City of San Francisco Initiative to Restrict Short-Term Rentals, Proposition F (November 2015)

	Total campaign cash ; as of July 2016 (Final)
Support:	$1,132,007
Opposition:	$9,013,690

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An initiative to restrict short-term rentals, Proposition F, was on the ballot for voters in San Francisco, California, on November 3, 2015. It was defeated.

Proposition F was sometimes referred to as the Airbnb Initiative.

This measure, which proved the most contentious measure on the San Francisco ballot, would have imposed restrictions on private, short-term housing rentals. It would have restricted all such private rentals to 75 nights per year and imposed provisions designed to ensure such private rentals were paying hotel taxes and following city code. It would also have required guest and revenue reports from rental hosts and "hosting platforms" every three months. Moreover, Proposition F was designed to prohibit the use of "in-law" units for short-term rentals and enact regulations concerning privacy, peace and quiet. Proposition F would have allowed enforcement of its provisions by the city, as well as authorizing private action lawsuits by "interested parties"—defined as anyone living within 100 feet—against those suspected of violating the law.^[1]

The initiative was motivated by and targeted websites such as Airbnb and Homeaway, which feature rental listings nation- and world-wide. It was proposed by a coalition of land owners, housing advocates, neighborhood groups and unions—especially those representing hotels—called Share Better SF. In the interest of easy enforcement, the initiative would have focused on penalties for websites that posted rental listings that did not comply with city law, as well as punishing individual home owners or sub-leasers. The fines proposed for websites featuring illegal posts would have ranged from $250 to $1,000 per day for each non-compliant post. Estimates showed the fines for a website such as Airbnb could have added up to millions of dollars unless a way was found to keep listings in accordance with the proposed city law. The campaign opposing Proposition F had received $8,377,784 in campaign contributions as of October 17, 2015. Out of the total contributions received by the opposing campaign, over 95 percent was donated by Airbnb. The support campaign had collected $778,488 as of October 17, 2015.^[1]^[2]^[3]^[4]

Two related ordinances were introduced to the city's board of supervisors. The most restrictive ordinance was designed to be more stringent than this initiative, limiting short-term rentals to 60 days per year for any given unit. The more lenient of the bills was designed to allow up to 120 days per year. Proponents of the citizen initiative said they would be satisfied by the more strict set of regulations, but would continue with this initiative petition effort if the city supervisors did nothing or chose to enact the less restrictive ordinance. The board of supervisors proved divided over the proposals in a meeting on June 9, 2015. They postponed a decision until a later meeting. On July 14, 2015, the board of supervisors approved an amended version of the more lenient of the two ordinances, which was opposed by Share Better SF. The ordinance continued to allow unlimited hosted short-term rentals and the use of in-law units for short-term rentals.^[5]^[6]

Housing was one of the most important issues in the city's 2015 election. Gabriel Metcalf, president and CEO of public policy research company SPUR, said, “It’s the No. 1 issue in every poll.” Five propositions on the ballot dealt with housing and development, either directly or indirectly, and proposed solutions for the housing availability issues facing the city were essential to candidate platforms. Voters decided housing-related propositions that addressed affordable housing bonds, restrictions on short-term rentals, a moratorium on market-rate construction in the city's Mission District, housing developments on surplus public lands and a specific development proposal on the waterfront.^[7]

Election results

San Francisco, Proposition F
Result	Votes	Percentage
d No	111,348	55.59%
Yes	88,945	44.41%

Election results from San Francisco Elections Office

Responses

Chris Lehane, Airbnb’s head of global public policy, said, “This election was a victory. This effort shows that home sharing is both a community and a movement.”^[8]

Dale Carlson, co-founder of the coalition behind Proposition F, said, “Losing is always a disappointment. But our coalition is proud of what was accomplished,” pointing out that the pro-Prop F campaign was outspent by a large margin.^[8]

Davey Alba, writing for Wired, wrote that, while an important symbolic victory, the approval of Proposition F did not signify the end of the political battle. He reminded his readers that the board of supervisors could pass additional restrictions on short-term rentals at any time and predicted:

“	So, yes, while the election is a symbolic moment of victory for Airbnb and its supporters in its hometown, the tensions gripping San Francisco—a city that has come to epitomize the tech industry and the rapid changes it engenders—aren’t about to disappear.^[9]	”
—Davey Alba^[8]

