The problem with the sharing economy

Airbnb seemed so simple — but collaborative consumption can raise complex issues

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steve@sfbg.com

Catbird turned me onto Airbnb almost two years ago, long before I'd ever heard of the "sharing economy" or "collaborative consumption," terms the tech industry is now using for companies that facilitate peer-to-peer rentals or otherwise take transactions once done through Craigslist to a glitzy new commercial level.

We were working together to build the Temple of Flux for Burning Man 2010 and chatting in the shop one evening. I mentioned wanting to find someone to sublet my apartment for the nearly three weeks that I was to spend on the playa that year, and she sang the praises of Airbnb, which she had recently started using to make some extra cash by renting out a room in the house she owns on Potrero Hill.

"The reason I decided to do it instead of a full-time roommate is it fits my lifestyle better," Catbird, aka Cathryn Blum, told me recently as we discussed her beloved Airbnb in light of recent controversies over whether such rentals should pay the city's 14 percent hotel tax. Catbird loves to meet visitors from around the world and help show them sides of San Francisco hidden from downtown hotel dwellers, as well as being able to keep her guest room vacant for visiting friends or family.

"Airbnb has been a godsend, and it's invigorated a lot of the neighborhoods that tourists might not come and visit," she said. "We're not competing with the hotels, the hotels don't provide that kind of experience."

That's what she and other Airbnb customers argued last month at a San Francisco Tax Collector's Office hearing on the issue, which resulted in the hotel tax [aka Transient Occupancy Tax] being applied to Airbnb and similar companies.

Airbnb was a godsend for me as well, a simple easing of my economic woes. At the time, I was just getting serious with a new girlfriend and spending most nights at her place. So we moved some of my stuff over there to clear space and protect my valuables, took some photos of my small studio apartment in the Mission, and created an Airbnb listing.

We initially listed my place for $75 per night, which more than covered my rent but was cheaper than most hotels, the sweet spot that would create enough demand that I could pick and choose guests to meet my needs. And it worked perfectly. Not only did I find tenants to fill most of my Burning Man vacancy, but I kept it up periodically throughout the fall, moving in with my girlfriend for days or weeks at a stretch and splitting the proceeds with her.

It seemed too good to be true. And as I began to learn, perhaps it was.

 

LAW AND TAXES

Something Airbnb doesn't tell you when you sign up is that you may be breaking the law and/or your lease (its spokesperson says that warning is in its terms of service, but I never saw it). Frankly, I knew that my lease didn't allow subletters, but my building is big, I really needed the money, and I figured that I wouldn't get caught, a calculation that many thousands of customers of Airbnb and other companies regularly make as well.

Later, well into by first foray as a landlord, thanks to Airbnb, I began to learn about some other complications that this business model creates in big, popular cities like San Francisco and New York that have complicated laws regulating landlord-tenant relations. For example, it's illegal in San Francisco to sublet your apartment out for more than you pay in rent.

I felt a little guilty about that one. In a city where almost two-thirds of residents are renters, yet where property owners wield tremendous economic and political power, there are good reasons for rent control, limits on converting apartments into condominiums, eviction protections, and the whole slew of complicated laws and regulations that govern the often-contentious relationship between landlords and tenants.

Comments

We just think AirBnB should collect it and pay it on our behalf the way Hotel reservation sites do. AirBnB is pretty silent on that issue as well.

I find it odd that rentals for less than 30 days are illegal, and yet, AirBnB is allowed to operate, and profit, from facilitating illegal activity, but the hosts are bearing the brunt of the blame and consequences.

I'm fine to register as a business, provided I don't get shut down for renting less than 30 days, I'm fine to pay some variation of a hotel type tax, but why I use AirBnB is because they facilitate payments so I don't have to spend my time doing it. I'm happy to pay their fees since it makes it easier to do. Most of us hosts want them to collect and pay the hotel tax just like other hotel reservation sites do.

I'm even fine for paying income taxes on my portion as long as that sanctions my activity as legal.

Until these questions are clarified, many hosts will be operating illegally or removing their listings, neither of which is good for San Francisco or AirBnB.

Posted by Fuzzy on May. 02, 2012 @ 9:54 am

They are perfectly legal. The 30 day rule simply means that such rentals are exempt from rent control. Which of course is why folks do them so much.

