S.F. cracks down on Airbnb rentals(sfgate.com)
sfgate.com
S.F. cracks down on Airbnb rentals
http://www.sfgate.com/bayarea/article/S-F-cracks-down-on-Airbnb-rentals-5381237.php
267 comments
Airbnb is well aware that many of their hosts are renting illegally. In NYC, it's illegal to do a rental without the host there for under 30 days unless you have the proper licensing. So nearly all 'whole apt' rentals on airbnb are illegal. Airbnb makes no effort to let hosts know the laws regarding this.
> Airbnb is well aware that many of their hosts are renting illegally
Their entire business model, in fact, depends on it. Welcome to the "sharing economy", that is, the economy of ignoring the laws regarding what it is you're trying to do
Their entire business model, in fact, depends on it. Welcome to the "sharing economy", that is, the economy of ignoring the laws regarding what it is you're trying to do
> smsm42: You make it sound as "sharing economy" is inherently lawless idea, which it is not. Of course, in cities like NY and SF, where people with money can buy any regulation they want, eventually entrenched business interests would buy laws that impede any disruption to their business. But that's hardly a fault of somebody who tries to do something new.
Funny. I kind of like that there are laws on the books to prevent my neighbors from operating an unlicensed and uninsured (Airbnb doesn't insure the unit itself, building or grounds, just the personal possessions of the renter) hotel out of the building I call my home... and all the safety, fire, noise, and other risks that go along with it. Just because you personally don't like a law doesn't mean there aren't a majority of us out there that do.
Funny. I kind of like that there are laws on the books to prevent my neighbors from operating an unlicensed and uninsured (Airbnb doesn't insure the unit itself, building or grounds, just the personal possessions of the renter) hotel out of the building I call my home... and all the safety, fire, noise, and other risks that go along with it. Just because you personally don't like a law doesn't mean there aren't a majority of us out there that do.
The local government puts taxes on hotels to get money from visitors who don't have a vote. In some cases they put regulations on hotels that limit competition or make them more expensive to operate. Then they have regulations that limit the production of new housing, artificially raising the price by preventing the supply from growing. Then they have to implement rent control to control the damage caused by that, which horribly harms the market as well.
And then all anyone complains about is how their neighbor is doing something they don't like with their own home.
And then all anyone complains about is how their neighbor is doing something they don't like with their own home.
You are replying to the wrong comment. I accidentally upvoted you because I didn't realize you were quoting someone else.
I would like the laws that prevent my neighbor from buying a car better than mine, having a lawn greener than mine and complaining about my dog barking too loudly. It's nice that only thing that is required for any selfish wish to become a law is that there are a bunch of selfish people coming together. As long as you have 50%+1, you can do literally anything to those guys in 50%-1, they're in the minority, so vae victis.
This is a waste of my time, I'm sure, but you realize that from the very beginning, the US system of government was set up to avoid that scenario (among others), right? Checks & balances, division of congress, 3 branches of government, etc?
We do have all those wonderful things. However they do not exactly apply to city regulations in SF. Of course, most egregious abuses - like gun laws in DC and Chicago - eventually may get attention of the Supreme Court and even get shut down, but it is a long uphill battle even if the right being restricted is explicitly mentioned in the Constitution as one not to be infringed. But the powers of local authorities to regulate local commerce are unlikely to be challenged by either Congress or Supreme Court, so while all those things are nice and useful, I'm not sure how they would help in this particular case.
I used to rent my apartment exactly as they do on AirBNB, in NYC, about eight years ago. My landlord found out, told me it was a violation of lease, told me to stop. I stopped.
As a result, I never would have thought AirBnB was a very good idea. But here we are, it's worth $10bn. I guess we will find out - either change the laws, redefine the activity, or stop it. Will be interesting to watch. Sucks for those who were evicted over it. I guess I was lucky.
As a result, I never would have thought AirBnB was a very good idea. But here we are, it's worth $10bn. I guess we will find out - either change the laws, redefine the activity, or stop it. Will be interesting to watch. Sucks for those who were evicted over it. I guess I was lucky.
"sharing" - while still extracting value via a middleman...
Yeah, I absolutely hate the term as well. It should be called the peer to peer economy. At the end of the day, there is nothing new here. Ronald Coase's original ideas in the The Nature of the Firm still apply, but now technology supports a firm composed of a single individual.
You are correct that this is not only specific to AirBnB but the whole shared economy. However, things are not black and white and only time will tell how they will settle.
From the article:
"The law I'm using is that the city says there are hotels and there are apartments, and the two shall never meet,"
They have already met!
Clearly, the demand is huge due to the new realities: better technological infrastructure, disappearing middle class, high prices of real estate and high rents in urban areas, the desire to socialize.
The issues are just starting to surface and the laws will have to evolve and adapt.
EDIT, since I can't reply to the comment below:
"Demand is huge for what? For unlicensed short-term rentals that don't pay hotel taxes or follow regulations, thus saving money? This is not news. This is not a "new reality". In fact, it's why the regulations exist in the first place."
I agree with this but that's not among the new realities I was referring to.
Some of the new realities are:
- people have gotten poorer and don't mind the extra income; some needed it pretty desperately
- there is a trend of growing appreciation of urban areas which worsens the first problem
- people have learned to be willing to trust strangers due to the reputation/karma system
- the Internet has taught people to enjoy the social aspect: meeting interesting strangers
From the article:
"The law I'm using is that the city says there are hotels and there are apartments, and the two shall never meet,"
They have already met!
Clearly, the demand is huge due to the new realities: better technological infrastructure, disappearing middle class, high prices of real estate and high rents in urban areas, the desire to socialize.
The issues are just starting to surface and the laws will have to evolve and adapt.
EDIT, since I can't reply to the comment below:
"Demand is huge for what? For unlicensed short-term rentals that don't pay hotel taxes or follow regulations, thus saving money? This is not news. This is not a "new reality". In fact, it's why the regulations exist in the first place."
I agree with this but that's not among the new realities I was referring to.
Some of the new realities are:
- people have gotten poorer and don't mind the extra income; some needed it pretty desperately
- there is a trend of growing appreciation of urban areas which worsens the first problem
- people have learned to be willing to trust strangers due to the reputation/karma system
- the Internet has taught people to enjoy the social aspect: meeting interesting strangers
> Clearly, the demand is huge due to the new realities:
Demand is huge for what? For unlicensed short-term rentals that don't pay hotel taxes or follow regulations, thus saving money? This is not news. This is not a "new reality". In fact, it's why the regulations exist in the first place.
Demand is huge for what? For unlicensed short-term rentals that don't pay hotel taxes or follow regulations, thus saving money? This is not news. This is not a "new reality". In fact, it's why the regulations exist in the first place.
"the economy of ignoring the laws regarding what it is you're trying to do"
not unlike things like Napster..
not unlike things like Napster..
You make it sound as "sharing economy" is inherently lawless idea, which it is not. Of course, in cities like NY and SF, where people with money can buy any regulation they want, eventually entrenched business interests would buy laws that impede any disruption to their business. But that's hardly a fault of somebody who tries to do something new.
You're being downvoted because your argument depends solely on the presumption that any regulation which you personally neither benefit from, are protected by, or otherwise confers advantage to you or removes advantage from your counterparty exists solely because of corruption. This is, to the rest of us, a childish and unproductive perspective.
It has nothing to do with me or my personal benefit. It does a lot with maintaining status quo and protecting existing entrenched interests against change - that, of course, benefits different people from those that are benefitting from status quo. You can call it corruption or you can call it the rule of law, but it's the fact that entrenched interests make local authorities pass laws that benefit them and exclude competition. Of course it is done under the guise of "safety", etc. You can downvote it as much as you like, yet it is the reality that regulation is commonly use to protect entrenched status quo, often at the expense of the consumers.
Check out e.g. this one: http://www.aei-ideas.org/2014/04/thanks-to-a-private-public-...
Is it really a cartel extracting rent from consumers by leveraging limited choice or is it just me seeking my personal benefit (do not let the fact that I have never used NY taxi in my life distract you)?
Check out e.g. this one: http://www.aei-ideas.org/2014/04/thanks-to-a-private-public-...
Is it really a cartel extracting rent from consumers by leveraging limited choice or is it just me seeking my personal benefit (do not let the fact that I have never used NY taxi in my life distract you)?
Laws are made to keep status quo. I'd say, break them.
EDIT2: I did not mean all laws. But law != morality. EDIT: Cool to know that this community downvotes due to disagreement. Or did this comment add nothing to conversation? I won't be commenting again.
EDIT2: I did not mean all laws. But law != morality. EDIT: Cool to know that this community downvotes due to disagreement. Or did this comment add nothing to conversation? I won't be commenting again.
Oh man, I thought it was so that my drinking water is clean, my roads are safe, and that I'm treated fairly when I purchase goods or services in my community.
Thanks for clearing that up for me.
EDIT: "Or did this comment add nothing to conversation? I won't be commenting again."
No. It did not add to the conversation. While I will agree that, at times, laws are lobbied for that attempt to maintain the status quo, the vast majority of laws are to keep society in an acceptable equilibrium (i.e. my rights end where your rights begin).
Thanks for clearing that up for me.
EDIT: "Or did this comment add nothing to conversation? I won't be commenting again."
No. It did not add to the conversation. While I will agree that, at times, laws are lobbied for that attempt to maintain the status quo, the vast majority of laws are to keep society in an acceptable equilibrium (i.e. my rights end where your rights begin).
Those things are all status quo, do you want clean water or innovation? Because apparently in some people's realities you can't have both.
There is literally nothing innovative about AirBnB or Uber. It's just "The Hilton App" or "The Checkered Cabs App", except that they break hotel & taxi law respectively
I would say their pricing models are much more dynamic, but that's because they're just middle men and aren't responsible for the supply side (except providing incentives to increase supply, not actually providing capital, management, etc).
Right but dynamic pricing is precisely why taxicabs are as regulated as they are. It costs you the same amount to get from the Airport downtown on a Friday night as it does Tuesday at midday. And you the tourist know how much it'll cost you when you get there, because the price is regulated.
> It costs you the same amount to get from the Airport downtown on a Friday night as it does Tuesday at midday.
Only in a world with unlimited supply. When demand peaks, you'll either have the price increased ("surge pricing") or people will have to go without when supply can't mean demand.
Only in a world with unlimited supply. When demand peaks, you'll either have the price increased ("surge pricing") or people will have to go without when supply can't mean demand.
No, there really isn't anything innovative about them. I doubt that will stop HN comments from crying "Won't someone think of the INNOVATION" when confronted with regulations to produce an impediment to something they want.
The apartment building I live in here in NYC forbids people from using airbnb and similar services. I'm glad because I don't want to worry about a flux of transients in my building. Some laws may be problematic to vc/startup folks but I'm glad they exist because they protect me.
I feel like the word transients is too often used to refer to homeless people. My impression is that AirBnB caters primarily to upper middle class vacationers. Are they really a problem? This is a serious question as I've never had to deal with this sort of problem.
Given any sufficiently large sample size...
The vast majority of NYC leases forbid subletting of any sort. Leasing or subletting to someone for under 30 days is illegal in NYC if you don't have the proper permits. There is a loophole in the law that makes it legal for you to rent out a room within your apartment for under 30 days while you are present in the apartment, though most leases forbid this as well.
did this comment add nothing to conversation?
Yup. It's a meaningless comment that doesn't back up its aggressive assertion or expand on the mental leap it makes.
- Can you prove that laws are made to keep status quo?
- Why does that alone mean we should break them?
Yup. It's a meaningless comment that doesn't back up its aggressive assertion or expand on the mental leap it makes.
- Can you prove that laws are made to keep status quo?
- Why does that alone mean we should break them?
That's great until you're living next to someone with the same ethos.
I'm about as anti-Law, anti-establishment, anti-authority pro-Snowden as they come... but ...we can't all just go around breaking whatever law without some kinda of "justification"(hopefully moral/ethics based)
Not only are they "well aware," they have likely gone much further and internally documented items that they need to actively avoid talking about, reviewed code/ordinances/statutes for each state, county and locality that could expose them to direct or secondary liability, etc.
"Well aware"... understatement.
"Well aware"... understatement.
I agree, Airbnb is a bad actor here, but by the same token so are the illegal landlords. I don't buy the framing that they are victims of Airbnb's willful attempt to keep them in the dark. They have just as much reason as Airbnb to know the law, just like Airbnb they decided to go into business for the purpose of making money and are responsible for doing so in a lawful manner.
The real victims here are the neighbors and in the case of subletters, the landlords. No one gets upset when the triggerman goes to jail, even if they also wish the Don would go too.
The real victims here are the neighbors and in the case of subletters, the landlords. No one gets upset when the triggerman goes to jail, even if they also wish the Don would go too.
Well yeah, they've got a valuation to worry about. They are not going to let a little something like the law get in the way of that.
It's illegal in SF even if you own your own place:
San Francisco bans all residential rentals of less than 30 days unless the hosts have a conditional use permit - an expensive and cumbersome process that virtually everyone ignores. The ban applies whether the hosts own or rent, paying guests visit frequently or once a year, or hosts rent out a room or an entire dwelling.
... though I'm not sure what the penalty is in that case, as you're not going to get evicted from your own home.
San Francisco bans all residential rentals of less than 30 days unless the hosts have a conditional use permit - an expensive and cumbersome process that virtually everyone ignores. The ban applies whether the hosts own or rent, paying guests visit frequently or once a year, or hosts rent out a room or an entire dwelling.
... though I'm not sure what the penalty is in that case, as you're not going to get evicted from your own home.
If you own your own home, code violations usually result in getting an abatement requiring you to cease that activity, pay fines, or otherwise come into compliance with the law. There are a variety of enforcement mechanisms that can be used ranging from fines to condemning the building depending on how they structured the law.
Same thing in Sweden.
The tenant signed a lease, and should be aware of the clauses within it.
Usually leases forbid subletting w/o the landlords approval.
Usually leases forbid subletting w/o the landlords approval.
At least in this case, it appears to be a law that is being violated, rather than a clause in a lease. The clause in the lease that is getting people evicted states, "any illegal activity". So just reading your lease is insufficient to determine whether or not one could rent a room.
Further, from the article:
"San Francisco bans all residential rentals of less than 30 days unless the hosts have a conditional use permit - an expensive and cumbersome process that virtually everyone ignores. The ban applies whether the hosts own or rent, paying guests visit frequently or once a year, or hosts rent out a room or an entire dwelling."
So at least in SF - anyone using AirBNB at all is breaking the law, irrespective of one's lease or ownership status.
Further, from the article:
"San Francisco bans all residential rentals of less than 30 days unless the hosts have a conditional use permit - an expensive and cumbersome process that virtually everyone ignores. The ban applies whether the hosts own or rent, paying guests visit frequently or once a year, or hosts rent out a room or an entire dwelling."
So at least in SF - anyone using AirBNB at all is breaking the law, irrespective of one's lease or ownership status.