Provisions and changes

Maximum days of rental

This initiative would have limited both hosted and unhosted short-term rentals to a maximum of 75 days per year. A hosted rental is a unit that is rented out while a permanent resident also resides at the unit during the rental period. An unhosted rental is the rental of a unit at which no permanent residents reside during the rental period. Without the approval of Proposition F, city law continued to allow 90 days of unhosted short-term rentals for any given unit and unlimited hosted short-term rentals.^[10]

Interested parties with legal standing

This initiative would have established anyone who lives within 100 feet of a unit used for short-term rentals as an "interested party" with legal standing to sue violators of the initiative. Since Proposition F was defeated, city law continued to dictate that an "interested party" is any person who lives in the same building as the short-term unit in question. Proposition F was also have given legal standing to any housing-related nonprofit.^[10]

Online hosting platforms

This initiative would have made it illegal for any hosting website, such as Airbnb, to list a short-term rental unit if the unit was not eligible for rent according to city law. Thus, Airbnb would have been required to remove the listing for any unit that had been rented out for more than 75 days in any given year. Moreover, this initiative would have allowed any "interested party" to sue the hosting platform or his or her neighbor for any listing in violation of the law. Without the approval of Proposition F, city law continued to not require hosting platforms to remove listings in accordance to city law and remained silent about the legal standing of interested parties to sue online hosting platforms.^[10]

In-law units

The city's laws, as of the beginning of 2015, allowed in-law units to be rented as unhosted short-term rentals, subject to the 90 day annual cap. Proposition F was designed to prohibit the use of in-law units for short-term rentals entirely. Since Proposition F was rejected, the city continued to allow in-law unit rentals.^[10]

Text of measure

Ballot question

The following question for this measure appeared on the ballot:^[10]

“

Shall the City limit short-term rentals of a housing unit to 75 days per year regardless of whether the rental is hosted or unhosted; require owners to provide proof that they authorize the unit as a short-term rental; require residents who offer short-term rentals to submit quarterly reports on the number of days they live in the unit and the number of days the unit is rented; prohibit short-term rentals of in-law units; allow interested parties to sue hosting platforms; and make it a misdemeanor for a hosting platform to unlawfully list a unit as a short-term rental?^[9]

”

Ballot summary

The following summary of this initiative appeared on the ballot:^[11]

“

San Francisco limits short-term rentals of residential units. A rental is “short-term” if the term is less than 30 days. The purpose of these limits is to prohibit converting rental units from residential use to tourist use, and help preserve the availability of housing in San Francisco. These limits, set forth in San Francisco’s short-term residential rental law, include requirements in effect as of May 21, 2015 that:

Only “permanent residents” may offer a residential unit for short-term rent. A “permanent resident” is someone who has occupied the unit for at least 60 consecutive days. Before offering a unit for short-term rental, permanent residents must register the unit with the City’s Planning Department.
A permanent resident may not rent a residential unit on a short-term basis for more than 90 days per year if the resident does not live there during the rental period (“unhosted rentals”). There is no limit on the number of days per year for short-term rentals if the resident lives in the unit during the rental period (“hosted rentals”).
“Hosting platforms,” which are individuals or businesses that provide a means for a person to advertise their residential unit for short-term rental, must notify users of the City’s regulations on short-term rentals.

The City’s law allows “interested parties” to sue violators. “Interested parties” include residents of the building where the residential unit is located, the owner of the unit, and any housing nonprofit organization. But interested parties cannot sue hosting platforms for violating the City’s law. The City may sue any violator.

Under the City’s law, it is a misdemeanor for an owner or tenant to unlawfully rent a unit as a short-term rental.

The San Francisco Board of Supervisors is considering various amendments to the City’s law to change these requirements and enforcement provisions.

This measure would limit allowed short-term rentals of a unit to 75 days per year, regardless of whether the rental is hosted or unhosted. Hosting platforms would have to stop listing a unit for short-term rental once that unit has been rented on a short-term basis for more than 75 days in a calendar year.