Posted by Guest on May. 02, 2012 @ 12:25 pm

Actually, Chapter 41a of the SF Administrative Code specifically prohibits renting an apartment for less than 30 days and holds the owner (defined as the actual owner OR the tenant leasing the apartment) liable for civil penalties of up to $1,000 per rental day as well as criminal penalties.

Further, David Chiu has proposed strengthing this provision to allow non-profits (think SFTU) to investigate and bring action against offenders. Steven should probably rethink admitting to his illegal rental in print since this is pretty much a slam dunk case if this should pass.

Posted by Guest666 on May. 02, 2012 @ 12:56 pm

Is this true? If so, this law is in need of immediate modification.

Posted by Guest on May. 02, 2012 @ 2:01 pm

Especially if it is a homeowner renting out a room or some such. AFAIK, it hasn't been tested in court or on appeal.

Posted by Guest on May. 02, 2012 @ 4:14 pm

It is clearly a law (read it for yourself in the SF Administrative Code) and I think it would be likely to hold up in court just as rent control laws have held up.

Posted by Guest666 on May. 02, 2012 @ 5:19 pm

if they have any validity or relevance. This law has never been litigated as far as we know.

And various aspects of rent control, including some voter-initiated additions to it, have been rejected by the courts.

This law is highly suspect since it tries to interfere with what a homeowner does with his own home, which is a much more invasive restriction than controlling the rent on a rental unit.

I suspect the law may possibly hold up when a tenant tries to do this, but it strikes me as very unlikely that it would pertain for an owner-occupied home. It is effectively a "taking" and an unreasonable restriction of basic property rights.

Posted by Guest on May. 02, 2012 @ 5:45 pm

I think the common justifcation for all areas of rent control is that it is regulation of a business and, as such, not subject to the "taking" provision. I don't agree with it, but I think one would have a very hard time fighting this law without deep pockets.

Also, the law may get much more punitive if David Chui's amendment is passed, so there may be some enforcement looming.

Posted by Guest666 on May. 02, 2012 @ 8:23 pm

rejected by the courts and, specifically, the more invasive aspects of it. Remember Bierman's attempt to bring TIC's under the condo process? Rejected by the courts. The "triple damages" clause? Rejected by the courts. Daly's "protections" against buyouts? Rejected by the courts. And so on.

Other times the State legislature passess laws limiting Rent Control e,g, Ellis Act and Costa-Hawkins Act.

Telling a homeowner that he can't rent out a spare bedroom for a few days here and there gets very close to the line and, IMO, crosses it. The law might hold up for tenants doing this, however.

Posted by Guest on May. 03, 2012 @ 5:51 am

No. You're operating a B&B. You're taking money. It's a business with commercial transactions. B&Bs are perfectly subject to regulation.

Posted by Guest on Nov. 27, 2012 @ 1:32 pm

in practice it is barely regulated, and many would aver that that is exactly how such an informal business should be regulated.

Posted by Guest on Nov. 27, 2012 @ 2:15 pm

If you look at the regulation for City of San Francisco, here's what it says.

http://www.municode.com/content/4201/14131/HTML/ch041a.html

From the code:

Section 41A.5 "(a) Unlawful Actions. It shall be unlawful for any owner to offer an apartment unit for rent for tourist or transient use."

Section 41A.4 "(a) Apartment Unit. Room or rooms in any building, or portion thereof, which is designed, built, rented, leased, let or hired out to be occupied, or which is occupied as the home or residence of four or more households living independently of each other in dwelling units as defined in the San Francisco Housing Code...."

Section 41A.4 "(c) Tourist or Transient Use. Use of an apartment unit for occupancy on less than a 30-day term of tenancy."

Many people use this law to say that vacation rentals are outlawed in the City of S.F. ... when ... if you read it, you will see that the law doesn't apply to buildings with 3 or fewer units.

Also note that even if a short-term vacation rental is operating in a building with 4 or more units, the only people who can bring a claim against the owner (according to the regulation), would be long-term tenants currently living in that same building.

(I'm sorry if the link to the Muni code above is not working right now. I just checked it, and it wasn't. :( I've been referencing this code for the past couple of years, and I've noticed there are days when it works and days when it doesn't.)

