Thousands of San Francisco hosts on Airbnb and rival home-stay sites have stopped renting their homes and rooms to tourists. Many others are scrambling to register their vacation rentals with the city as a Tuesday deadline looms for Airbnb and HomeAway to kick off unregistered hosts.
“If you look at the sites, you’ll notice a substantial reduction in the number of listings,” said Kevin Guy, director of the San Francisco Office of Short-Term Rental Administration and Enforcement.
The rush to register is the result of an agreement between the city and the sites, which had fought San Francisco’s efforts to strengthen registration requirements and rental limitations imposed in 2015. After a court battle, San Francisco, Airbnb and HomeAway reached a settlement in May that required the sites to register all hosts in phases starting in September.
By Tuesday, all hosts must be registered. Airbnb and HomeAway won’t allow unregistered hosts on their sites, and other services, like FlipKey, which weren’t a party to the settlement, will face fines of up to $1,000 a day per listing and criminal penalties if they help arrange bookings of unregistered listings.
The city said 2,168 hosts had met its requirements to offer temporary rentals as of Thursday — representing a fraction of the 8,453 Airbnb listings the city observed in early August. (That count excludes more than 2,500 listings exempt from the rules.) An additional 737 have submitted applications and can host while those are pending. About 15 percent of them have more than one listing, such as two rooms in their home.
The number is in flux: Some pending applications may be rejected, while about two dozen applications a day are still arriving. Hosts can still apply after Tuesday, but any bookings will be canceled until they are registered.
Airbnb, which got its start in San Francisco just under a decade ago and is still headquartered here, is by far the city’s biggest vacation-rental site. It says that most hosts are residents who rent out spare rooms, or their entire home when they are away, making them compliant with city laws.
In addition, the company has about 2,650 listings in San Francisco that are exempt from the registration requirement, including rentals of 30 or more days, bed and breakfasts, and hotels.
“Over the last few months, we’ve focused on educating our host community about the registration process, and will continue our outreach efforts in the final days to ensure hosts have all the information they need to register,” said spokeswoman Mattie Zazueta.
Airbnb has removed more than 2,600 listings since September. It doesn’t yet know how many more it must ax Tuesday. Many listings had little activity, so their removal won’t hurt its local business, she said.
Airbnb said it booked the same number of nights in San Francisco in the 30 days after Dec. 5 as during the same period a year earlier. Worldwide, its business soared during the same time frame. It booked 3 million guests globally for New Year’s Eve — up 50 percent from the last night of 2016.
HomeAway and VRBO, both owned by Expedia, and FlipKey, owned by TripAdvisor, showcase many second homes, which San Francisco does not allow to be offered as vacation rentals.
“FlipKey looks like a massacre happened, there are so few listings now,” said Omar Masry, senior analyst at the Office of Short-Term Rentals. “On VRBO, you can see that the map of San Francisco is no longer covered in pins (of available properties). A shakeout is happening.”
FlipKey has removed 498 San Francisco listings and has only 57 remaining, excluding those exempt from the registration requirement such as hotels, timeshares and B&Bs, the city said.
TripAdvisor spokeswoman Laurel Greatrix said FlipKey worked closely with the city to comply with the regulations, and noted that it offers a variety of accommodations in San Francisco, such as hotels, hostels and B&Bs.
Data for HomeAway and VRBO were not immediately available. In May 2016, they had about 1,300 local listings, a Chronicle investigation found.
“HomeAway remains committed to working through the law’s implementation plan with the city and hope to continue our partnership on reasonable public policy and enforcement in the new year.” said spokesman Philip Minardi.
Airbnb and HomeAway sued San Francisco in 2016 over a strict new law passed in June of that year. A U.S. district judge rejected the companies’ arguments that their rights were being violated and ordered them to work with San Francisco on a registration system. Such registrations were part of the “Airbnb law” enacted in early 2015, but the requirement was widely ignored. Only about 1,800 hosts registered.
San Francisco wants hosts to register to ensure compliance with such requirements as hosts being permanent residents who do not rent entire homes for more than 90 days a year. The law seeks to prevent landlords from removing housing stock by turning homes into full-time hotels.
Listings dropped off for several reasons:
Dormant properties: About 2,000 people listed their homes but never rented to tourists. Many were lured by the hope of quick riches from Super Bowl 50 and America’s Cup guests who didn’t materialize.
Tenants and condo owners who can’t sublet: When renters register as hosts, the city notifies their building owner. “We think a good number of folks might meet city eligibility requirements, but may be renters with ‘no subletting clauses’ in their leases,” Guy said. Similarly, some condo associations bar subletting.
Ineligible properties: San Francisco permanently bars some properties from vacation rentals, including below-market-rate units and public housing, buildings subject to Ellis Act evictions after Nov. 1, 2014, and a kind of in-law residence called an accessory dwelling unit. Funkier places, such as recreational vehicles, tree houses, tents, shipping containers and boats, are also verboten for tourists here. Properties with building-code violations can’t register until they clear those up.
Ineligible hosts: Only people who live in their homes at least nine months a year can rent to tourists. That excludes those who have a pied-à-terre in San Francisco, or who travel more than three months a year. Some hosts who listed more than one property or who had guests stay almost year-round were rejected by the city because they appeared to be operating illegal hotels.
Infrequent hosts: San Francisco charges a $250 registration fee plus a $90 business registration fee for all hosts. For those who only rent a week or two while they are on vacation, this could be a deterrent.
Procrastinators: “It’s human nature that people wait until the last minute,” said Airbnb’s Zazueta. Chicago, which went through a similar registration process several months ago, saw a surge of last-minute registrations. Likewise, San Francisco says applications have been increasing in the past week.
Some hosts complain that the city is draconian with rejections, and said the number of pending applications means it takes longer to get a decision.
“I was rejected because someone filed a completely bogus complaint saying I have three units that are all Airbnbs,” said a host who asked not to be named. “What evidence do they have? It’s not true.” He plans to appeal the decision.
In fact, rejections are rising. From February 2015 to August 2017, 26 percent of applications were rejected. Since September, 38 percent have been rejected, from a smaller pool of 293 applications.
“We’ve always closely scrutinized applications,” Guy said. “Now that people are really required to register, there may be incentives for some to submit applications that may be fraudulent, so it would be natural to see an increase in the rejection rate.”
Applicants have 30 days to appeal a rejection and will receive a decision within another 30 days.
There is a loophole for hosts who don’t want to register: renting for a month or longer.
“A lot of people are switching to 30-plus-day listings, but it’s harder for them to get renters,” Benkert said.
Vacation rentals in San Francisco
2,168 hosts are registered with the city.
737 hosts have applications pending.
8,453 Airbnb listings in San Francisco in early August, prior to the strengthening of registration requirements.
That does not include 2,650 Airbnb listings in San Francisco that are exempt: 30-day-plus rentals, bed and breakfasts, and hotels.
2,680 hosts were removed by Airbnb between September and December.
That left 5,900 nonexempt Airbnb listings as of early December; all remaining unregistered listings will be removed on Tuesday.