This measure would require that Planning Department applications for inclusion in the shortterm rental registry contain proof that the unit’s owner authorizes using the unit as a short-term rental. After including a unit on the registry, the Planning Department would be required to post a notice on the site of the unit stating that it has been approved for use as a short-term rental.

The Department would also be required to mail that notice to the owners and neighbors of the unit.

This measure would prohibit short-term rental of in-law units.

This measure would expand the definition of “interested parties” who can sue to enforce the City’s law to include people living within 100 feet of the unit. It would also allow interested parties to sue hosting platforms for violations.

This measure would make it a misdemeanor for a housing platform to unlawfully list a unit as a short-term rental.^[9]

”

Full text

The full text of the proposed initiative is available here.

Share Better SF campaign logo

Support

Supporters

The coalition behind this measure was called Share Better SF. The Share Better SF campaign was largely funded by Unite Here, a union representing mainly hotel and service industry workers.^[12]

Supervisor David Campos introduced an ordinance that would have been even more restrictive than this initiative. Share Better SF announced that, unless Campos' bill was approved, it would move forward with the initiative petition effort. Ultimately, a weaker ordinance restricting short-term rentals to 90 days per year was approved by the city council.^[5]

The Share Better SF website listed the following endorsements of a "yes" vote on Proposition F:^[13]

Individuals:

U.S. Senator Dianne Feinstein (D)
Former Mayor Art Agnos
State Senator Mark Leno (D-11)
Former Assemblyman Tom Ammiano
Judge Quentin Kopp (Retired)
Supervisor John Avalos
Supervisor David Campos
Supervisor Jane Kim
Supervisor Eric Mar
Supervisor Norman Yee
Board of Education member Sandra Fewer
Community College Board Trustee Rafael Mandelman
Community College Board Trustee John Rizzo
Kathrin Moore, Planning Commissioner
Dennis Richards, Planning Commissioner
Cindy Wu, Planning Commissioner
Former City Attorney Louise Renne
Former Supervisor Aaron Peskin
Former Supervisor Matt Gonzalez
Former Supervisor Jake McGoldrick
Former Planning Commissioner Dennis Antenore
Former Planning Commissioner Doug Engmann
Former Planning Commissioner Esther Marks
Former Planning Commissioner Bill Sugaya
Former Planning Commissioner Wayne Hu
Democratic County Central Committee member Meghan Levitan

Labor organizations and unions:

The American Federation of Teachers 2121
Jobs with Justice SF
San Francisco Building and Trades Council
San Francisco Labor Council^[14]
SEIU 1021
UNITE HERE, Local 2^[2]
United Educators of San Francisco

Organizations:

Affordable Housing Alliance
AIDS Housing Alliance
Anti-Eviction Mapping Project
Bernal Heights Democratic Club
Causa Justa Just Cause
Chinatown Community Development Center
Chinatown Tenants Association
Coalition for San Francisco Neighborhoods
Coleman Action Fund for Children
Council of Community Housing Organizations
District 3 Democratic Club
D5 Action
District 8 Democratic Club
District 11 Democratic Club

Eviction Free SF
FDR Democratic Club
Gray Panthers
Haight Ashbury Neighborhood Council
Harvey Milk LGBT Democratic Club
Hayes Valley Neighborhood Association’s
Transportation and Planning Committee
Housing Rights Committee of San Francisco
Keep Neighborhoods First
Latino Democratic Club
New Avenues Democratic Club
Potrero Boosters
Potrero Hill Democratic Club
Richmond District Democratic Club

San Francisco Anti-Displacement Coalition
San Francisco Apartment Association
San Francisco Human Services Network
San Francisco Information Clearinghouse
San Francisco Rising
San Francisco Taxpayers Association
San Francisco Tenants Union
San Francisco Tomorrow
San Francisco Women’s Political Committee
Senior & Disability Action
Sierra Club
South Beach District 6 Democratic Club
West of Twin Peaks Central Council
Yerba Buena Consortium

Arguments in favor

Supporters of the initiative argued that the city needed enforceable restrictions on the industry. They also argued that the unregistered, short-term rentals operating in the city resulted in illegal competition with the hotel and vacation rental industry by avoiding taxes and important city codes. Moreover, Share Better SF said, "San Francisco is facing its worst housing crisis in more than a century, with skyrocketing rents and home prices." The group claimed this initiative would help alleviate the city's housing problems by putting condos, apartments and houses back in the long-term rental market, instead of being reserved by owners for visitors and tourists in order to make a bigger profit.^[2]^[12]