Posted by Guest on Jul. 05, 2012 @ 6:45 pm

Here is a link to the San Francisco Municipal Code, which is working today, thank goodness. If the link doesn't go right to it, do a search for "41A" to find it.

http://www.amlegal.com/nxt/gateway.dll?f=templates&fn=default.htm&vid=am...

Please read the Municipal Code for yourself. I have seen a lot of inaccurate information posted here as well as in other news articles on this subject.

In addition to the definitions noted above, I want to also highlight these, quoted from Section 41.A.4 :

(f) Owner. Owner includes any person who is the owner of record of the real property. Owner includes a lessee where an interested party alleges that a lessee is offering an apartment unit for tourist or transient use.

(g) Interested Party. A permanent resident of the building in which the tourist or transient use is alleged to occur or the City and County of San Francisco.

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Note that a "lessee" is counted as an owner, so indeed a regular renter who is doing short-term rentals is considered responsible for the misdemeanor and fines, etc. Also note that an "interested party" is defined strictly as another permanent resident living in the same building. So the only people who can legally file complaints are long-term (more than 60 days) residents in the same building.

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And I would like to further highlight these items from Section 41A.5 :

(b) Determination of Violation. Upon the filing of a complaint by a permanent resident that an unlawful conversion has occurred, the Director shall take reasonable steps necessary to determine the validity of the complaint ...

(c) Civil Action. Except as provided by Subsection (1) below, any interested party may institute proceedings for injunctive and monetary relief for violation of this Chapter. In addition, the owner may be liable for civil penalties of not more than $1,000 per day for the period of the unlawful rental. If the interested party is the prevailing party, such party shall be entitled to the costs of enforcing this Chapter, including reasonable attorneys' fees, pursuant to an order of the Court. If the interested party is a permanent resident, then the interested party shall retain the entire monetary award. Any monetary award obtained by the City and County of San Francisco in such a civil action shall be deposited in the Mayor's Office of Housing, Housing Affordability Fund less the reasonable costs incurred by the City and County of San Francisco in pursuing the civil action.

(d) Criminal Penalties. Any owner who rents an apartment unit for tourist or transient use as defined in this Chapter shall be guilty of a misdemeanor. Any person convicted of a misdemeanor hereunder shall be punishable by a fine of not more than $1,000 or by imprisonment in the County Jail for a period of not more than six months, or by both. Each apartment unit rented for tourist or transient use shall constitute a separate offense.

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It seems to me ... some of our permanent residents living in buildings with short-term rentals may like to know that they are eligible to receive up to $1000 per day for the period of unlawful rental. This money would be fined to the person doing the short-term rentals and awarded to the other long-term tenants (the "interested parties") in the same building.

Also I believe many of the folks casually renting their apartments out on AirBnB would be quite concerned to see the language in section 41.A.5 (d) which says that they are guilty of a misdemeanor and may be put in County Jail for up to 6 months for the offense! OUCH.

Of course, all of this only applies to buildings with 4 or more dwelling units (see definition provided in the code).

I'm not sure if people in the City even know that their own law is written this way. The folks at Airbnb like to say that the law isn't enforced, so it doesn't matter. But ... there are plenty of people who get way up on their high horses, saying that "vacation rentals are illegal," and quoting this regulation. So there seem to be a lot of people who WANT the law to be enforced.

I think the City needs to make a stand on this, one way or another. It's irresponsible to have a law on the books that you don't enforce at all. It causes discord among the people of the City. People opposed to vacation rentals can point at the AirBnB renters / sharing economy people and call them "illegal" and make them feel bad, even discouraging some from continuing what is often a beneficial thing for the community ... and meanwhile the Airbnb renters can say, "Yeah, well, the law isn't enforced, and I'm making lots of money, so who cares?"

Meanwhile it seems that fellow tenants in the same building stand to profit handsomely by suing their follow AirBnB "host" tenants for $1000 per day, the way the Muni code is currently written.

There are many sides and prongs to the issue, and the inconsistencies on the part of the City are not helping at all. It's not a healthy situation. We need someone who understands all sides of the issues to take leadership.

If folks at the Board of Supervisors need some technical guidance and help with practical solutions, I would be happy to offer my assistance.

