in San Francisco’s South of Market district.)
Whatever the outcome of Proposition F, the debate over whether Airbnb helps or harms San Francisco won’t end. It may not even impact Airbnb’s bottom line in a huge way: the home-sharing company rents rooms everywhere in the world except Syria, Iran and North Korea. And San Francisco is far from its largest market. (That would be Paris, where Airbnb is holding a big conference in less than two weeks.)
But Airbnb’s battle in San Francisco is significant. This is Airbnb’s hometown, not to mention the hub of today’s global tech boom. San Francisco has become a symbol of the promise and perils that boom represents. Which makes the city’s Proposition F—the biggest ballot test the so-called “sharing economy” has ever faced—not just a referendum on Airbnb in San Francisco but on the company and all it stands for, period.
San Francisco’s Housing Crunch
San Francisco is in the midst of an affordable housing crisis. On this point, at least, everyone agrees. The median rent for a one-bedroom apartment in San Francisco is about $4,000 per month, and the median home price is $1.1 million—a 60 percent increase from five years ago, according to The New York Times, citing online real estate database Zillow.
That makes Proposition F an attractive excuse for San Franciscans to air their grievances. The measure would tighten regulations on short-term rentals for hosts and platform providers such as Airbnb. (Other companies that would be affected include HomeAway, VRBO, and FlipKey.) It would limit the number of nights a unit can be rented each out each year to 75; require short-term rental platforms and individual “hosts” to submit quarterly reports to be the San Francisco Planning Department; and allow neighbors report on each other when violations occur.
Parties on both sides of the ballot have carried out impassioned campaigns. Airbnb has spent heavily on its “No on F” campaign, erecting billboards all over the city and reportedly hiring temps from an on-demand temp worker service to advocate for its position. The New York Times, citing reports filed with the San Francisco Ethics Commission, says groups supporting the “No on F” campaign have raised over $8 million. And Airbnb has Chris Lehane, a Washington political operative who once dealt with scandals during the Clinton administration, in its camp as its head of global public policy. The “Yes” campaign, meanwhile, raised about $1 million to support its efforts, according to The Times.
Proponents of Proposition F say the issue is about enforcement. Last year, San Francisco officials created a law to regulate short-term rentals, capping the time hosts can rent a space out to 90 days if they are not present in their homes, but allowing them to rent out a room or a portion of a home for an unlimited amount of time if they’re around during a visitor’s stay. After questions on whether or not the regulation was effective, the law was revised several times. By July, San Francisco had created an office of short term rentals to help deal with handing out registration certificates.
Even so, an estimated 10,000 properties in San Francisco are listed as short-term rentals, according to The Los Angeles Times, while the newly created office has only issued about 700 registration certificates.
Calvin Welch, a longtime housing activist and part-time instructor at San Francisco State University, says Airbnb’s push against Proposition F speaks to “the blatant illegality and disregard for local law shown by Airbnb.” “This is part of [the same problem with] Uber, and others,” Welch says. “There’s this sense of lawlessness among these well-heeled, web-based tech companies, and it’s really quite frightening to people.”
Welch argues that Airbnb’s position that Proposition F is “too extreme” really means that it’s too effective. “Airbnb makes money by abusing the existing ordinance, and it’s obvious that they do,” he says. “They continue to list people who are not registered.”
But Enrico Moretti, a labor economist at UC Berkeley, thinks Airbnb doesn’t have a huge impact overall on the affordable housing crisis. “Let’s say tomorrow, we completely outlaw Airbnb,” he says. “I don’t think rents in San Francisco would change all that much.” However, Moretti says, that move could limit a source of income that San Franciscans might want to take advantage of to help them meet rent costs.
“I think the reason why we’re in a housing crisis is because the city, the planning commission, and the Board of Supervisors (the equivalent of the City Council in San Francisco) have, historically, been extremely reluctant in allowing more housing units in the city,” Moretti says.
Besides, he adds, it’s not like there isn’t already room for the city’s regulations. “It’s not like a Wild West where homeowners and renters can do whatever they want,” Moretti says. “There is a desire on the part of the electorate to find a quick and easy solution. [In the end], it’s a misguided proposition that does little to slow down the increasing rents.”
The Speed of the Tech Boom
Tim Redmond, a former editor of the progressive San Francisco Bay Guardian and current editor and publisher of 48hills.org, a blog about San Francisco, disagrees. He acknowledges that Proposition F isn’t about to solve the entire housing crisis. “But we know why people support this,” he says. “We’ve seen a lot of gentrification in San Francisco, but we haven’t seen it happening at this speed,” pointing to times in the ’80s and the ’90s that San Francisco saw similar changes but was able to cope by passing rent control and expanded eviction protections.
“OK, cities change. Over 20 years, all cities change,” Redmond says. “But the people of San Francisco don’t want to see their city change in a year—in 12 months, an entire neighborhood transformed.”
“But nowadays, the money coming in to tech companies is happening so fast that city regulators can’t keep up.”
Prop F supporters hope the measure gives regulators more teeth to keep Airbnb at bay. But it’s hard to see it resolving the tension gripping the city. Today, San Francisco is a city divided between tech dreamers and residents who say “techie” with the same disdain that “yuppie” evoked in the ’80s. Tomorrow’s vote will bring one side or another a moment of satisfaction. But in the broader conflict over how tech is reshaping cities, Prop F is just another skirmish. The battle will rage on.