Initiative proponents also claimed the status of the private, short-term rental industry allowed unfair and damaging practices such as renters sub-leasing without the approval of owners, leading to damaged buildings without reparation or accountability and uninsured houses.^[2]

Dale Carlson, a public relations professional working with the Share Better SF campaign, stated, “The wholesale conversion of residential units to short-term tourist accommodations takes a significant chunk out of available and affordable housing. ... We need laws and regulations governing short-term rentals to tourists that are enforceable. That means the hosting platforms have to have some skin in the game.” ^[1]^[2]

Malcolm Yeung, the deputy director of the Chinatown Community Development Center, blamed Airbnb and short-term rentals for the eviction and displacement of Chinatown residents. He recounted an instance that occurred in 2014 in which residents of Chinatown came to the center and complained about their landlord pressuring them to leave. Finally, after bending to the pressure and accepting a buyout, the tenants left, after which the units were posted on Airbnb for a much higher price.^[15]

Private action lawsuits

Responding to critics that said Proposition F would spur many lawsuits between neighbors, many of which would be frivolous or motivated by personal gain, Carlson said, “We firmly believe that if we give the city the tools it says it needs, that enforcement actions will pick up; the city will start doing its job and the private right of action will not be needed." He went on to defend provisions in Proposition F allowing for private lawsuits, saying, "If the city sits on your complaint and does nothing, you should have the ability to protect your right to privacy and quiet enjoyment of your home. If a neighbor has to go to all the trouble of doing all the work the city should otherwise be doing, why shouldn’t they be entitled to the same compensation as the city?”^[16]

Joe Tobener, an attorney with experience in tenant rights and in cases surrounding short-term rental complaints, said, “Lawyers won’t bring claims that are invalid. The only people who will be pursued are bad actors who are violating the statute. It’s expensive to file these claims; you have to hire an investigator and have proof. If you ask an attorney to take a risk on a contingency case, there has to be enough value for them to do that.”^[16]

Campaign finance

The following final campaign contribution totals were provided by the San Francisco Ethics Commission.^[4]

Committee	Amount raised	Amount spent
SF Tenants and Families for Affordable Housing	$455,886	$412,691
Share Better SF	$676,121	$725,876
Total	$1,132,007	$1,138,567

The top 12 donors to the committee filed in support of Proposition F are listed below:^[4]

Donor	Amount
Unite Here	$275,000
Unite Here Local 2 PAC	$120,000
CA Nurses Association PAC	$60,000
SEIU Local 1021	$50,000
American Hotel and Lodging Association	$49,000
Unite Here Local 2 General Fund	$35,000
Yerba Buena Consortium LLC	$35,000
United Educators of SF Candidate PAC	$31,500
Hotel Association of New York	$25,000
San Francisco Apartment Association PAC	$20,000
San Francisco Apartment Association	$20,000
Douglas Engmann	$20,000

Editorials

The editorial board of the San Francisco Examiner endorsed a vote in favor of Proposition F. The board argued that the measure was necessary to curtail the loss of long-term rental housing in the city and to properly enforce existing laws regarding short-term rental. The board wrote:^[17]

“

Proposition F, which seeks to impose stricter laws on short-term rentals, is needed to help stem the loss of rental units in this city, where the issue of affordability is displacing an increasing number of residents. This was a tough call for the Examiner because while we agree with this effort’s proponents that the short-term rental industry is having a negative impact on evictions and The City’s housing stock, we also recognize that in today’s market, short-term rentals are allowing some homeowners to survive here and make ends meet. Limiting rentals to 75 nights a year, as the measure would do, would hinder that ability.