There still is (at least to me) a difference between specific illegal activity involving housing laws and simply any illegal activity in the apartment. Can you get evicted for, say, lying on your taxes from your apartment?
Probably, yes, they could evict you for conducting that particular illegal activity in your apartment. Whether or not a landlord is likely to is a different question. Remember that the clause says that the can evict you, not that they are obligated to. I can imagine a scenario where a landlord might try it if they wanted rid of you for some other reason.
The point here is "using the apartment for an illegal activity".
That's what I mean. I've heard of people getting evicted for drug offenses conducted from the apartment, but not for lying on taxes from the apartment.
If it could be proved that you "used the apartment" in lying on your taxes, I don't see why it wouldn't be legally enforceable.
Most leases include clauses about complying with applicable laws.
I would generally say both are being violated.
Short-term rentals are illegal regardless of lease terms.
In this case, it's not really a sublease because the tenant was occupying the unit at the same time.
But if you profit off illegal activity and/or look the other-way... you have created a nexus with that activity...wilful negligence etc. How do you stay out of the legal crosshairs?
But if you profit off illegal activity and/or look the other-way... you have created a nexus with that activity...wil[l]ful negligence etc. How do you stay out of the legal crosshairs?
You don't. AirBnB is potentially creating a huge amount of legal liability for themselves. It will be interesting to see how it shakes out.
You don't. AirBnB is potentially creating a huge amount of legal liability for themselves. It will be interesting to see how it shakes out.
[deleted]
Particularly painful is the fact that losing one's apartment in San Francisco is also effectively a banishment from the city.
If you're like many people currently living in SF, you can't afford to rent an apartment at current market rates. You don't merely have to find a new apartment; you have to move to a different city. And guess what? If you worked in the city before, your commute costs likely just went up $100-$200 a month.
AirBnB absolutely should be bearing some responsibility here if they have been knowingly withholding information about the legality of subletting in San Francisco. Their risk very low, while the consequences for an unwitting AirBnB host are potentially life-altering in a very real way.
If you're like many people currently living in SF, you can't afford to rent an apartment at current market rates. You don't merely have to find a new apartment; you have to move to a different city. And guess what? If you worked in the city before, your commute costs likely just went up $100-$200 a month.
AirBnB absolutely should be bearing some responsibility here if they have been knowingly withholding information about the legality of subletting in San Francisco. Their risk very low, while the consequences for an unwitting AirBnB host are potentially life-altering in a very real way.
Come on -- you have a rent control apartment well under market value and no inkling that you might be limited in how you can directly profit from that circumstance? No thought that hey maybe I should check with my landlord, or at least give it a google?
Yes I was being serious.
Big red warning: "by using in AirBnB in this zip code you are likely behaving as an illegal hotel and subject to eviction."
To reiterate, the consequences for AirBnB if a host is caught is virtually nothing. The consequences for the host are potentially severe.
AirBnB bears an ethical if not legal responsibility to clarify these laws for potential hosts.
Big red warning: "by using in AirBnB in this zip code you are likely behaving as an illegal hotel and subject to eviction."
To reiterate, the consequences for AirBnB if a host is caught is virtually nothing. The consequences for the host are potentially severe.
AirBnB bears an ethical if not legal responsibility to clarify these laws for potential hosts.
"Likely"? it's either illegal or not. In SF it's illegal.
Not if you own the property and have the proper permit.
Or if you rent out a room in your house while you're still staying there.
It is at least theoretically possible that they have the appropriate hotel permits, is it not? An actual hotel could advertise their rooms on AirBNB if they wanted to, not that I can see why they would.
> AirBnB absolutely should be bearing some responsibility here if they have been knowingly withholding information about the legality of subletting in San Francisco.
Um, AirBnB is effectively illegal everywhere. The number of places it is legal dwarfs the number of places it is illegal.
Of course, if AirBnB decided to operate in places like Vandergrift, PA, people would welcome them (renting a hotel there is normally easy, but becomes a nightmare at times like high-school graduation because of almost no supply) as a way to cushion event-based scarcity.
Like Uber, these companies don't want to operate in the suburbs where people would welcome and defend them. They want to operate in the cities, show hypergrowth, and cash out for billions.
No sympathy for all parties.
Um, AirBnB is effectively illegal everywhere. The number of places it is legal dwarfs the number of places it is illegal.
Of course, if AirBnB decided to operate in places like Vandergrift, PA, people would welcome them (renting a hotel there is normally easy, but becomes a nightmare at times like high-school graduation because of almost no supply) as a way to cushion event-based scarcity.
Like Uber, these companies don't want to operate in the suburbs where people would welcome and defend them. They want to operate in the cities, show hypergrowth, and cash out for billions.
No sympathy for all parties.
The parent is wrong though. It is not the duty of merchants to inform you that something is illegal.
http://en.wikipedia.org/wiki/Ignorantia_juris_non_excusat
In the case of uber you might attempt to make the case that uber is enabling/encouraging/paying people to break the law. That is illegal by itself.
http://en.wikipedia.org/wiki/Ignorantia_juris_non_excusat
In the case of uber you might attempt to make the case that uber is enabling/encouraging/paying people to break the law. That is illegal by itself.
A good point, but not one I was trying to make.
My point was that if AirBnB did anything which limited itself to operating in legal areas, it would be several orders of magnitude smaller.
My point was that if AirBnB did anything which limited itself to operating in legal areas, it would be several orders of magnitude smaller.
If only there was a way to more efficiently allocate housing to people that need it. Oh wait.
Even if you own the place, are there issues with the bank who holds the mortgage (about 2/3 of all homes have mortgages) or the insurance company?
There is essentially never an issue with the insurance company unless you make a claim. The insurance company is happy to take your money regardless of how well or poorly you follow their terms, and will just deny a claim if there is evidence of any violation of the terms.
Good points, gap cover is the key
I'm not sure what you're saying here. Are you suggesting that there's an insurance practice somewhere that will underwrite policies for ABNB renters?
Doesn't Airbnb provide exactly this insurance? https://www.airbnb.com/guarantee
The Host Guarantee is not insurance and should not be considered as a replacement or stand-in for homeowners or renters insurance.
I'm sure there's a law somewhere that says Airbnb can't offer "insurance" because you need license for that. That's why there are many companies called "banc". But what's the practical difference between "insurance" and "guarantee"?
Maybe start with the fact that the guarantee doesn't pay out claims to neighbors, and renter's insurance does.
That's why its not liability insurance, but not all insurance is liability insurance. (Typical homeowner's/renter's insurance includes both liability and non-liability coverages.)
There's a fun little research jag to be had in comparing the two; the big two basic differences I can find are:
* Providing insurance subjects you to state regulation on insurance policies, which are more onerous than those governing warranties.
* Guaranties and warranties indemnify against flaws in a product or service; they protect you from wrongdoing on the part of (or foreseeable by) the vendor providing the service. Insurance indemnifies against damage that is potentially unrelated to the service itself.
The latter difference seems material for something like Airbnb, where the protections you need include liability claims by short-term tenants and liability claims for neighbors, some of which might arise not simply by malicious acts from those tenants but from things like "the tenant left the door unlocked and the whole building got broken into".
Either way: take a closer look at what Abnb is offering here; it's not like renter's insurance.
* Providing insurance subjects you to state regulation on insurance policies, which are more onerous than those governing warranties.
* Guaranties and warranties indemnify against flaws in a product or service; they protect you from wrongdoing on the part of (or foreseeable by) the vendor providing the service. Insurance indemnifies against damage that is potentially unrelated to the service itself.
The latter difference seems material for something like Airbnb, where the protections you need include liability claims by short-term tenants and liability claims for neighbors, some of which might arise not simply by malicious acts from those tenants but from things like "the tenant left the door unlocked and the whole building got broken into".
Either way: take a closer look at what Abnb is offering here; it's not like renter's insurance.
Insurance policies can differ in what they pay for, but I don't see what would disqualify the airbnb guarantee from being essentially insurance policy, albeit with different terms than standard renters insurance.
It seems overly generous to assume AirBnB isn't offering insurance because they can't. Do we have reason to assume that, instead of them simply not wanting to? (As insurance, after all, costs money)
Since the term "insurance" sounds better and more universally accepted, I'd assume they would call it insurance if they could. There might be of course any number of reasons why they do not call it insurance despite it looking like one, I just assume most frequent and most probable one.
[deleted]
They post a warning that you as a host are responsible for making sure you're following all your local laws.
Of course they're skirting the grey area of the law to make a profit. At the same time, every single host who affirms that they're following the laws, when they are not, are at fault.
If you get into the landlord business without bothering to check on local regulations, why should it be AirBnB's fault. Craigslist doesn't make you check a big box that says "renting this out short term is illegal", why should AirBnB?
Of course they're skirting the grey area of the law to make a profit. At the same time, every single host who affirms that they're following the laws, when they are not, are at fault.
If you get into the landlord business without bothering to check on local regulations, why should it be AirBnB's fault. Craigslist doesn't make you check a big box that says "renting this out short term is illegal", why should AirBnB?
"then it seems logical to me that AirBnb should at the very least make the person renting out a place check a box..."
As far as AirBnB is concerned, they provide a big chunk of their value serving as a "marketplace", not necessarily for <30 days sublets. Reputation management, escrow etc. Note you can enter in arbitrary check-in and check-out dates and they have a "/sublets" section as well.
Wiser for them to focus on this value proposition than try to navigate the red tape and ensure legality across the globe.
As far as AirBnB is concerned, they provide a big chunk of their value serving as a "marketplace", not necessarily for <30 days sublets. Reputation management, escrow etc. Note you can enter in arbitrary check-in and check-out dates and they have a "/sublets" section as well.
Wiser for them to focus on this value proposition than try to navigate the red tape and ensure legality across the globe.
Ensuring hosts know that they risk being evicted for renting out their homes should be part of the value they provide.
IANAL, but I suspect that they want to know as little as possible about specific users. If the play dumb and mention that you may need to check with local laws about the legality, then they can play dumb in court. If they know too much, they become complicit in the "crime" and may be fined, etc.
They might "want to know" as little as possible, but they know the exact address of each user, and they definitely know the law in major American urban markets. They can't play dumb in an American court and say "oh I didn't know it was illegal for my residential hosts to rent rooms in SF and NYC!" Like, come on. Judges aren't dumb.
If airbnb reminds people they may face legal risks in participating in the service, the hosts may be less likely to continue, which is not in airbnb's interest.
Oh, I understand the short-term capitalist incentive. It doesn't mean that it's right, legal, or in the company's long term interest. What if a class action lawsuit of hosts getting evicted hit them? I have trouble imagining on which grounds this would be successful, but then again IANA(class action)L.
Assuming they live in a unit subject to The Ellis Act, SF renters benefit from ludicrous amounts of rent control that cause unending headaches for small-scale landlords. No sympathy for the renters in question here whatsoever.
http://en.wikipedia.org/wiki/Ellis_Act
I have personally run into a guy who was subletting his unit out for twice his monthly rent. This is completely illegal and with good reason. The Ellis Act was not put in place to help renters make a little extra cash but rather to protect them from sudden rent increases.
I don't agree with The Ellis Act, in fact I wish it would die because while I think it was well-intended, it has too many unforeseen negative consequences and effects. And before you dismiss me as some teabagger conservative, here's Paul Krugman on the subject of rent control:
http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-...
And AirBnB should know better. No sympathy for them either.
http://en.wikipedia.org/wiki/Ellis_Act
I have personally run into a guy who was subletting his unit out for twice his monthly rent. This is completely illegal and with good reason. The Ellis Act was not put in place to help renters make a little extra cash but rather to protect them from sudden rent increases.
I don't agree with The Ellis Act, in fact I wish it would die because while I think it was well-intended, it has too many unforeseen negative consequences and effects. And before you dismiss me as some teabagger conservative, here's Paul Krugman on the subject of rent control:
http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-...
And AirBnB should know better. No sympathy for them either.
I think you're confusing the Ellis Act with the SF Rent Ordinance, which establishes rent control and other things. The Ellis Act is generally considered to be hostile to tenants and friendly to landlords (as it sets up a sort of loophole to evict rent-controlled tenants).
Viewed as hostile to tenants by tenants I expect. It's a pretty expensive loophole that I've personally seen bring small landlords to economic ruin.
After all, heaven forbid we allow property owners to have control over their own property at any time.
After all, heaven forbid we allow property owners to have control over their own property at any time.
That doesn't make much sense to me: doing an Ellis eviction is a voluntary act by a landlord. If it would bring them to ruin, why would they initiate it?
(I hope your second paragraph wasn't directed at me. I haven't given any indication of my opinions on the laws in question.)
(I hope your second paragraph wasn't directed at me. I haven't given any indication of my opinions on the laws in question.)
In the case of my friend, because she could no longer afford to subsidize the rent of the tenant and they've decided that if they have to pay the mortgage and property taxes of the unit, they might as well live in it (or in the case of the friend, she wanted to move her parents into the unit as opposed to into assisted living).
But even if she just wanted to personally sunbathe in each room of the unit, WTH should such a landlord have to pay a cent towards the relocation expenses of the soon to be ex-tenant? I'm a pretty liberal guy in most ways, but this is utter BS entitlement IMO.
But even if she just wanted to personally sunbathe in each room of the unit, WTH should such a landlord have to pay a cent towards the relocation expenses of the soon to be ex-tenant? I'm a pretty liberal guy in most ways, but this is utter BS entitlement IMO.
Good to see Krugman actually got something right, even if it was back in 2000. SF has many ridiculous laws pertaining to real estate and rentals. If they got rid of rent control and eased their building restrictions they'd have more housing and more affordable housing.
Actually, they wouldn't - but I'm going to preface my comment with Krugman's observation that 'So now you know why economists are useless: when they actually do understand something, people don't want to hear about it.' Also, the argument below doesn't mean I'm endorsing the status quo in SF city politics.
The problems are twofold: geography, and the fact that SF doesn't operate in a vacuum. Geographically, there's water on 3 sides and hills on the 4th. No matter what you do SF is always going to engaged in an uphill fight against density because it's almost as much of an island as Manhattan is. The vacuum is the bigger problem. Even if the mayor and board of supervisors agreed to abolish the planning commission tomorrow and hand out permits to any proposal compliant with building safety codes, it would not do much to accelerate building.
Why? Because neighbors would sue under CEQA, the California Environmental Quality Act. This allows virtually anyone to file a suit alleging that a negative impact on the environment or an insufficiency in the preparation of an environmental impact report, anywhere in CA. This is not just 'the environment' in terms of wild salmon or old-growth forest, though - it includes everything from air quality to aesthetics. I'm expecting to be invited to join a suit on this because I live close to a hospital which is planning a large expansion, and the neighbors a few blocks away are furious about the likely change in traffic patterns and noise during the construction phase, which will last a few years. I don't actually care about this, but on the other hand I have misgivings about the proposed siting of a helipad right across the street from me.