Posted by Guest on Jul. 06, 2012 @ 9:10 am

My newly widowed dad lives alone in his single family home and started to share his space as a way to help others have an affordable stay in SF and a way to deal with his loneliness by meeting others. It was a beautiful arrangement until an anonymous person filed a short term rental complaint to the SF Planning Dept.

Am I reading correctly that this law only applies to buildings with 4 or more dwelling units?

Additionally, only people in the building can complain?

Posted by Guest Ori on Feb. 25, 2013 @ 1:59 pm

that was changed in one of many "retrospective" chnages that have hurt property owners such as your elderly parent.

Anyone can file a report to the DBI, but usually it is a pissy tenant or neighbor.

Posted by anon on Feb. 25, 2013 @ 2:16 pm

Perhaps I should have been more clear in my article, but the Tax Collector's policy calls for Airbnb (or other economic middlemen) to pay the hotel tax to the city, so it's fairly simple from the perspective of both guests and hosts, who won't be required to get a business license as I understand it.

Posted by steven on May. 02, 2012 @ 2:06 pm

Steven, just so you know, it is super easy to get a Business License. It only costs $25 per year, so it's no big deal, nothing to be afraid of. You fill out a simple form to get your business license, and that's it. The business license gives you a certificate number, and this is what enables you to pay the hotel tax. You pay both the monthly hotel tax and the annual registration fee (only $25) online. It's really easy.

I advertise my apartment on AirBnB, and I do pay the hotel tax (14%) + tourism improvement district fee (1%) on any booking of 29 days or less.

I pay it online with the city, and it's no problem.

I really don't understand what all the fuss is about. We had our attorney (who is a tenant's rights advocate) review our Payment Contract and Guest Rules before starting to rent our apartment. Our attorney is the one who told us about the hotel tax and that based on her reading of the law, we would definitely need to pay the tax for any stay of 29 days or less. I read the law, too (which is quite brief and to the point), and I agreed with her.

I've mentioned it to Airbnb a number of times, that I wish they would make the hotel tax built in to their payment system. As it is, I have to e-mail with the guest specifically before they submit their payment, and tell them that $xxx amount of their payment is for the lodging, and $yyy part of their fee is for the hotel tax and tourism fee, and $zzz part of their fee is for the Airbnb service charge, etc. I wish AirBnB had this broken down for the guests as a built-in thing. In response, AirBnB has requested that I simply ask the guests to pay the hotel taxes in cash upon arrival; they have said that this is what other AirBnB hosts in San Francisco do. (Really?) But yeah ... I want to have documentation of all of our transactions, and I want to inspire trust from our guests ... so I don't deal in cash.

But the bottom line is ... yes, I do advertise on AirBnB, and yes I do pay the hotel tax for stays of 29 days or less. NO BIGGIE.

Posted by Guest on Jul. 05, 2012 @ 6:22 pm

Much of the question about whether people should pay hotel tax is based on whether a room can be considered a "hotel" when it is just a spare bedroom in someone's rented apartment, for example.

If you go to Article 7 of the "San Francisco Business and Tax Regulations Code," you come to this definition:

(d) "Hotel." Any structure, or any portion of a structure, including any lodginghouse, roominghouse, dormitory, Turkish bath, bachelor hotel, studio hotel, motel, auto court, inn, public club, or private club, containing guest rooms and which is occupied, or is intended or designated for occupation, by guests, whether rent is paid in money, goods, labor, or otherwise. It does not include any jail, hospital, asylum, sanitarium, orphanage, prison, detention, or other building in which human beings are housed and detained under legal restraint.

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If you take out the parts where they are listing examples, it comes to:

"Hotel. Any structure, or any portion of a structure, ... containing guest rooms and which is occupied, or is intended or designated for occupation, by guests, whether rent is paid in money, goods, labor, or otherwise."

Now, I don't why the authors of this code neglected to define the word "guest." But I think we'll have to assume that "guest" is anyone who does not qualify as a permanent resident, which is defined in Article 7:

(g) "Permanent Resident." Any occupant as of a given date who has or shall have occupied, or has or shall have the right of occupancy, of any guest room in a hotel for at least 30 consecutive days next preceding such date.