San Francisco legalized short-term rentals in February, and created the Office of Short-Term Rental Administration and Enforcement in June. The staffing is inadequate to stop the abusers — those who convert entire buildings into hotels, or who rent out an apartment where they don’t live or those who fail to register and pay taxes — since the office is admittedly complaint-driven and not equipped to investigate the thousands of listings in The City. A remedy such as Prop. F is sorely needed since this administration and this current Board of Supervisors seems unable to recognize that giving private companies like Airbnb dominion over such an essential and scarce resource as The City’s rental units is bad policy.^[9]

”

—San Francisco Examiner editorial board^[17]

Campaign advertisements

Dear Airbnb, Actions Speak Louder Than Apologies
Join us if you've had enough with AirBNB - it's time to vote YES on Prop F!: http://bit.ly/nothanksairbnb
Posted by Yes on F - ShareBetter SF on Friday, October 23, 2015

Opposition

Opponents

San Franciscans Against Prop F image

SF for Everyone logo

Airbnb, an online platform for private, short-term rental posts, opposed this initiative and was largely responsible for the funding to launch an organized anti-Proposition F campaign called San Francisco for Everyone, No on F.^[1]^[18]

San Franciscans Against Prop F, which was not affiliated with Airbnb or any company or political party, also opposed Proposition F.^[19]

The San Francisco branch of Airbnb set up a network of 11 short-term renter advocates, one for each city district, to support the industry and oppose restrictions such as this initiative.^[20]

Home Sharers of San Francisco logo

Home Sharers of San Francisco, a local coalition of STR hosts, local businesses that benefit from local home sharing guests and other community members supportive of home sharing in San Francisco, opposed Proposition F.^[21]

Home Sharers of San Francisco Democratic Club, a club chartered by the San Francisco Democratic Committee to advocate on behalf of home sharers, also worked toward defeating Proposition F.^[22]

The Democratic County Central Committee (DCCC) voted to endorse a "no" vote on Proposition F.^[23]

Some members of the board of supervisors disapproved of this initiative and the similar ordinance proposed by Supervisor David Campos, arguing that the regulations were too strict and unreasonable. In general, this set of critics of strict restrictions on short-term rentals favored an alternative, more lenient ordinance introduced by Supervisor Mark Farrell. Although Airbnb was opposed to both restrictive ordinances as well as this initiative, the position of Farrell's supporters and short-term rental advocates coincided in so far as both groups opposed this initiative and Campos' ordinance.^[5]

The No on Prop F website listed the following endorsements of a "no" vote on the measure:^[24]

San Francisco Democratic Party
Lt Governor Gavin Newsom
Mayor Ed Lee
Assemblymember David Chiu
Board of Supervisors President London Breed
Supervisor Malia Cohen
Supervisor Julie Christensen
Supervisor Mark Farrell
Supervisor Scott Wiener
Board of Equalization Member Fiona Ma
San Francisco Planning Commissioner Michael Antonini
San Francisco Board of Education President Emily Murase
San Francisco School Board Member Hydra Mendoza
San Francisco Community College Trustee Alex Randolph
San Francisco Community College Trustee Brigitte Davila

San Francisco Republican Party
Log Cabin Republicans of San Francisco
Alliance for Jobs and Sustainable Growth
SF Chamber of Commerce
Bay Area Council
Hispanic Chambers of Commerce of San Francisco
San Francisco Firefighters Local 798
Consumer Watchdog
Alice B. Toklas LGBT Democratic Club
SF Young Democrats
Asian Pacific Democratic Club
Chinese American Democratic Club
Latinos Unidos Democratic Club
Noe Valley Democratic Club
District 5 Democrats
The Mission Democratic Club
Progress Democratic Club of San Francisco

Raoul Wallenberg Jewish Democratic Club
Black Young Democrats of San Francisco
Willie B. Kennedy Democratic Club
SF Moderates
San Francisco Technology Democrats (SF Tech Dems)
The Internet Association
The Parent PAC
Greater Geary Boulevard Merchant & Property Owners Assn
San Francisco Police Officers Association
Dani Sheehan-Mayer - Owner, Cliche Noe Gifts & Home* (Noe Valley)
Ike Shehadeh - Owner, Ike's Place (Castro)
Jesse Woodward - Owner, HiTops and Hecho (Castro)
Nelson Zhao - Chopsticks (Excelsior)
Araceli Espinoza - Thalia’s Jewelry (Mission)
JP Leddy, Vice President, Pan Hispanic Forum
Scott Hague, CAL and Associates

Arguments against

Airbnb logo

Opponents of this initiative argued that private, short-term rentals allow additional tourism in the city for people who could not otherwise afford it and in areas that would otherwise be off of the tourism grid. They also argued that the industry provides revenue for the city and a method for residents to make money through renting their property. Moreover, advocates of private rental practices claimed that putting up more red tape and restrictions would encourage more rental hosts to avoid registration, while lightening restrictions and mandatory reports would increase the number of voluntary registrants, as well as the hotel tax revenue for the city.^[1]

San Franciscans Against Prop F posted the following argument against the initiative:

“

If it were to pass, it would unleash serious, negative consequences that would be essentially irreversible.