And this leads to the observation that while CEQA has become a go-to example of obstructive red tape/environmentalism gone mad in California, it's actually just a culmination of much longer-standing legal traditions benefiting property owners. Any place that you have sufficient density for people and businesses to annoy each other, property owners end up in court with disputes about who should give way to whom. Grumble as one might about property taxes, nobody wants the value of their property to go down, either on paper in the more abstract sense of having less enjoyment due to (say) a reduction in the pleasantness of one's view or the amount of sunlight one's garden receives (which factors ultimately affect the $ value of their property anyway). If you have paid $$$ to buy a fancy loft with an amazing view of the SF skyline, you and your neighbors are going to be most unhappy if some developer proposes erecting a skyscraper and replacing your view with that of a concrete wall 30 feet away. In a more general context, people are much less enthusiastic about paying property taxes for parks and schools if the erection of tall buildings blocks sunlight from ever reaching them (and that particular complaint is a frequent one in SF, where the hilly geography tends to exacerbate the issue).
The complaints of property owners carry a great deal of weight in arguments over planning, since they provide a large part of the current tax base (vs the hypothetical future tax revenue of any given development) and angry taxpayers are highly likely to vote out officials who don't do their bidding and vote in those who are willing to pass laws restricting the use or development of property. Indeed, annoyed property owners have historically not just objected to new development but have often successfully argued for a halt to existing land use which impacts their enjoyment of property: in a famous English legal case, Sturges v. Bridgeman (1879), a doctor bought a house in a nice neighborhood and then successfully sued a nearby candy-maker, who had been there for years, over the noise of the candy-making. The court reasoned that while the candy maker had indeed been there first, the business was much noiiser than anything else in the neighborhood and it was only a matter of time before someone brought it up, regardless of the fact that the doctor had 'come to the nuisance.' That seems wacky, but think about it in the context of a city like SF that used to have a lot more light industry inside the city borders. If you know the city well at street level, I'm sure you've come across places where there's a bunch of shiny new apartments and hip restaurants, stores etc., except for that one wierd lot with a run down small manufactory/liquor store whatever, that either doesn't fit with the neighborhood any mroe or whose customers have gone away due to changes in traffic patterns. The business situated there makes less and less money, the owners maintain it less and less well, and eventually someone launches a blight lawsuit in an attempt to force the current occupant out.
The practical upshot of this for development is that a developer has to take into account the loss-of-value that a project will impose upon neighboring property as a potential development cost, and a wise developer will secure their agreement by offering to pay that cost to the neighbors up front, because otherwise they'll probably just end up paying the same amount in damages later (unless they gamble on winning an arms race of legal transaction costs, which is much more viable in rural than urban areas).
The problems are twofold: geography, and the fact that SF doesn't operate in a vacuum. Geographically, there's water on 3 sides and hills on the 4th. No matter what you do SF is always going to engaged in an uphill fight against density because it's almost as much of an island as Manhattan is. The vacuum is the bigger problem. Even if the mayor and board of supervisors agreed to abolish the planning commission tomorrow and hand out permits to any proposal compliant with building safety codes, it would not do much to accelerate building.
Why? Because neighbors would sue under CEQA, the California Environmental Quality Act. This allows virtually anyone to file a suit alleging that a negative impact on the environment or an insufficiency in the preparation of an environmental impact report, anywhere in CA. This is not just 'the environment' in terms of wild salmon or old-growth forest, though - it includes everything from air quality to aesthetics. I'm expecting to be invited to join a suit on this because I live close to a hospital which is planning a large expansion, and the neighbors a few blocks away are furious about the likely change in traffic patterns and noise during the construction phase, which will last a few years. I don't actually care about this, but on the other hand I have misgivings about the proposed siting of a helipad right across the street from me.
And this leads to the observation that while CEQA has become a go-to example of obstructive red tape/environmentalism gone mad in California, it's actually just a culmination of much longer-standing legal traditions benefiting property owners. Any place that you have sufficient density for people and businesses to annoy each other, property owners end up in court with disputes about who should give way to whom. Grumble as one might about property taxes, nobody wants the value of their property to go down, either on paper in the more abstract sense of having less enjoyment due to (say) a reduction in the pleasantness of one's view or the amount of sunlight one's garden receives (which factors ultimately affect the $ value of their property anyway). If you have paid $$$ to buy a fancy loft with an amazing view of the SF skyline, you and your neighbors are going to be most unhappy if some developer proposes erecting a skyscraper and replacing your view with that of a concrete wall 30 feet away. In a more general context, people are much less enthusiastic about paying property taxes for parks and schools if the erection of tall buildings blocks sunlight from ever reaching them (and that particular complaint is a frequent one in SF, where the hilly geography tends to exacerbate the issue).
The complaints of property owners carry a great deal of weight in arguments over planning, since they provide a large part of the current tax base (vs the hypothetical future tax revenue of any given development) and angry taxpayers are highly likely to vote out officials who don't do their bidding and vote in those who are willing to pass laws restricting the use or development of property. Indeed, annoyed property owners have historically not just objected to new development but have often successfully argued for a halt to existing land use which impacts their enjoyment of property: in a famous English legal case, Sturges v. Bridgeman (1879), a doctor bought a house in a nice neighborhood and then successfully sued a nearby candy-maker, who had been there for years, over the noise of the candy-making. The court reasoned that while the candy maker had indeed been there first, the business was much noiiser than anything else in the neighborhood and it was only a matter of time before someone brought it up, regardless of the fact that the doctor had 'come to the nuisance.' That seems wacky, but think about it in the context of a city like SF that used to have a lot more light industry inside the city borders. If you know the city well at street level, I'm sure you've come across places where there's a bunch of shiny new apartments and hip restaurants, stores etc., except for that one wierd lot with a run down small manufactory/liquor store whatever, that either doesn't fit with the neighborhood any mroe or whose customers have gone away due to changes in traffic patterns. The business situated there makes less and less money, the owners maintain it less and less well, and eventually someone launches a blight lawsuit in an attempt to force the current occupant out.
The practical upshot of this for development is that a developer has to take into account the loss-of-value that a project will impose upon neighboring property as a potential development cost, and a wise developer will secure their agreement by offering to pay that cost to the neighbors up front, because otherwise they'll probably just end up paying the same amount in damages later (unless they gamble on winning an arms race of legal transaction costs, which is much more viable in rural than urban areas).
Good to see Krugman actually got something rightThey would certainly have more housing, but I'm pretty sure it wouldn't be any more affordable. There is simply more people who want to live there than it could possibly support, even now. Hell, I'm a developer and I can't even afford to live there.
It most certainly would be more affordable, but just not immediately. There is a backlog of 30+ years of market correction to endure before things return to where they should be. How quickly that correction occurs depends on the political will of those governing the city.
Wait until rent control becomes as politically popular as the minimum wage. Or when academics start scouring for positive effects of RC as hard as they do for the MW (and get the inevitable validating study).
Then, he will almost certainly come out in favor.
Then, he will almost certainly come out in favor.
Airbnb doesn't have to know about laws in every places, but if it knows about such laws (and that they're being actively enforced) in SF and NYC, why allow people to announce or rent places there in the first place?
There are plenty of services (online streaming) that will tell you "sorry, our service is not available in your country/city/etc".
The fact Airbnb is allowing this to continue makes me question their ethics. It's all good they want to change the law but while they haven't had success in the area, is it worth the bad press and headaches for renters?
There are plenty of services (online streaming) that will tell you "sorry, our service is not available in your country/city/etc".
The fact Airbnb is allowing this to continue makes me question their ethics. It's all good they want to change the law but while they haven't had success in the area, is it worth the bad press and headaches for renters?
I have lived in 6 different jurisdictions in three countries. None of them allowed short term rentals (<30 days) without appropriate zoning, license, et cetera. This is not about differing laws in differing locales. This is about ignoring widely applicable law . . . granted law that is widely ignored with little consequence. AirBnB would not have a business if they made a good faith effort to comply with the law.
This is about ignoring widely applicable law
It seems that technology and culture have moved faster than law (shocking, I know) and that laws that might have been a good idea in one set of circumstances aren't anymore.
It seems that technology and culture have moved faster than law (shocking, I know) and that laws that might have been a good idea in one set of circumstances aren't anymore.
Alternatively, it could be that the law is more relevant than ever. The web (and airbnb in particular) has made it far more practical to turn the single family next door to mine into a hotel.
Does this mean that the law that says you can't do this is obsolete, or more relevant than it has ever been?
In the past, I was unlikely to suddenly discover that I live next to a hotel, because it was impractical. Now that it can be accomplished by going to a website, entering an address, and hitting the "create hotel" button, I need that legal protection.
Does this mean that the law that says you can't do this is obsolete, or more relevant than it has ever been?
In the past, I was unlikely to suddenly discover that I live next to a hotel, because it was impractical. Now that it can be accomplished by going to a website, entering an address, and hitting the "create hotel" button, I need that legal protection.
Or the laws are still good ideas, but startups "move fast and break things" as an excuse to circumvent the laws for their own growth and profit. I'm sure companies ignoring the law to increase profits is also incredibly shocking.
Their business model is illegal almost everywhere people would want to stay. It's not an ethical company. They're betting on their disruptive quality to overcome the ethics.
> The fact Airbnb is allowing this to continue makes me question their ethics.
Don't ascribe ethics to a company. Companies are not people. Companies don't care about ethics. They care about legal responsibility.
Don't ascribe ethics to a company. Companies are not people. Companies don't care about ethics. They care about legal responsibility.
Companies are made of people. (Some) people care about ethics. (Somes) companies care about ethics.
For a company that is based on trust (https://www.airbnb.com/trust) I expect more from them than the lowly behavior we're used to see from other well known corporations that don't care.
For a company that is based on trust (https://www.airbnb.com/trust) I expect more from them than the lowly behavior we're used to see from other well known corporations that don't care.
why allow people to announce or rent places there in the first place?
Because they get a cut?
Because they get a cut?
That's true. So perhaps that cut is high enough to make the rest worth it. I'm taking Airbnb out of my hip&cool list of companies :)
> The fact Airbnb is allowing this to continue makes me question their ethics.
Laws and ethics are not the same thing. In fact, it is often ethical to break a law.
Laws and ethics are not the same thing. In fact, it is often ethical to break a law.
That's obvious and well known. Perhaps I should have phrased it as "their ethics towards their customers". Better now? I'm not discussing any of the laws involved.
As an SF renter, this makes me happy. I have met too many people personally that have an extra bed room(or even keep their lease and moved to a lower-rent city) that they rent out to subsidize their rent. This reduces stock for actual renters and drives prices up.
I only partially agree with your comment. I wish there were a way to distinguish between people truly profiting off rent-controlled property (as @numlocked said) and sometimes not even living here, and those just trying to get a little extra cash to make ends meet.
If you think about a year's worth of rental cost, no matter how much you rent out your apartment for in those short term bursts, you're probably never going to even get close to breaking even. And especially if you're one of those people not in a booming industry, it can really help when you're out of town for a weekend or so to try and defray the cost of living. Because while rent is controlled, nothing else in this city is.
If you think about a year's worth of rental cost, no matter how much you rent out your apartment for in those short term bursts, you're probably never going to even get close to breaking even. And especially if you're one of those people not in a booming industry, it can really help when you're out of town for a weekend or so to try and defray the cost of living. Because while rent is controlled, nothing else in this city is.
Not so sure about your second point - If a person has a place that has been rent controlled for 5+ years, this is quite doable.
Additionally, how is renting out a "rent controlled" place at market rates not transferring income from the actual landlord, to the lessee, while defeating the "control" at the same time?
Additionally, how is renting out a "rent controlled" place at market rates not transferring income from the actual landlord, to the lessee, while defeating the "control" at the same time?
It's curious, because there's no reason to think the 'actual landlord' has a right to that additional income. They signed a lease at a given price for a given term. They could have signed that lease at dramatically higher terms. Just because the tenant made out good on the deal in the long term doesn't negate the initial contract. It's not like the landlord must be the only one that makes out best on any given contract...
Except that most rental agreements allow "use of the premises" or some such wording to the named lessee, and forbid sub-leasing.
The contract that you're referring to doesn't give the renter the ability to then turn around and do whatever they want with the living space for their own financial benefit.
The contract that you're referring to doesn't give the renter the ability to then turn around and do whatever they want with the living space for their own financial benefit.
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How does forcing someone to leave an extra bedroom empty drive up prices?
Short-term tenants generally pay substantially more on a per night basis than real roommates (long-term tenants). Forcing only long-term tenants would thus presumably cause rents to move towards what the long-term tenant market can handle rather than the aggregate nightly rate achievable by accommodating lots of short-term tenants.
Naturally the reality is vastly more complicated but I believe that's the basic reasoning behind the "short term rentals drive prices up" line of thought.
Naturally the reality is vastly more complicated but I believe that's the basic reasoning behind the "short term rentals drive prices up" line of thought.
Not only that, but some owners may decide to go full short-term leases to increase profits. That reduces the market for long term leases, hurting the housing market.
Now this is definitely the case for cities like Paris, were the law exists but is not enforced. I don't know of it's true for San Francisco where the price is already high from high paid locals.
Now this is definitely the case for cities like Paris, were the law exists but is not enforced. I don't know of it's true for San Francisco where the price is already high from high paid locals.
Short term tenants are also exempt from the laws that protect SF nightmare tenants and having to pay $40k to move someone out. I know someone who has a legal in law unit in SF who basically decided not to ever rent it out because of those stories.
Lowers the effective rent for the apartment.
Let's say everyone in San Francisco rents out their apartment for $200 once a month. Now landlords can raise the rent by $200, since people could afford the rent before, but are now making an extra $200 a month. Meanwhile, you, the person that doesn't illegally rent out their apartment, has to compete for apartments with people that can pay more because they break the law.
That's where the angst is coming from.
Let's say everyone in San Francisco rents out their apartment for $200 once a month. Now landlords can raise the rent by $200, since people could afford the rent before, but are now making an extra $200 a month. Meanwhile, you, the person that doesn't illegally rent out their apartment, has to compete for apartments with people that can pay more because they break the law.
That's where the angst is coming from.
I'm not sure I agree; by that kind of logic there should be a law banning two income house holds, working from home, or any other creative way people might derive extra value from there living space surely that drives up the cost of housing as well?
There's no law that says that if you ban one thing that drives up the price of housing that you must ban all others. At some point people must make a judgement about the human costs and human benefits of a thing.
Short term occupancy doesn't have a very good load factor. Perhaps 50% of the time, that bedroom is going to be empty even when it's being actively rented out short term.
Whereas if the person can't profit from it and doesn't need it, they may simply downsize, allowing another renter who does need it to move into the unit and use all the bedrooms, giving a much higher load factor.
Not saying it's necessarily a good idea, but banning short term rentals can help increase the utilization, and thus the availability, of existing housing resources.