Proponents have sold Prop F as the solution to regulating short-term rentals, but the City just passed and amended sensible regulations of short-term rentals in July 2015. We need to give the current law time to work.

While the City builds out its enforcement resources for the law currently in place, Prop F would complicate that work by creating new laws that would:

Privatize enforcement by creating a financial incentive to spy on and sue neighbors who might be hosting guests
Arbitrarily ban homesharing for anyone who lives in an in-law unit
Require the 50+ homesharing platforms operating in SF (such as Airbnb, VRBO, and HomeAway) to mass-collect and report private data to the government^[9]

”

—San Franciscans Against Prop F^[19]

Opponents also argued that, since the board of supervisors cannot amend citizen initiatives, provisions of Proposition F would be practically irreversible and any problems with Proposition F would have to be fixed through a lengthy process involving another ballot measure. They claimed that this inflexibility would be especially bad since short-term rentals formed such a new and fluid industry.^[19]^[25]

Airbnb representatives said, “This ballot proposal is nothing more than a Trojan Horse that would effectively ban home sharing, cost the city revenue, and make San Francisco unaffordable for thousands of families.”^[1]

San Francisco for Everyone, "No on F Campaign Commercial," August 25, 2015

The Airbnb San Francisco website featured the following arguments in favor of allowing Airbnb and other home-sharing website hosts to operate freely in the city:

“

Home sharing and Airbnb are helping to fight economic inequality by giving every resident the opportunity to turn their apartment or home into an economic asset:

More than 80% of Airbnb hosts share only the home in which they live and nearly three-quarters of Airbnb hosts use the income they earn to pay the bills and stay in their homes
In San Francisco, nearly half of hosts are low or middle income

Airbnb guests spend more time and money in San Francisco and explore diverse neighborhoods and small businesses that haven’t benefited from tourism in the past:

Airbnb generated $469 million in economic activity and supported 3600 jobs between April 2014 and March 2015
72% of Airbnb listings are outside the main hotel districts
A typical Airbnb guest spends 5.0 nights in San Francisco compared to 3.5 nights for a typical hotel guest; and the typical Airbnb guest spends almost $300 more per trip than the typical hotel guest^[9]

”

—Airbnb San Francisco^[20]

Critics of the initiative also opposed it on the basis of privacy, saying the initiative would violate the rights of property owners in an unacceptable way. John M. Simpson, the director of Consumer Watchdog’s Privacy Project, wrote an article critiquing this initiative. He wrote:

“

Clearly local governments have the right to regulate home sharing and should collect taxes.

[...]

What government must not do is unnecessarily violate people’s privacy on a wholesale basis and turn businesses into an enforcement arm of government.^[9]

”

—John M. Simpson^[26]

Simpson went on to claim that this unnecessary violation was exactly the means proposed by the short-term housing rental initiative, as well as a similar ordinance proposed by supervisors David Campos, John Avalos and Eric Mar.

He concluded:

“

The Campos ordinance and the ballot initiative would require home-sharing sites to routinely turn over to San Francisco individuals’ private financial information about the number of nights they rented their homes and amount paid for the rental of their property through the site. It is an unprecedented data dump.

Traditionally, search warrants and subpoenas are needed to get a corporation to turn over an individual’s personal financial data. Campos and the Engmann group would turn this upside down.

Instead, officials should investigate specific alleged violations when there is a clear justification and limited necessary records could be subpoenaed. Individual audits could be required when there was a good reason to believe someone was not paying their occupancy tax.^[9]

”

—John M. Simpson^[26]

Opponents also argued that Prop F was designed to inflict unreasonable penalties for violations.^[25]