Whereas if the person can't profit from it and doesn't need it, they may simply downsize, allowing another renter who does need it to move into the unit and use all the bedrooms, giving a much higher load factor.
Not saying it's necessarily a good idea, but banning short term rentals can help increase the utilization, and thus the availability, of existing housing resources.
Supply and demand.
Why don't we just fucking let capitalism run where it may, instead of having all these stupid complicated controls which end up being exploited for profit anyway?
Because unfettered capitalism makes life miserable for a lot of people as externalised costs are not accounted for.
Your anger is misplaced. The root cause of housing stock is not how people are using the current stock but the complete refusal to amend the situation to build more housing stock. Many landlords (living in their property or renting out) actively oppose rezoning changes that would permit more housing in the city. Those renting out are very much in favor of current zoning because they earn far more money from units because of limited stock.
Furthermore, a lot of those I know who have an extra room and rent out on AirBnB are usually renting out to people actively trying to move to the city and need a place to stay (1-3 months) until they find a unit to live in. For those AirBnB hosts that keep a lease, almost all of them that I know are renting out on AirBnB for more than 30 days at a time (usually to people trying to move to the city), because its not convenient or cost effective to manage back to back short-term stays when you aren't living in the unit. At the end of the day, those subleasing are usually just absorbing the difference between the rent control they secured originally and market value, which would be absorbed by the landlord anyways the moment the lease was given up. i.e. If Bob rents a rent controlled unit from Alice at $1000 a month and then decides to sublet it at $1500 a month 2 years later to Carol, then Bob is making $500 dollars profit. However if Bob gave up the lease, Alice would rent it out again at $1500 to Carol anyways. Either way, Carol ends up paying $1500 a month.
Furthermore, a lot of those I know who have an extra room and rent out on AirBnB are usually renting out to people actively trying to move to the city and need a place to stay (1-3 months) until they find a unit to live in. For those AirBnB hosts that keep a lease, almost all of them that I know are renting out on AirBnB for more than 30 days at a time (usually to people trying to move to the city), because its not convenient or cost effective to manage back to back short-term stays when you aren't living in the unit. At the end of the day, those subleasing are usually just absorbing the difference between the rent control they secured originally and market value, which would be absorbed by the landlord anyways the moment the lease was given up. i.e. If Bob rents a rent controlled unit from Alice at $1000 a month and then decides to sublet it at $1500 a month 2 years later to Carol, then Bob is making $500 dollars profit. However if Bob gave up the lease, Alice would rent it out again at $1500 to Carol anyways. Either way, Carol ends up paying $1500 a month.
Doesn't this also reduce the demand for renting by all the people who are renting those extra bedrooms? If all those extra bedrooms stopped being rented out, why wouldn't this increase the demand for renting elsewhere and thus drive the price up?
On the other hand, that allows some people to live in the city when otherwise they wouldn't be able to afford it. The SF rental situation is not created by the few people that profit from temporarily renting to tourists.
Many of the comments on sfgate refer to the moral ambiguity of profiting off of a rent-controlled property -- definitely an interesting wrinkle.
I don't see any ambiguity there. Airbnb is just one such abuse.
In talking to people, I've heard countless examples of "master tenants" charging incoming roommates much higher rent than an "even split" on the rent. In one extreme, a tenant in a 3 bedroom was living 100% rent free while the other two tenants covered the entire costs - until they learned of this and moved out on principle. Tenants moving in as roommates on rent controlled apartments are apparently even offering cash bribes exceeding $1k for the privilege of obtaining a spot.
Quite the broken system, imho.
In talking to people, I've heard countless examples of "master tenants" charging incoming roommates much higher rent than an "even split" on the rent. In one extreme, a tenant in a 3 bedroom was living 100% rent free while the other two tenants covered the entire costs - until they learned of this and moved out on principle. Tenants moving in as roommates on rent controlled apartments are apparently even offering cash bribes exceeding $1k for the privilege of obtaining a spot.
Quite the broken system, imho.
Rent control is a broken system. You have cases of someone with a long rent controlled $1500 rent on a 3bdr that would go for 3k or 4k market rates. If they listed a bedroom at $500 on CL they would get ten thousand of applicants.
Furthermore, the quality of the applicants would be far lower than putting it on for market rate.
Someone who can afford $1500 a month is more likely to be gainfully employed with greater job security. They are also likely to be able to contribute much more to a household. Even if someone were to rent out a room for $500, it behooves them to select from the applicant pool those who are capable of paying $1500 a month.
Someone paying $500 and capable of $500 is less likely to want to contribute to common spaces and shared household necessities.
Someone who can afford $1500 a month is more likely to be gainfully employed with greater job security. They are also likely to be able to contribute much more to a household. Even if someone were to rent out a room for $500, it behooves them to select from the applicant pool those who are capable of paying $1500 a month.
Someone paying $500 and capable of $500 is less likely to want to contribute to common spaces and shared household necessities.
So you're saying that the main disadvantage with rent control is that poor people can afford the rent?
No, I'm 100% against rent control. What I'm saying that even if I had rent control and rented a room pro rata based on floor space, I would probably still choose someone as my roommate that could afford the high rent. I've had roommates that wouldn't pitch in for things like fixing things in the house and replacing things that needed replacing, and whose contributions to the commons were not desirable, like worn out, stained furniture.
If you put a ad on craigslist for a room for $500 today, you would go mad trying to select for the best roommate. Absent other automatic filters for roommates, like being able to filter on lifestyle choices/preferences, the ability to afford a high rent is a poor proxy for other desirable traits, but better than the alternative of no proxy. It's not like craigslist currently let's me put an ad out that only allows considerate, easy-going roommates with no undesirable habits to apply.
If you put a ad on craigslist for a room for $500 today, you would go mad trying to select for the best roommate. Absent other automatic filters for roommates, like being able to filter on lifestyle choices/preferences, the ability to afford a high rent is a poor proxy for other desirable traits, but better than the alternative of no proxy. It's not like craigslist currently let's me put an ad out that only allows considerate, easy-going roommates with no undesirable habits to apply.
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You don't personally want to live with the poors -- that's fine, you should get to live with whomever you want. I just think that using public policy to create a city-wide filter based on class and income just so you can get to inbox zero faster when you post a craigslist ad is maybe not right.
You're now just forming an ad hominem by twisting my words. Good for you. I want to live with people with the wherewithal to contribute equitably to the commons of the household in which I live. In my current household, I currently supply most of the common goods (sponges, garbage bags, soap, tools for home improvement, laundry detergent, toilet paper, cleaning supplies, etc.). It gets pretty old after a while when no one else feels the need to contribute equitably. If I left things up to my roommates to take care of things, we'd run out of those basic needs. We are two days away from no toilet paper today and I'm certain that I'm the only one that thought to take care of that. I'm the only one in the house that buys the tools we need to fix things (drills, screwdrivers, pliers, etc.). I would prefer to live with people who, when inconvenienced by something that inconveniences us all, won't hesitate to pony up the cash to resolve it.
Personally, I absolutely despise the situation that exists in the city and thinks everyone is selfish and unwilling to bell the cat by applying the only solution that makes sense: more housing. The landlords are selfish. Those with rent control are selfish. The homeowners are selfish. The only people who aren't selfish are those at the bottom of the food chain getting taken to the cleaners by the landlords, primary tenants on the lease and the homeowners blocking all zoning improvements.
I'm not poor, but I'm certainly not rich either. I earn enough to to live in this city, but certainly can't afford to live comfortably at $1500 a month, especially when I help out two other family members with money. That being said, absent other better systems for filtering, putting out a classified ad at a high rate is still a practical proxy for what you want in a roommate, even though I'm one of those filtered out by an ad for a $1500 room.
If you were a master tenant with a 3 bedroom for $1500 a month, would you put a classified ad for each room at $500 each? Answer honestly. I don't think anyone would (or does since I've never seen such an ad on craigslist and I know that there is no lack of rooms that should cost that much with ~175,000 rent control units in San Francisco.)
Furthermore, with supply as constrained as it is, nobody will actually read you ad or care what it is you want in a roommate. At $500, everyone will apply whether or not they actually meet your criteria. Let's say you want to live with single, pet-free non-smokers between 30 and 40 and you say so in your ad. Do you think that hundreds to thousands of people who don't meet that criteria will refrain from sending you an email for a chance at living in a $500 a month room?
Personally, I absolutely despise the situation that exists in the city and thinks everyone is selfish and unwilling to bell the cat by applying the only solution that makes sense: more housing. The landlords are selfish. Those with rent control are selfish. The homeowners are selfish. The only people who aren't selfish are those at the bottom of the food chain getting taken to the cleaners by the landlords, primary tenants on the lease and the homeowners blocking all zoning improvements.
I'm not poor, but I'm certainly not rich either. I earn enough to to live in this city, but certainly can't afford to live comfortably at $1500 a month, especially when I help out two other family members with money. That being said, absent other better systems for filtering, putting out a classified ad at a high rate is still a practical proxy for what you want in a roommate, even though I'm one of those filtered out by an ad for a $1500 room.
If you were a master tenant with a 3 bedroom for $1500 a month, would you put a classified ad for each room at $500 each? Answer honestly. I don't think anyone would (or does since I've never seen such an ad on craigslist and I know that there is no lack of rooms that should cost that much with ~175,000 rent control units in San Francisco.)
Furthermore, with supply as constrained as it is, nobody will actually read you ad or care what it is you want in a roommate. At $500, everyone will apply whether or not they actually meet your criteria. Let's say you want to live with single, pet-free non-smokers between 30 and 40 and you say so in your ad. Do you think that hundreds to thousands of people who don't meet that criteria will refrain from sending you an email for a chance at living in a $500 a month room?
So you want to remove rent control and exclude hundreds of thousands of people from living in the city just to make it easier for you to find good roommates.
To borrow the words of master spy Sterling Archer: Do you want anarchist protestors? Because that's how you get anarchist protestors.
To borrow the words of master spy Sterling Archer: Do you want anarchist protestors? Because that's how you get anarchist protestors.
I'm getting to the point where I should stop feeding the troll, but I'll bite one last time.
No, I would grandfather in everyone in the city with rent control that currently has it and I would work on a legal mechanism that allows the grandfathered in right to rent control to be separated from the underlying property via a mechanism similar to one I've written about before here: https://news.ycombinator.com/item?id=7437658
Rent control messes up all housing markets, reducing the quality and quantity of housing for everyone. We can't undo the mistake that has been made, so the best we can do is find a way to phase it out in a way that allows the market to recover from rent control, but preserve the expectations of those that have come to rely on it. The city needs to increase the supply of housing and the way rent control currently works acts like a lock on a database. The city currently has ~175000 locks on n properties that are essentially undevelopable until you remove all the locks on the property.
I don't want rent control. I, and even most people with rent control, would actually be far better off in a parallel universe where San Francisco had never had rent control. Only those who have been in a property for decades actually benefit. The majority pay far more than they should be for the first couple of years and then in later years end up paying roughly what they would have in the parallel universe where rent control had never happened.
Furthermore, if you lifestyle changes and you want to raise a family, you've fucked yourself out of the market you love because you can't afford anything in the market by the time you decide you might want something different. When someone moves into a rent control place, they effectively check out of the housing market like an ostrich with their head in the sand. Basically, had they been back in the housing market every few years as their housing needs and expectations changed, they would have demanded more housing supply in the city. Rent control permits people to remain blissfully ignorant of the housing situation until one day something happens that causes them to be out of their unit such as an Ellis Act eviction. At that point I think to myself "boo hoo", because if they really wanted to live in a city forever they would have either bought property back when they first moved here or they would have demanded increased housing supply long ago so that they would never find themselves in a housing market they were priced out of. People who argue for rent control are downright selfish, since they basically get the benefits of a scarce good without any of the sacrifice (like saving for a down payment) and actively prevent developments which would reduce the scarcity so that others just like them that arrive later may also enjoy the benefits of living in a city like San Francisco.
No, I would grandfather in everyone in the city with rent control that currently has it and I would work on a legal mechanism that allows the grandfathered in right to rent control to be separated from the underlying property via a mechanism similar to one I've written about before here: https://news.ycombinator.com/item?id=7437658
Rent control messes up all housing markets, reducing the quality and quantity of housing for everyone. We can't undo the mistake that has been made, so the best we can do is find a way to phase it out in a way that allows the market to recover from rent control, but preserve the expectations of those that have come to rely on it. The city needs to increase the supply of housing and the way rent control currently works acts like a lock on a database. The city currently has ~175000 locks on n properties that are essentially undevelopable until you remove all the locks on the property.
I don't want rent control. I, and even most people with rent control, would actually be far better off in a parallel universe where San Francisco had never had rent control. Only those who have been in a property for decades actually benefit. The majority pay far more than they should be for the first couple of years and then in later years end up paying roughly what they would have in the parallel universe where rent control had never happened.
Furthermore, if you lifestyle changes and you want to raise a family, you've fucked yourself out of the market you love because you can't afford anything in the market by the time you decide you might want something different. When someone moves into a rent control place, they effectively check out of the housing market like an ostrich with their head in the sand. Basically, had they been back in the housing market every few years as their housing needs and expectations changed, they would have demanded more housing supply in the city. Rent control permits people to remain blissfully ignorant of the housing situation until one day something happens that causes them to be out of their unit such as an Ellis Act eviction. At that point I think to myself "boo hoo", because if they really wanted to live in a city forever they would have either bought property back when they first moved here or they would have demanded increased housing supply long ago so that they would never find themselves in a housing market they were priced out of. People who argue for rent control are downright selfish, since they basically get the benefits of a scarce good without any of the sacrifice (like saving for a down payment) and actively prevent developments which would reduce the scarcity so that others just like them that arrive later may also enjoy the benefits of living in a city like San Francisco.
If we could just make being poor a crime.
Not splitting rent based on square footage is actually illegal in SF. If your roommates find out, they just have to go to the Tenant's board and complain and whoever benefited will be required to pay the difference back.
Of course the solution for rent-seeking (a bit of a pun here, sorry) behavior produced by regulation is always more regulation. And when that produces unintended consequences, we always can have more regulation to fix that regulation, and ad infinitum, ad nauseam.
Is somebody proposing more regulation? I don't see it if so. Everybody seems to be merely proposing that people follow the regulations already in place.
While breaking the law is generally a bad idea and generally one should be punished for it, I was disappointed that both the article and comments on the article didn't delve into whether it is a 'good and fair' law in the first place.
I understand the ambiguity of a tenant virtually subleasing a property, which is a clause normally either allowed or not allowed in a tenant's lease, but the blanket ban of renting a room for a short number of days seems like a law that hotel lobbyists worked hard to get in place.
I understand the ambiguity of a tenant virtually subleasing a property, which is a clause normally either allowed or not allowed in a tenant's lease, but the blanket ban of renting a room for a short number of days seems like a law that hotel lobbyists worked hard to get in place.
This isn't black and white.
Many landlords struggle because their tenants are paying below market rents. This is a particular problem in San Francisco, but also in other cities like NY.
On the one hand, you can say, "Joe taxi driver can barely afford rent, what's wrong with him leasing out his room when he's out of town?"
Then look at it from the landlord's point of view. They say, "I can't get a free market rent, because the law says that I can't evict Joe Taxi Driver. So I have to settle for less money, then he goes and rents the room out without paying me a dime."
Then look at Jane NewToTown. Jane says, "I would like to pay market rate for Joe's place. I can't, but if I want to stay for a few nights I can pay the renter who gets below market rates, rather than the landlord."
AirBnB isn't the cause of the problem - it exists because there is a problem that it being arbed.
Many landlords struggle because their tenants are paying below market rents. This is a particular problem in San Francisco, but also in other cities like NY.
On the one hand, you can say, "Joe taxi driver can barely afford rent, what's wrong with him leasing out his room when he's out of town?"
Then look at it from the landlord's point of view. They say, "I can't get a free market rent, because the law says that I can't evict Joe Taxi Driver. So I have to settle for less money, then he goes and rents the room out without paying me a dime."
Then look at Jane NewToTown. Jane says, "I would like to pay market rate for Joe's place. I can't, but if I want to stay for a few nights I can pay the renter who gets below market rates, rather than the landlord."
AirBnB isn't the cause of the problem - it exists because there is a problem that it being arbed.
I think what we are saying, essentially, is that Joe Taxi Driver is leveraging the fact that he cannot be evicted to engage in aggressive rent-seeking behavior.
That would be a reasonable conclusion if time wasn't a factor. Imagine if Joe Taxi Driver moved in when he could afford rent, and then the price of housing tripled in two years. Now, Joe's new roommates expect to pay 3x what Joe's old roommates paid. Additionally, Joe has far less housing security - he cannot move, even if he get's a 50% increase on his taxi receipts, he still can no longer afford market-rate rent.
It's unclear if Joe is now 'leveraging the fact that he cannot be evicted' because the cost of eviction is so high, and his 'aggressive rent-seeking behavior' is now merely an effort to make a little extra money on the moral hazard that has been dropped into his lap.
It's unclear if Joe is now 'leveraging the fact that he cannot be evicted' because the cost of eviction is so high, and his 'aggressive rent-seeking behavior' is now merely an effort to make a little extra money on the moral hazard that has been dropped into his lap.
I call bs here, if landlords are struggling then they should get out of the business of being a landlord in a market with regulations that don't support their business model. There are more than enough people willing to buy a unit to move into it themselves. I'm 100% anti rent control myself, but to claim landlords are struggling is disingenuous.
There is no rule out there that says that landlords have a right to their business model on their terms. I'm aware of several units in this city where the landlord grew up in a unit their parents purchased way back in the day, who then moved out of the city to the suburbs. They now profit handsomely because they self select for tenants that are likely to move out of the city or outgrow a unit.
There is no rule out there that says that landlords have a right to their business model on their terms. I'm aware of several units in this city where the landlord grew up in a unit their parents purchased way back in the day, who then moved out of the city to the suburbs. They now profit handsomely because they self select for tenants that are likely to move out of the city or outgrow a unit.
If you put in laws that say owners can not profit from their buildings, but their renters can, then you will have chronic underinvestment in housing infrastructure as a consequence. You wind up feeding the problem you are trying to solve. This has happened in both San Francisco and New York City.
I'm not saying cities should be an unzoned and unplanned free-for-all, but good intentions at the expense of capital have unintended consequences.
I'm not saying cities should be an unzoned and unplanned free-for-all, but good intentions at the expense of capital have unintended consequences.
If the demand is high enough, someone will invest in infrastructure regardless of who profits from the existing stock.
Right. But increasing the marginal cost of serving people, or decreasing the marginal revenue, means that you will build for less people than otherwise.
To oversimplify the supply and demand curve...
Let's say that there are 2 populations of people: - 100 people in Group 1 who can pay $500/month - 100 people in Group 2 who can pay $1000/month
Let's say that something (rent control, regulation, taxes, whatever) takes away $300 per month of what you would collect in rent.
Let's say that the cost of building an apartment building, amortized over time costs $400 per month.
You could build 200 units, and everyone is happy.
But with marginal costs higher than revenue for low income renters, you will probably just build the higher income housing.
This is oversimplified, but is what's happening in essence in New York and San Francisco. The well intentioned rent controls and other regulations are pushing the cost of development so high that builders are either neglecting the bottom and middle of the market, or skimping as much as possible when they're forced to address it.
We can argue that some of the regulation (no lead paint, etc) is good, but when you tilt the balance too far against the owners, then owners put their money elsewhere (stocks, bonds, etc.)
To oversimplify the supply and demand curve...
Let's say that there are 2 populations of people: - 100 people in Group 1 who can pay $500/month - 100 people in Group 2 who can pay $1000/month
Let's say that something (rent control, regulation, taxes, whatever) takes away $300 per month of what you would collect in rent.
Let's say that the cost of building an apartment building, amortized over time costs $400 per month.
You could build 200 units, and everyone is happy.
But with marginal costs higher than revenue for low income renters, you will probably just build the higher income housing.
This is oversimplified, but is what's happening in essence in New York and San Francisco. The well intentioned rent controls and other regulations are pushing the cost of development so high that builders are either neglecting the bottom and middle of the market, or skimping as much as possible when they're forced to address it.
We can argue that some of the regulation (no lead paint, etc) is good, but when you tilt the balance too far against the owners, then owners put their money elsewhere (stocks, bonds, etc.)
That's a kind of ad-hominem attack on a law. Just because the hotel lobbyists might favor it doesn't mean it's not a good or fair law. The fact of the matter is that these sorts of provisions are supported not just by hotel lobbyists,[1] but property owners generally. Short-term renters reduce property value in neighborhoods, and property owners love measures to ban such rentals.
[1] Invoking the specter of "hotel lobbyists" is intensely amusing to me. If hotels had such good lobbyists, cities wouldn't have almost universally exorbitant (over 14% in NYC) hospitality taxes, which quite negatively affect the hotel industry.
[1] Invoking the specter of "hotel lobbyists" is intensely amusing to me. If hotels had such good lobbyists, cities wouldn't have almost universally exorbitant (over 14% in NYC) hospitality taxes, which quite negatively affect the hotel industry.
What's an example of any law that's currently in place which you feel is unjust or unfair?
People throw around the word "unjust" too easily. There are plenty of laws I don't like (e.g. drug laws, sentencing generally), but I believe that in a democratic society people have the right to regulate individual behavior that has collateral effects. There are only a few laws I consider "unjust" either because society has very little real interest in regulating the behavior (e.g. bans on homosexual marriage), or because the results are wholly out of proportion with any legitimate interest (e.g. three strikes laws).
I dislike most housing-related regulations, but it's very difficult for me to find "injustice" in the commercial regulations voters (who are mostly property owners) impose upon themselves.
I dislike most housing-related regulations, but it's very difficult for me to find "injustice" in the commercial regulations voters (who are mostly property owners) impose upon themselves.
The issue with taking the stance that the voters imposed it on themselves is that voters, particularly of a specific city, are a group that is constantly cycling in and out members. I'm only recently of voting age; any regulation that was imposed more than 8 years ago, I had zero say in, let alone the knowledge and experience to have an informed opinion about it.
Beyond that, its hard to say the margins by which such a law passed. If a law passes by 51%, is it still difficult to find 'injustice' (This coming from a person in a state that passed a state constitutional ban against gay marriage by a similar margin)
Beyond that, its hard to say the margins by which such a law passed. If a law passes by 51%, is it still difficult to find 'injustice' (This coming from a person in a state that passed a state constitutional ban against gay marriage by a similar margin)
I'm uncertain if you are addressing me or rayiner, but marriage equality (or more so bans against) is an easy one without even straining.
Do you mean to imply that laws are inherently just and fair?
Do you mean to imply that laws are inherently just and fair?
I just came back from SF having used Airbnb (studio apartment under the house) for the duration of my stay. I looked at hotels and hostels, however the night rate of a hotel was simply too expensive and I hate staying in hostels. Airbnb was a cheaper alternative that meant I could actually afford to stay in SF, while there I used the trams, bought coffees in local coffee shops (not Starbucks), ate in restaurants and visited the Exploratorium, all of which I assume SF gets a slice of through taxes.
My hosts own their property and as a result I think they should be able to rent it out on a short term basis if they want to, they should have to pay a (small) percentage tax of the rate they charge though. I think the law should be looked at if for those who own their property. Villas in Europe are rented out legally all the time and it drives lots of tourism and provides accommodation at much better rates than hotels etc.
If the host rents, then their land lord should be able to evict them if they sublet and they're not allowed to - they agreed to the contract and they should stick to it.
My hosts own their property and as a result I think they should be able to rent it out on a short term basis if they want to, they should have to pay a (small) percentage tax of the rate they charge though. I think the law should be looked at if for those who own their property. Villas in Europe are rented out legally all the time and it drives lots of tourism and provides accommodation at much better rates than hotels etc.
If the host rents, then their land lord should be able to evict them if they sublet and they're not allowed to - they agreed to the contract and they should stick to it.
It sounds like you had a good experience, and this would be a good argument to make to people if you're hoping to get the law changed.
The resistance to this tends to come from people who are concerned about the long term housing stock. It is most profitable to build a studio in your garage and rent it out on airbnb, it is somewhat less profitable to rent it out to a long term tenant, and it's far, far less profitable to build an extra bedroom for a growing family, cause small children don't pay rent and cost you a bundle in child care costs.
Allowing this sort of use would mean that in a bidding war (which is how all property in SF is sold), the people who plan to airbnb part of their house out will hold a huge advantage over someone who is looking for expansion potential for kids. So my take on it is, maybe we should zone some of the SF for single family use. Which, here in SF, we've actually already done.
That's the argument I'd make against allowing unlimited short term rentals in every single corner of SF. I would like to trade my right to engage in short term rentals in exchange for legally enforced expectation that my neighbors won't do this either, because I'd much rather have friends for my kids nearby than a neighborhood of short term vacationers.
We can disagree and resolve it at the ballot box, and I understand the problems with 50%+1 legislation. Some people won't like the outcome. So I guess I'd ask if you feel this sort of zoning in some parts of San Francisco (single family housing, no short term rentals) is so unjust that it is an unreasonable law that should (or must) be disregarded?
The resistance to this tends to come from people who are concerned about the long term housing stock. It is most profitable to build a studio in your garage and rent it out on airbnb, it is somewhat less profitable to rent it out to a long term tenant, and it's far, far less profitable to build an extra bedroom for a growing family, cause small children don't pay rent and cost you a bundle in child care costs.
Allowing this sort of use would mean that in a bidding war (which is how all property in SF is sold), the people who plan to airbnb part of their house out will hold a huge advantage over someone who is looking for expansion potential for kids. So my take on it is, maybe we should zone some of the SF for single family use. Which, here in SF, we've actually already done.
That's the argument I'd make against allowing unlimited short term rentals in every single corner of SF. I would like to trade my right to engage in short term rentals in exchange for legally enforced expectation that my neighbors won't do this either, because I'd much rather have friends for my kids nearby than a neighborhood of short term vacationers.
We can disagree and resolve it at the ballot box, and I understand the problems with 50%+1 legislation. Some people won't like the outcome. So I guess I'd ask if you feel this sort of zoning in some parts of San Francisco (single family housing, no short term rentals) is so unjust that it is an unreasonable law that should (or must) be disregarded?
Airbnb residents are often a nightmare for other tenants in the same building- they often function as de facto customer support and are forced to put up with the extra noise. Beyond the legality, this business model is plagued by extremes.
What's your basis for claiming this is an often occurrence? I have no doubt that there are nightmare airbnb hosts, but often is hardly warranted. I've lived as a roommate in a unit where the master tenant rents out on airbnb and in the dozens of interactions, I can think of at most one case where the person what an inconvenience to me and I can think of no cases where the person was an inconvenience to our neighbors.
> they should have to pay a (small) percentage tax of the rate they charge though
SF and CA already charge plenty of taxes. There's no need for any extra.
SF and CA already charge plenty of taxes. There's no need for any extra.
The lack of interest on the side of AirBnB is not very surprising: They know exactly that renting out apartments without a proper license is illegal in most parts of the world, they just don't care since they can externalize the risk to the owners of the apartments. Personally, I can understand the frustration of the people that are on the loosing end of this business model: Neighbors who find that their building has become a busy hotel complex, landlords who see the value of their property decline by overuse and noise, hotels that face an army of competitors which don't pay taxes and don't comply with existing regulations, and the whole community that faces increasing rents.
Uber provides a similar example by creating a "parallel market" for taxis and putting established companies (which comply with existing regulations) under extreme pressure. In general I'm a big fan of the "free market" model, but gaining an unfair advantage by just ignoring existing laws and hoping to get away with it is not a legitimate business practice, I think.
Uber provides a similar example by creating a "parallel market" for taxis and putting established companies (which comply with existing regulations) under extreme pressure. In general I'm a big fan of the "free market" model, but gaining an unfair advantage by just ignoring existing laws and hoping to get away with it is not a legitimate business practice, I think.
A startup built on an illegal business model in it's most popular markets... sounds like a 20 billion dollar exit.
Enabling a large number of people to more easily do slightly illegal things can be viewed as an opening offer in a negotiation. If the scale is large enough that enforcing existing laws is unrealistic, what often happens is that lawmakers and offenders eventually meet somewhere in the middle.
Unlikely in this case. Berlin for example is going in very much the opposite direction, passing new laws to crack down on short-term rentals, freeing up more properties in the city centre for actual residents.
Why would it be too large to enforce? The drug war certainly isn't.
The drug war is also a spectacular failure and has been a main source of civil rights abuses until 9/11 response overtook it in that capacity (not that it doesn't continue to provide a healthy competition still). But yes, expecting that government wakes up to reason anytime soon may be overly optimistic.
Sounds like a decent way to eventually get ridiculous laws changed.
Some people own their own home and still can't use Airbnb because their HOA (Home Owner Association) made a rule that you can't sublet your house. And if you are found in abayence of this rule, they can fine you any amount they want per day, and then if you still don't comply, they can sell your house and kick you out of it.
So people who have houses with an HOA, they don't technically own their house, they are just borrowing it from the HOA while paying the taxes, insurance, and doing all the work for them to keep the house up.
So people who have houses with an HOA, they don't technically own their house, they are just borrowing it from the HOA while paying the taxes, insurance, and doing all the work for them to keep the house up.
IANAL, but my understanding is that HOAs in California can't put a lien on your property for failing to pay fines, only for failing to pay dues.
Furthermore overly punitive fines aren't allowed, and that rule does in fact have teeth (and is also abused by homeowners to make it more expensive to collect fines from them).
That means if you pay your dues, but not your fine, the only option the HOA has to collect is to sue you. Once you pass the maximum for small-claims, that starts to get really expensive.
Lastly, each homeowner has a common-interest in the HOA, including an equal vote in board-members. For large HOAs, that becomes fairly moot, but for smaller ones, it makes a difference.
Now HOAs aren't all sunshine and roses (I prefer to not live in one, primarily since common-interest property tends to be run quite inefficiently), but it's not as bad as you make it out to be.
Furthermore overly punitive fines aren't allowed, and that rule does in fact have teeth (and is also abused by homeowners to make it more expensive to collect fines from them).
That means if you pay your dues, but not your fine, the only option the HOA has to collect is to sue you. Once you pass the maximum for small-claims, that starts to get really expensive.
Lastly, each homeowner has a common-interest in the HOA, including an equal vote in board-members. For large HOAs, that becomes fairly moot, but for smaller ones, it makes a difference.
Now HOAs aren't all sunshine and roses (I prefer to not live in one, primarily since common-interest property tends to be run quite inefficiently), but it's not as bad as you make it out to be.
Yes, you are correct, on pretty much all of your points.
> IANAL, but my understanding is that HOAs in California can't put a lien on your property for failing to pay fines, only for failing to pay dues.
Yes, however, most HOAs do have ways to make it difficult for homeowners who have become delinquent on fines. One common approach is that the CC&Rs allow a delinquent homeowner to be placed as "a member NOT in good standing", which means that the owner will be precluded from using the association amenities (pool, clubhouse, tennis court, etc.) or even being able to vote for board members, until the fine is paid off and the "good standing" is restored.
> Furthermore overly punitive fines aren't allowed, and that rule does in fact have teeth (and is also abused by homeowners to make it more expensive to collect fines from them).
Not only that, but the Davis-Sterling Act (which is the California state laws that govern common interest developments) as well as most of the local courts in California are very much sided towards the homeowner and against the overall community. Much of the Davis-Sterling Act was written and approved at a time when there was a lot of concern that large community developments would do things to abuse and harm the individual homeowner, or more specifically, that the will of the majority (within a CID) would do things to make life as difficult as possible for those in the minority. Davis-Sterling (and the many of subsequent court cases that dealt with Davis-Sterling) was basically set up to help prevent that as much as possible, unfortunately sometimes to the detriment of well-meaning HOA Boards that are dealing with a delinquent homeowner that understands these loopholes and uses them to willingly violate rules, or skirt out of paying fines, etc.
> IANAL, but my understanding is that HOAs in California can't put a lien on your property for failing to pay fines, only for failing to pay dues.
Yes, however, most HOAs do have ways to make it difficult for homeowners who have become delinquent on fines. One common approach is that the CC&Rs allow a delinquent homeowner to be placed as "a member NOT in good standing", which means that the owner will be precluded from using the association amenities (pool, clubhouse, tennis court, etc.) or even being able to vote for board members, until the fine is paid off and the "good standing" is restored.
> Furthermore overly punitive fines aren't allowed, and that rule does in fact have teeth (and is also abused by homeowners to make it more expensive to collect fines from them).
Not only that, but the Davis-Sterling Act (which is the California state laws that govern common interest developments) as well as most of the local courts in California are very much sided towards the homeowner and against the overall community. Much of the Davis-Sterling Act was written and approved at a time when there was a lot of concern that large community developments would do things to abuse and harm the individual homeowner, or more specifically, that the will of the majority (within a CID) would do things to make life as difficult as possible for those in the minority. Davis-Sterling (and the many of subsequent court cases that dealt with Davis-Sterling) was basically set up to help prevent that as much as possible, unfortunately sometimes to the detriment of well-meaning HOA Boards that are dealing with a delinquent homeowner that understands these loopholes and uses them to willingly violate rules, or skirt out of paying fines, etc.
> "they are just borrowing it from the HOA while paying the taxes, insurance, and doing all the work for them to keep the house up."
I'm not sure if this sentence was meant to be snarky or if this was a genuine comment... if it's the former, then heheh, I will agree that the sentiment of the sentence does have some merit.
But if it's the latter, I just wanted to try and clear something up -- speaking as an owner of a condo (in an HOA) and as the former president of our HOA.
Typically, owners of homes within an HOA are classified as owners in a "common interest development", where owners are all equal share holders of the development as a whole. Meaning, if there are 100 homeowners in a condo community, each homeowner owns an equal share (1%) of that overall community's property.
The owner is not "borrowing" anything from the HOA... especially since the HOA, itself, doesn't actually own anything at all.
The HOA is technically a corporation (yes, all HOAs are incorporated as a corporation, at least in the State of California) which has been chartered to manage and maintain the common interest development property, while maintaining things like the reserve fund, enforcement of the CC&Rs, architectural reviews, etc.
SO as a homeowner in the common interest, you actually own the HOA (and not the other way around).
Furthermore, homeowners within an HOA are granted limited, exclusive use of a certain part of the overall property... in most cases, that is the space inside condo or townhouse unit itself, and maybe a patio or yard, etc.
What's key is the limited part of "limited, exclusive use", as well as what is noted in the CC&Rs, itself, which describes the definition of what is "limited". Yes, these limitations can very well (and usually do) include provisions on what can or cannot be rented out, how long guests can stay within your home, etc. Typically, these provisions are not meant to make life difficult, but these provisions are in place to help maintain the overall property value of the all the homes in the community.
But the most important thing to note is that the CC&Rs are, in fact determined by all of the homeowners, and not by some arbitrary "HOA" or "powers that be", etc. CC&Rs are (or should be) regularly reviewed by the board members of the HOA, and changes are required to be approved by a certain majority (or supermajority) of homeowners by anonymous vote (again, at least this is how it is in the State of California, as dictated by the Davis-Sterling Act).
Bottom line: if you are a homeowner in a condo or townhouse community and feel like you have no freedom to do with the home that you rightfully own, just remember that you actually just own a portion of a much larger community/property, and thus, you are bound by some of the limitations / restrictions that the overall community has placed on each owner. But moreover, if you feel that some of those limitations / restrictions are unjust, unfair, or outdated, then work with the HOA Board (or better yet, actually be on the HOA board) and work with your neighbors to get those rules and regulations changed.
I'm not sure if this sentence was meant to be snarky or if this was a genuine comment... if it's the former, then heheh, I will agree that the sentiment of the sentence does have some merit.
But if it's the latter, I just wanted to try and clear something up -- speaking as an owner of a condo (in an HOA) and as the former president of our HOA.
Typically, owners of homes within an HOA are classified as owners in a "common interest development", where owners are all equal share holders of the development as a whole. Meaning, if there are 100 homeowners in a condo community, each homeowner owns an equal share (1%) of that overall community's property.
The owner is not "borrowing" anything from the HOA... especially since the HOA, itself, doesn't actually own anything at all.
The HOA is technically a corporation (yes, all HOAs are incorporated as a corporation, at least in the State of California) which has been chartered to manage and maintain the common interest development property, while maintaining things like the reserve fund, enforcement of the CC&Rs, architectural reviews, etc.
SO as a homeowner in the common interest, you actually own the HOA (and not the other way around).
Furthermore, homeowners within an HOA are granted limited, exclusive use of a certain part of the overall property... in most cases, that is the space inside condo or townhouse unit itself, and maybe a patio or yard, etc.
What's key is the limited part of "limited, exclusive use", as well as what is noted in the CC&Rs, itself, which describes the definition of what is "limited". Yes, these limitations can very well (and usually do) include provisions on what can or cannot be rented out, how long guests can stay within your home, etc. Typically, these provisions are not meant to make life difficult, but these provisions are in place to help maintain the overall property value of the all the homes in the community.
But the most important thing to note is that the CC&Rs are, in fact determined by all of the homeowners, and not by some arbitrary "HOA" or "powers that be", etc. CC&Rs are (or should be) regularly reviewed by the board members of the HOA, and changes are required to be approved by a certain majority (or supermajority) of homeowners by anonymous vote (again, at least this is how it is in the State of California, as dictated by the Davis-Sterling Act).
Bottom line: if you are a homeowner in a condo or townhouse community and feel like you have no freedom to do with the home that you rightfully own, just remember that you actually just own a portion of a much larger community/property, and thus, you are bound by some of the limitations / restrictions that the overall community has placed on each owner. But moreover, if you feel that some of those limitations / restrictions are unjust, unfair, or outdated, then work with the HOA Board (or better yet, actually be on the HOA board) and work with your neighbors to get those rules and regulations changed.
Ownership means a few things, it's the right to use, and the right to deny use of, and if someone opposes you on your rightful usage or denial, then the unlimited fury of a thousand policemen are available to correct the other person.
You said the HOA doesn't own anything, actually they do "literally own" a portion of the thing that people pay for when buying a house. The right to deny use of your property for subletting (like airbnb). And if you don't comply, the policemen hit you with sticks until you do.
You said the HOA doesn't own anything, they own you, the human unit living in the home via dues. They also own a guarantee of income to whatever human unit lives in that house, that is a higher quality item to own than having ownership of say a cat or car. and the fact that your home serves as security for whatever liabilities the HOA corp board chooses to incur, HOA-burdened property represents a liability rather than an asset. It's a secondary level of government that resembles a banana republic.
There is also a continuing misperception that HOA corporations are miniature democracies. They are not. They have none of the protections for individual rights. So what if 50% of the neighbors don't like something. Majority rule might be fine for setting pool hours for the HOA corp's pool, but majority rule is not a democracy and it is not appropriate for what happens between the bedroom walls of "your" or more specifically "their" home.
The disputes that develop over the propriety and interpretation of restrictions is another cesspool. If there were no HOA corp, the disputes would tend to simply be differences of opinion. Natural barriers to litigation include the cost of litigation and the uncertainty of the outcome. However, the board members of an HOA corp bear no personal responsibility for financing litigation and are driven as much to harm fellow residents as they are to win. If they can cost a homeowner $20,000 and up, then their egos are satiated even if their HOA corp loses. The management companies profit from accusations of violations. The HOA attorney is likewise more concerned about provoking and maintaining the dispute for profit.
Which is why HOA's lower property values significantly by lowering the pool of available buyers.
You said the HOA doesn't own anything, actually they do "literally own" a portion of the thing that people pay for when buying a house. The right to deny use of your property for subletting (like airbnb). And if you don't comply, the policemen hit you with sticks until you do.
You said the HOA doesn't own anything, they own you, the human unit living in the home via dues. They also own a guarantee of income to whatever human unit lives in that house, that is a higher quality item to own than having ownership of say a cat or car. and the fact that your home serves as security for whatever liabilities the HOA corp board chooses to incur, HOA-burdened property represents a liability rather than an asset. It's a secondary level of government that resembles a banana republic.
There is also a continuing misperception that HOA corporations are miniature democracies. They are not. They have none of the protections for individual rights. So what if 50% of the neighbors don't like something. Majority rule might be fine for setting pool hours for the HOA corp's pool, but majority rule is not a democracy and it is not appropriate for what happens between the bedroom walls of "your" or more specifically "their" home.
The disputes that develop over the propriety and interpretation of restrictions is another cesspool. If there were no HOA corp, the disputes would tend to simply be differences of opinion. Natural barriers to litigation include the cost of litigation and the uncertainty of the outcome. However, the board members of an HOA corp bear no personal responsibility for financing litigation and are driven as much to harm fellow residents as they are to win. If they can cost a homeowner $20,000 and up, then their egos are satiated even if their HOA corp loses. The management companies profit from accusations of violations. The HOA attorney is likewise more concerned about provoking and maintaining the dispute for profit.
Which is why HOA's lower property values significantly by lowering the pool of available buyers.
Good.
Before Airbnb, when craigslist was the go to for short term rentals, they were not only cheaper but didn't come along with the stigma of ruining the neighborhood or being treated like a customer instead of a guest. There was much more of a mutual respect and even a feeling of gratitude on both sides. Now with Airbnb the whole things wreaks of an (illegal) business transaction with a flimsy guarantee, neighbors who want to catch you, no such gratitude to speak of and the costs have doubled.
The whole thing is obnoxious.
Before Airbnb, when craigslist was the go to for short term rentals, they were not only cheaper but didn't come along with the stigma of ruining the neighborhood or being treated like a customer instead of a guest. There was much more of a mutual respect and even a feeling of gratitude on both sides. Now with Airbnb the whole things wreaks of an (illegal) business transaction with a flimsy guarantee, neighbors who want to catch you, no such gratitude to speak of and the costs have doubled.
The whole thing is obnoxious.
Higher prices make a lot of sense. Airbnb provides a level of vetting and feedback that adds a lot of value and security to both sides. It's easy to scam someone on craigslist when there's no reputation system.
No it doesn't, I've been scammed as a renter on Airbnb and people have been scammed as hosts. The increased cost comes from the market transition from "let's help eachother while we're both on vacation" to "Come stay at my apartment while I stay at my friends place and make half my rent from you over the weekend."
(just FYI, you wreak havoc if you cause lots of damage, but rotten fish reeks)
What's the rationale behind having laws like these in place? Is it protectionism for the hotel industry, or is it more intended to protect apartment renters from unintended liability issues?
Its about liability and protection of the other people in the building. This type of law has a long history and a lot of things can go very wrong. This is a totally different story from Uber and the taxi industry.
I'm not sure it's all that different from Uber and the taxi industry:
* The medallion system gives owners something significant to lose it they become scofflaws, and while we all have horror stories about cab drivers, anyone who's traveled to Asia (or, for that matter, Italy) knows that we have relatively well-behaved drivers, even in the cohorts selected for worst incentives.
* The taxi companies are required to comply with rules that make taxis part of the fabric of transportation for the whole city (for instance, they're usually required to serve every destination within the city). Uber does not need to comply with these rules, and thus threatens not just cab companies but the transportation system as a whole.
* The medallion system gives owners something significant to lose it they become scofflaws, and while we all have horror stories about cab drivers, anyone who's traveled to Asia (or, for that matter, Italy) knows that we have relatively well-behaved drivers, even in the cohorts selected for worst incentives.
* The taxi companies are required to comply with rules that make taxis part of the fabric of transportation for the whole city (for instance, they're usually required to serve every destination within the city). Uber does not need to comply with these rules, and thus threatens not just cab companies but the transportation system as a whole.
I see your point and I guess I went a little far using "totally". In my mind, the governing factor in the taxi stories is a government created scarcity that results in some serious monopolies ($100,000 medallions). There is also a rather larger segment of private transportation other than cabs. The hotel / motel rules are less about scarcity than a history of really, really bad things happening.
People's homes are a pretty big issue in when threatened by neighbors that can destroy everything you own. People get the possibility of a car accident even if it can be much, much worse.
People's homes are a pretty big issue in when threatened by neighbors that can destroy everything you own. People get the possibility of a car accident even if it can be much, much worse.
I'm reminded of that incident where the Uber driver hit & killed a kid, and the way Uber dropped the driver like a hot rock. After all, they've got nothing to lose!
Why liability would change? Main tenant is on the contract, and she should be liable for any issues arising due to airbnb rental.
Why does it need to be a criminal issue though instead of merely a civil contract law issue?
I would imagine that each landlord and each homeowner's association could come to their own agreements on what is and is not acceptable without the need for laws on the books.
I would imagine that each landlord and each homeowner's association could come to their own agreements on what is and is not acceptable without the need for laws on the books.
"Why does it need to be a criminal issue though instead of merely a civil contract law issue?"
I get the feeling it is more the origin of the law as a business regulation that drives the criminal part. I too wish more things were handled as basic contract law issues.
I get the feeling it is more the origin of the law as a business regulation that drives the criminal part. I too wish more things were handled as basic contract law issues.
I can understand not being pumped about having random people come and go if your neighbor is leasing out their place on a site like this regularly. As a traveler I like the service though.
I'm sure there are some protectionist elements to it, but it also prevents people from taking zoning-laws into their own hands. If an area is zoned as a residential zone, it shouldn't be turned into a commercial (i.e. hotel) zone because a bunch of people decide to turn their properties into nightly-rentals. If somebody decides their apartment would make a great night-club, they can't just make it a nightclub because they own their apartment. Zoning laws are designed to create a symbiotic relationship throughout a community, and AirBNB does very little to discourage its users from ignoring those laws.
One positive side effect of regulation is that overt racial discrimination is illegal.
Black and Jewish folks used to have a hell of a time getting a hotel room in the US at various points in history. That became illegal with the 1960s civil rights laws, but recent media coverage suggests discrimination is rampant on Airbnb.
It also used to be nearly impossible to find wheelchair-accessible hotels.
I have no idea what the solution is here, but there are good things about regulation of these kinds of businesses.
Black and Jewish folks used to have a hell of a time getting a hotel room in the US at various points in history. That became illegal with the 1960s civil rights laws, but recent media coverage suggests discrimination is rampant on Airbnb.
It also used to be nearly impossible to find wheelchair-accessible hotels.
I have no idea what the solution is here, but there are good things about regulation of these kinds of businesses.
There is also concern about the large scale conversion of long term residential and single family housing stock into short-term vacation rentals in a severely supply constrained region.
It is protectionism for hotels. However, HOAs and City Councils will make the claims that this is to "protect" apartment owners from unknowing short-term sub-renting of their properties.
We have the same problem here in Austin, except it is Taxis being protected against private drivers like Uber and Lyft. They claim this is to protect citizens from unlicensed drivers.
We have the same problem here in Austin, except it is Taxis being protected against private drivers like Uber and Lyft. They claim this is to protect citizens from unlicensed drivers.
So, in this climate of protests and such, I wonder which news outlet will go with the "just trying to make ends meet due to the high cost of housing due to all the techies, a couple used Airbnb (one of those techie startups) and got evicted. now their apartment has been rented by a tech startup employee and they are homeless" angle. It seems like the perfect storm type story.
These kinds of airbnb-based eviction articles make me laugh. The overwhelming media narrative here is "all evictions are bad, look at this rich uncaring landlord forcing this poor hardworking american into homelessness". But the other narrative is "tech companies are evil". So what happens when an evil tech company (or, by extension, someone using one like AirBnB) gets evicted? Are we supposed to hate the landlord for evicting, or love the landlord for fighting the man.
The articles I read on these subjects always feel schizophrenic
The articles I read on these subjects always feel schizophrenic
The first time I used AirBnB in SF, the renter invited me to use all the facilities of his apartment complex, including as much free coffee as I wanted, the gym, swimming pool, etc.
This struck me as not particularly sustainable. It also struck me as morally questionable. It was only a matter of time before the chickens eventually came home to roost...
This struck me as not particularly sustainable. It also struck me as morally questionable. It was only a matter of time before the chickens eventually came home to roost...
If that tenant had had a roommate, would that roommate not be consuming the same facilities? If so, would that be morally questionable?
At the end of the day, that tenant is probably paying homeowner's due proportional to the square footage of their unit. e.g. someone with 2 rooms is likely paying twice as much in dues as someone with 1 room.
I know that when I rented the penthouse unit in an apartment building with my father, we were paying almost 2x as much in building dues as the other units in the building, since we has 2x the space. Our roommates used the same facilities we did.
At the end of the day, that tenant is probably paying homeowner's due proportional to the square footage of their unit. e.g. someone with 2 rooms is likely paying twice as much in dues as someone with 1 room.
I know that when I rented the penthouse unit in an apartment building with my father, we were paying almost 2x as much in building dues as the other units in the building, since we has 2x the space. Our roommates used the same facilities we did.
The tenant in question had converted his living room and kitchen into multiple additional "bedrooms" so that he could handle more capacity via AirBnB
In some cases the distinction may be subtle; in this case, not really.
In some cases the distinction may be subtle; in this case, not really.
He had people sleeping in the kitchen? Sleeping on the couch makes sense, but converting the kitchen into a sleeping area certainly sounds like an outlier.
How is it legal to take a commision from illegal activity? If people are using AirBNB for breaking the law, AirBNB should be prosecuted too.
As a resident in Manhattan where the situation of Airbnb renting facilitating illegal use of apartments. We pay a lot of money to have security in our buildings with doormen and other secure systems. We do not want transients in our buildings.
Airbnb is intentionally setting up a situation where people are breaking the law and this should not be tolerated. They could easily have a questionnaire that vets facilities for legal Airbnb use as part of the signup process for cities such as NYC and SF. Moreover, they should have Airbnb employees verify that the apartments listed on the Airbnb site are following laws.
The real issue is that a number of reputable firms are funding Airbnb and it is these firms people should pressure. They are in fact, funding a firm which knowingly facilitates illegal activities in NYC and SF.
According to Crunchbase these firms include: Y Combinator, Sequoia Capital, Greylock Partners, SV Angel, Andreessen Horowitz, Jeff Bezos, Ashton Kushner, and others. Some of these firms such as Sequoia, Greylock, and Andreessen Horowitz get funds from other organizations or individuals and these funders of Sequoia, Greylock, and Andreessen Horowitz should withdraw their funds if their funds are knowingly used to finance illegal activities or a site that facilitates illegal activities.
These firms are knowing funding a firm which they know is helping people to break the law and should be held accountable for funding firms which break the law.
These firms should hire as managers of Airbnb and other firms which they fund who have zero tolerance for breaking the law or trying to violate the spirit of the law.
I do applaud Airbnb's attempts to lower the cost of transient stays in NYC and SF. But this should be done through a legal mechanism such as building low-cost hotels in NYC and SF (with partners perhaps) and then listing these low-cost hotels on their site.
Airbnb is intentionally setting up a situation where people are breaking the law and this should not be tolerated. They could easily have a questionnaire that vets facilities for legal Airbnb use as part of the signup process for cities such as NYC and SF. Moreover, they should have Airbnb employees verify that the apartments listed on the Airbnb site are following laws.
The real issue is that a number of reputable firms are funding Airbnb and it is these firms people should pressure. They are in fact, funding a firm which knowingly facilitates illegal activities in NYC and SF.
According to Crunchbase these firms include: Y Combinator, Sequoia Capital, Greylock Partners, SV Angel, Andreessen Horowitz, Jeff Bezos, Ashton Kushner, and others. Some of these firms such as Sequoia, Greylock, and Andreessen Horowitz get funds from other organizations or individuals and these funders of Sequoia, Greylock, and Andreessen Horowitz should withdraw their funds if their funds are knowingly used to finance illegal activities or a site that facilitates illegal activities.
These firms are knowing funding a firm which they know is helping people to break the law and should be held accountable for funding firms which break the law.
These firms should hire as managers of Airbnb and other firms which they fund who have zero tolerance for breaking the law or trying to violate the spirit of the law.
I do applaud Airbnb's attempts to lower the cost of transient stays in NYC and SF. But this should be done through a legal mechanism such as building low-cost hotels in NYC and SF (with partners perhaps) and then listing these low-cost hotels on their site.
I think there is an interesting comparison to be made between Airbnb and past file sharing companies like Megaupload or Napster. In the ideal situation, these services can be used completely legally. However, a majority of these businesses' customers seem to be using the service for illegal means. These companies profit on the scale of their business, so they have little motivation to cut down on that illegal activity. The only real difference is the victim of the "crime" taking place. The victims in the case of file sharing companies were a powerful and centralized industry. The victims in the case of Airbnb are its customers. Is the fact that the laws are being broken by the same people they are meant to protect enough to make Airbnb more viable long term then the other businesses founded on illegal transactions?
I don't think this entirely will kill AirBnB.
For example, I used AirBnB when doing an internship. Since it was >30 days, it was legal. I liked that I was able to read reviews, verify identities, and in a worst case scenario contact my credit card company's fraud department and get my money back.
There's a huge demand for medium term sublets in SF. People doing internships, people who need a place to get some breathing room for a couple months while they hunt for a more permanent space, that sort of thing.
Is it worth billions? Probably not. But I'd say it plays as useful a role as say, Craigslist.
For example, I used AirBnB when doing an internship. Since it was >30 days, it was legal. I liked that I was able to read reviews, verify identities, and in a worst case scenario contact my credit card company's fraud department and get my money back.
There's a huge demand for medium term sublets in SF. People doing internships, people who need a place to get some breathing room for a couple months while they hunt for a more permanent space, that sort of thing.
Is it worth billions? Probably not. But I'd say it plays as useful a role as say, Craigslist.
Many posts here express dismay at Airbnb's selective disregard for the law.
Companies often ignore laws when it is expected to be profitable. It's a simple matter of risk management. And it is a straightforward consequence of our economic and legal system.
See this 2012 article "Should Companies Obey the Law If Breaking It Is More Profitable?" http://www.huffingtonpost.com/dana-radcliffe/should-companie...
Companies often ignore laws when it is expected to be profitable. It's a simple matter of risk management. And it is a straightforward consequence of our economic and legal system.
See this 2012 article "Should Companies Obey the Law If Breaking It Is More Profitable?" http://www.huffingtonpost.com/dana-radcliffe/should-companie...
Then we should change the equation. Maybe if we started prosecuting executives that break the law instead of just fining the companies, we would start having companies that follow the law.
Exactly. Companies need to receive the death penalty for some of these infractions so that there is no incentive to game the laws.
After a investors lose 100%, they will stop funding companies that do illegal stuff.
After a investors lose 100%, they will stop funding companies that do illegal stuff.
I never understood the Airbnb business model.
Sure, some regulations seem designed primarily to protect existing interests, but more often, there are very good reasons for the regulation.
For instance, I believe hotels must maintain a record of visitors car license plates. And they are often inspected by health departments.
I'm all for innovation, but I don't think we can throw out an entire regulatory framework that took decades to develop. There is just too much that can go wrong.
As for 10 or 20 billion dollar valuation for Airbnb? Reality says "Ridiculous!".
Sure, some regulations seem designed primarily to protect existing interests, but more often, there are very good reasons for the regulation.
For instance, I believe hotels must maintain a record of visitors car license plates. And they are often inspected by health departments.
I'm all for innovation, but I don't think we can throw out an entire regulatory framework that took decades to develop. There is just too much that can go wrong.
As for 10 or 20 billion dollar valuation for Airbnb? Reality says "Ridiculous!".
A 10+ figure valuation for something that extracts 80% of the value of a hotel chain while sustaining 1% of its costs and at the same time handsomely remunerating the vendors that provide its inventory does not sound at all crazy to me.
Not sure how it extracts 80% of the value of a hotel chain — from what I've seen, estimates place the average AirBNB night at ~$80, which would mean AirBnB gets ~$10/stay.
I don't think I've ever seen a hotel night, outside of a hostel, for $12.
(And I'm not trying to say it is a bad business at all — non-customer-acqusition costs probably go down by a larger % than revenue.)
I don't think I've ever seen a hotel night, outside of a hostel, for $12.
(And I'm not trying to say it is a bad business at all — non-customer-acqusition costs probably go down by a larger % than revenue.)
They get $10/stay and the cost to AirBnB is fixed at whatever it costs to run the computer systems.
Effectively, their profit is $10 per stay and their expenses border on $0.
The valuation is a bet on a YouTube exit. Most of YouTube was massive copyright violations (still is) and was a massive bandwidth cost sink (suspect it still is), but since Google bought them out that doesn't matter anymore. In fact, YouTube is a gigantic brake on innovation in the video side of the web precisely because they choke off any useful profitable business models.
Similarly, if AirBnB can get somebody big to buy them out before the lawsuits overrun them, cha-ching, go the owners and initial investors.
Effectively, their profit is $10 per stay and their expenses border on $0.
The valuation is a bet on a YouTube exit. Most of YouTube was massive copyright violations (still is) and was a massive bandwidth cost sink (suspect it still is), but since Google bought them out that doesn't matter anymore. In fact, YouTube is a gigantic brake on innovation in the video side of the web precisely because they choke off any useful profitable business models.
Similarly, if AirBnB can get somebody big to buy them out before the lawsuits overrun them, cha-ching, go the owners and initial investors.
Totally agree, but the parent said that AirBNB gets 80% of the value (revenue) of a hotel chain. That's just false — the host gets ~85% of the value, not AirBnB.
My assumption is that the valuation is "crazy" because vendors in some of the most desired markets are violating the law to provide their service.
"get while the gettin's good" sort of thing.
"get while the gettin's good" sort of thing.
If that was true, car stereo theft rings would also have billion dollar valuations.
I don't believe that's a fair comparison, but you're entitled to your opinion.
I believe Airbnb definitely has a headstart in the placesharing space, and preventing rentals in SFBA, NY, etc wouldn't cause a significant dent in their valuation (two cents).
Their model works so long as the local jurisdiction supports it.
I believe Airbnb definitely has a headstart in the placesharing space, and preventing rentals in SFBA, NY, etc wouldn't cause a significant dent in their valuation (two cents).
Their model works so long as the local jurisdiction supports it.
It's possible we're talking past each other. I think Abnb should take responsibility for making sure it operates lawfully in SF and NYC (and elsewhere where it is encumbered by regs), but I think the model is a good one.
I believe that's the case, and that we're in agreeement. I owe you a coffee.
as long as the local authorities support it... and as long as "Dateline" doesn't run a special on the AirBNB killer...
Sure, they have a head start, but the various problems haven't been fleshed out nor resolved. And, there is going to be a very active resistance from many sectors (for good reason).
I might be wrong, and not to rain on parades and such, but I just don't see that valuation level reflecting reality at all.
Sure, they have a head start, but the various problems haven't been fleshed out nor resolved. And, there is going to be a very active resistance from many sectors (for good reason).
I might be wrong, and not to rain on parades and such, but I just don't see that valuation level reflecting reality at all.
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Boy I would sure hate to see what crazy sounds like to you then:)
Something where you can't draw a straight line between execution and billions of dollars in profits?
A new form of money that nobody controls, which has its ledger stored in a public decentralized database, with cryptographically-secured transactions, with a limited total number of units, whose unit value is decided by the market, and where new units of the currency are introduced over time in a decreasing schedule by paying them to the enforcers of the security of the network, who are all voluntary.
There is no way this crazy idea could ever actually work...
There is no way this crazy idea could ever actually work...
Is it an idea that is not easily executable by someone else?
Does it have a high technical/expense barrier to entry?
I'm sorry, the valuation at those levels just seems way way out of proportion. Never mind the underlying legal problems.
Does it have a high technical/expense barrier to entry?
I'm sorry, the valuation at those levels just seems way way out of proportion. Never mind the underlying legal problems.
I'd guess that the number of people receiving eviction letters "out of the blue" is pretty small. I recently had a couple run-ins with my management company and the last thing they want to do is evict me. They just want me to stop the offending behavior.
I think the important thing is the agreement between tenant and landlord (or condo association, etc). From my perspective, if those agreements are specific about no subletting then I don't see how it even matters if there is a city-wide ban? There isn't a city-wide ban of smoking in residential buildings in Atlanta but I am not allowed to smoke in mine. That seems to be analogous.
I believe the fault lies with both AirBnB and the renter. I see people mostly harping on AirBnB and it does seem they could do more to make the renter think about the legality of the situation or check a box stating that they have the legal right to do so. But as a long time renter, I've always been well aware that in every rental agreement I've signed, it is a violation to sublet at least with out consent from my landlord.
The idea that there is some connection between morality and abiding by all laws is silly. There are so many ridiculous laws on the books, it is laughable. Over here in Atlanta, it is illegal to engage in oral sex. I don't believe I'm am a bad person for breaking that law as often as humanly possible. Again, I think that violating a piece of state or city legislation of which I had nothing to do with enacting is far different from me violating an agreement which I myself signed.
I think the important thing is the agreement between tenant and landlord (or condo association, etc). From my perspective, if those agreements are specific about no subletting then I don't see how it even matters if there is a city-wide ban? There isn't a city-wide ban of smoking in residential buildings in Atlanta but I am not allowed to smoke in mine. That seems to be analogous.
I believe the fault lies with both AirBnB and the renter. I see people mostly harping on AirBnB and it does seem they could do more to make the renter think about the legality of the situation or check a box stating that they have the legal right to do so. But as a long time renter, I've always been well aware that in every rental agreement I've signed, it is a violation to sublet at least with out consent from my landlord.
The idea that there is some connection between morality and abiding by all laws is silly. There are so many ridiculous laws on the books, it is laughable. Over here in Atlanta, it is illegal to engage in oral sex. I don't believe I'm am a bad person for breaking that law as often as humanly possible. Again, I think that violating a piece of state or city legislation of which I had nothing to do with enacting is far different from me violating an agreement which I myself signed.
I imagine renters are more likely to get eviction letters out of the blue if they are living in a rent controlled property and their landlord is thus incentivized to evict and raise the rent.
the article made it sound like the city/planning department was serving the eviction notice...not the landlord. Not sure how that would work though.
Ah, the never ending chain of well meaning laws that require more questionable laws, backed up by objectionable laws, with the gaps filled by laws only Stalin would be proud of.
People visit from out of town and use town resources, so we need to tax them without taxing the locals...let's create a hotel tax. The locals don't pay it, so no one cares.
How do we track the hotels to make sure we get our tax money? We'll need a licensing process. Again no one cares.
Hotels form a lobby and say, hey, we're paying these taxes and getting these licenses, maybe you should create a few laws to protect us and limit the licenses so we stay in business. Some people care.
Finally, a neighbor sees my house and my frequent guests (because I have a lot of friends that visit) and reports me to the Gestapo and says I might be renting my place out on AirBnb. Without any due process I get fined for violating a law meant to protect an industry that pays taxes to pay for the visitors that use city services that I actually live in and pay taxes. Now I really care, but it's too late.
Violating your lease is wrong, but so is violating due process. I also believe I have the right as a property owner to rent out my property as long as its purpose doesn't change.
People visit from out of town and use town resources, so we need to tax them without taxing the locals...let's create a hotel tax. The locals don't pay it, so no one cares.
How do we track the hotels to make sure we get our tax money? We'll need a licensing process. Again no one cares.
Hotels form a lobby and say, hey, we're paying these taxes and getting these licenses, maybe you should create a few laws to protect us and limit the licenses so we stay in business. Some people care.
Finally, a neighbor sees my house and my frequent guests (because I have a lot of friends that visit) and reports me to the Gestapo and says I might be renting my place out on AirBnb. Without any due process I get fined for violating a law meant to protect an industry that pays taxes to pay for the visitors that use city services that I actually live in and pay taxes. Now I really care, but it's too late.
Violating your lease is wrong, but so is violating due process. I also believe I have the right as a property owner to rent out my property as long as its purpose doesn't change.
I have a fairly libertarian view of local regulations, and, unlike many commentators on the issue, have little sympathy for NIMBY attitudes from neighbours. In my opinion, if someone rents out a rented apartment, that should be subordinated to the subletting clause in their lease, but if someone owns an apartment, they should be able to rent it out to whomever they please, at whatever frequency, and charge whatever price they like to do so. They are, of course, obligated to take responsibility for any disruptions, nuisances, damage, etc. caused by the guests, as per normal building regulations, but I don't think the possibility of renting itself should be impaired by any local regulations. The Airbnb model is simply disruptive, and hotels don't like that. That's how I see it.
I am especially unsympathetic to the argument that the neighbours have a "right" not to live "next to a hotel". There's nothing inherently hostile about a hotel as an application of an apartment, versus any other less controversial applications of an apartment that result in occasional comings and goings of strangers, such as parties and social gatherings. If the hotel causes them specific problems, they have a right to redress those specific grievances. That's about it.
My view of this is strongly connected to the idea that property rights to real estate should incorporate the freedom to use the property as you'd like, as long as it doesn't harm anyone. I don't find much plausibility in the idea that renting it out in and of itself harms anyone. Many things that Airbnb renters can do can cause annoyance or harm. So can a drunk friend getting rowdy at my dinner party. So what? I can't have guests? Oh, I can? What about guests that stay a few days? Yeah? Why not paying guests then?
I am especially unsympathetic to the argument that the neighbours have a "right" not to live "next to a hotel". There's nothing inherently hostile about a hotel as an application of an apartment, versus any other less controversial applications of an apartment that result in occasional comings and goings of strangers, such as parties and social gatherings. If the hotel causes them specific problems, they have a right to redress those specific grievances. That's about it.
My view of this is strongly connected to the idea that property rights to real estate should incorporate the freedom to use the property as you'd like, as long as it doesn't harm anyone. I don't find much plausibility in the idea that renting it out in and of itself harms anyone. Many things that Airbnb renters can do can cause annoyance or harm. So can a drunk friend getting rowdy at my dinner party. So what? I can't have guests? Oh, I can? What about guests that stay a few days? Yeah? Why not paying guests then?
I've seen a few versions of this comment. You are stating your interest in converting a single family house into a hotel, and then stating that you see no reason why you shouldn't be allowed to do this.
I disagree. While I understand that renting out bedrooms on airbnb is a far more profitable use of a single family house than providing a place for your kids to sleep, I purchased a house in an area zoned for single family use. When I purchased, I traded my right to turn my house into a hotel in exchange for a legally enforced expectation that the neighbors I share a wall with won't do this either.
I disagree. While I understand that renting out bedrooms on airbnb is a far more profitable use of a single family house than providing a place for your kids to sleep, I purchased a house in an area zoned for single family use. When I purchased, I traded my right to turn my house into a hotel in exchange for a legally enforced expectation that the neighbors I share a wall with won't do this either.
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I'd be interested to find out where this push of evictions is coming from. They mentioned a surge of complaints from neighbors of renters, but I think it's more likely to be the hotel industry pushing back, or perhaps the city making a point about evading hotel taxes.
It's a recurrent theme to see somewhat illegal startups becoming massive and then adjusting for the laws. I.e. youtube, airbnb, rapgenius.
That's one kind of unfair advantage that startups have over bigger organisations where they can spread and grow quickly even if a bit illegal (or on the grey line).
I'm just speculating here but I'm wondering if it couldn't be a good indicator of success for upcoming startups.. I.e. something a tiny big illegal gaining some adoptions. But then, it's fair to ask, how far are founders willing to go in the "illegal" side for the success of their startup?
That's one kind of unfair advantage that startups have over bigger organisations where they can spread and grow quickly even if a bit illegal (or on the grey line).
I'm just speculating here but I'm wondering if it couldn't be a good indicator of success for upcoming startups.. I.e. something a tiny big illegal gaining some adoptions. But then, it's fair to ask, how far are founders willing to go in the "illegal" side for the success of their startup?
One problem in Boulder is that various entities (people, speculators, etc.) can be more aggressive about investing in affordable property, especially condos and smaller houses. Which they then operate as distributed, high-margin hotels. I don't think this is what Airbnb had in mind anyway, and it's obviously going to cause friction as the range in property costs collapses up into the high end (which is holding relatively constant).
Boulder is a tough market by design, but anything with this sort of impact is going to be closely scrutinized and evaluated for long term effects on the community.
Boulder is a tough market by design, but anything with this sort of impact is going to be closely scrutinized and evaluated for long term effects on the community.
On a related note, the city of Amsterdam recently distributed a clear and friendly leaflet regarding the do's and don'ts of private short-term rentals: http://www.iamsterdam.com/holiday%20rental%20guidelines
Clearly it's a prelude to a crack down, but the rules are clear, reasonable and communicated well up front.
Clearly it's a prelude to a crack down, but the rules are clear, reasonable and communicated well up front.
Our condo association is updating the bi-laws for forbid short-term subletting. I'm sure other owner-occupied places will eventually, too, especially in many high-priced urban neighborhoods. Who wants to live in an expensive home they purchased to only have neighbors renting it out for short-term rentals?
I guess I'm surprised to learn that any such subletting is illegal in SF.
Even prior to AirBnB it was really common to see offers on Craigslist or simply through traditional networks of friends and acquaintances, "Sublet my apartment while I'm traveling for six weeks," or "SFO-NYC apartment swap."
Even prior to AirBnB it was really common to see offers on Craigslist or simply through traditional networks of friends and acquaintances, "Sublet my apartment while I'm traveling for six weeks," or "SFO-NYC apartment swap."
It's the difference between technically illegal (or against terms of lease/contract/etc.) activities taking place relatively informally and at small-scale and being institutionalized.
It's just like no one was going to come after you in the eighties because you made a mixtape but Napster was another story.
It's just like no one was going to come after you in the eighties because you made a mixtape but Napster was another story.
Such subletting (which on a nightly basis isn't subletting at all) is illegal almost everywhere. There is a reason why hotels pay hotel taxes and it's not just because they're not a cool startup.
It's much more widespread now with Airbnb than with Craigslist. Craigslist is more promiscuous and serendipitous whereas Airbnb is more corporate and explicit. If a whole company that is valued at $10b has a business model for this, one would assume that such a service is completely legal. That's the heart of the issue here. It's gotten to the size now where media, landlords, and government have to step in before it becomes a black market of sorts.
I wonder what the rights of a short term renter is in SF. Lets say 30 days or some other small fixed time that is legal. Can you practically stop paying rent and live there for the years it takes to get you evicted? Would they have to pay you the $~40k relocation payments to get you out eventually?
> I wonder what the rights of a short term renter is in SF. Lets say 30 days or some other small fixed time that is legal.
Except for properly licensed hotels, short-term rentals are illegal in SF.
Except for properly licensed hotels, short-term rentals are illegal in SF.
The article says over 30 day rentals are legal. It's under 30 day rentals without a permit that are illegal. But I'm wondering if there is a difference in treatment vs a person who has been there for a year or more.
I am also interested in this. It could end up being a nightmare scenario. Someoen signs up for a month, says "You know what, I like it here. I'm not leaving."
Even if they kept paying rent, they might be an unpleasant person. If they also stop paying rent it could be even worse.
Even if they kept paying rent, they might be an unpleasant person. If they also stop paying rent it could be even worse.
"Airbnb's website tells people to check local laws and their leases. A specific section on San Francisco explains the prohibition on short-term rentals and links to various city codes."
So why doesn't AirBnB simply disallow listings from SF? Worried that will impact their valuation?
So why doesn't AirBnB simply disallow listings from SF? Worried that will impact their valuation?
How about SF focus on the shanigans of corrupt poiticians, like Leland Ye and others, and STFU about an actual great service like AirBnB.
If they want to regulate it, make AirBnB carry massive insurance - divide that cost of insurance across the thousands-of-user-hours per nightly rental.
If they want to regulate it, make AirBnB carry massive insurance - divide that cost of insurance across the thousands-of-user-hours per nightly rental.
Subletting rental property means you are abusing your landlord's assets, almost certainly violates the terms of your lease and probably violates their insurance policies. Eviction is an appropriate and proportionate response.
The City of San Francisco is using this law to threaten people who do this with the explicit permission of their landlords. Or who own their own place.
Is there any risk of legal action from being an airbnb guest in SF?
Probably not since you aren't the one profiting, but if you know that it's illegal for the host, you probably shouldn't do it just to avoid being a jerk.
This is rich coming from a city with more dingy rent-by-hour flophouses than any other I've ever seen
San Franciscan crony capitalism at it's finest.
In Seattle, there was a HUGE stink after the City Council passed a law regulating services like Uber & Lyft. Given that we (Seattle) are always compared to the Bay Area in terms of innovation (and the stifling thereof), it's nice to see that at least our two city governments are aligned in their ineptitude.
"Regulating" in the same way that choking someone is "regulating" their air. Still, even though I really liked UberX's service, they deliberately set out to ignore the law and then cried foul when the city started putting some teeth to it.
I read to about here:
"Using an apartment for short-term rentals is a crime in San Francisco," said Edward Singer, an attorney with Zacks & Freedman who filed the notice against Katz.
Considering private attorneys don't prosecute crimes, this sounds like a landlord that wanted to raise the rent and found a good excuse to evict the current tenant.
"Using an apartment for short-term rentals is a crime in San Francisco," said Edward Singer, an attorney with Zacks & Freedman who filed the notice against Katz.
Considering private attorneys don't prosecute crimes, this sounds like a landlord that wanted to raise the rent and found a good excuse to evict the current tenant.
> "They thought it was OK to rent out on Airbnb because the company didn't tell them otherwise. Airbnb should be defending these tenants, or they should disclose to every person who rents in San Francisco that (short-term rentals are illegal) and tenants are being evicted."
This is interesting. If it is indeed illegal for any renter to use air bnb in San Francisco, then it seems logical to me that AirBnb should at the very least make the person renting out a place check a box that very clearly says
1) they own their own place
2) they have checked with their building, if its a condo or shared building, to ensure that its legal for them to rent out their place.