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Note that there are also some exemptions to the tax. You can read the code yourself to see if your guests qualify for these. (In my previous post, I remembered the code for the hotel tax as being very brief and to the point, but now that I re-read it, I stand corrected. :) It is actually quite lengthy. More what one would expect from a tax law, yes!)

If you go to the link below, hopefully Article 7 will come right up. If not, search for the word "guest," you will come to Article 7.

http://www.amlegal.com/nxt/gateway.dll?f=templates&fn=default.htm&vid=am...

Posted by Guest on Jul. 06, 2012 @ 9:30 am

and I have very little interest in paying a 14% "hotel tax". And of course the city has zero ability to enforce what they think is the law here anyway.

If the city hates BnB, then repeal rent control. I would much prefer to rent to long-term tenant but, as often happens, the well-meaning rent ordinance actually hurts tenants because it causes people like me to go short-term.

Posted by anon on Feb. 25, 2013 @ 3:09 pm

You are changing the use of the property from residential to hotel use, which is not allowed in RH-1 (single-family) zoning districts, and is allowed only by conditional use (i.e., notice sent out to neighbors, then a hearing before the Planning Commission) in other residential districts. Check San Francisco Planning Code Section 209.2(d).

Posted by Guest on Sep. 17, 2012 @ 8:24 pm

Can you share your lawyer's name?

I don't know how to fill out the application.

Posted by Guest Ori on Feb. 25, 2013 @ 2:40 pm

Obviously the tax systems that apply to these new rentals need to evolve with the times. Hopefully the Mayor will facilitate this.

Posted by Guest on May. 02, 2012 @ 10:24 am
x

yes

Posted by michaelxyz on May. 02, 2012 @ 12:06 pm

spend what is really only a few nights in their home is really going too far. While the idea that that is any way similar to staying at the Grand Hyatt is laughable.

I can see the liability for income tax that is generated by anyone who receives cash in return for a service. I can equally see how it would be relatively easy to "forget" about that and probably not get caught. But either way, that's not a city issue.

Moreover, any attempt to try and treat this like a hotel stay is simply going to drive the activity underground. If using an agency leads to a 1099 and a city hotel tax bill, then people will simply find temp renters thru CraigsList or similar, and do everything on a cash basis. Or people will "swap" homes on a non-cash basis, as happens with timeshares. As ever, if you overtax something, you kill the goose that lays the golden egg.

If we have to tax this activity at all, and I'm not convinced that we do, then it should be at a much lower rate than full-service hotels because, well, it's not full service.
The rent control issues aren't so important, since any owner can Ellis a building and then do what he wants with it anyway. Better to allow this and modestly tax it, than drive it underground and beyond regulation.

Posted by Guest on May. 02, 2012 @ 12:27 pm

The writer lost credibility with me when he first tries to lay the blame on Airbnb for not telling him that his lease did not allow subletting, but then quickly backtracks and admits that he did know that his lease prohibits subletting. To make matters worse, the writer claims to be shocked when he discovered that he was supposed to pay taxes on the money he made, and seems to try to foist blame on Airbnb again.

Why would income from Airbnb be "free money" that is not taxable? I can't tell if the writer is kidding himself, or if he really is that lost that he doesn't understand the legal obligation to pay taxes on income.

There are numerous important and interesting issues that arise out of the sharing economy that are not mentioned in this article. Like the fact that the San Francisco Tax Collector, who is not an elected official and does not have the legal authority to impose new taxes, has unilaterally imposed a 14% tax on Airbnb users by simply redefining key terms in the tax code such as "hotel" and "operator". If he can do that, maybe he will redefine the term "charitable tax-exempt organization" so that I qualify as one and no longer are subject to taxation. After all, if the Tax Collector has the power to redefine a person who rents out their spare bedroom on the internet to be a "hotel", then why can't I be redefined to be a charitable organization. I help out needy people in various ways all the time!

There are numerous important and interesting issues that arise out of the sharing economy that this article doesn't even mention, let alone discuss in any depth whatsoever. Instead, the writer discusses his personal experience using airbnb including earth-shattering revelations that his lease does not permit subletting and the IRS expects him to pay taxes on income.

Posted by michaelxyz on May. 02, 2012 @ 12:53 pm

Actually, the Treasurer/Tax Collector is an elected position, and he didn't redefine anything, the law is that "guest rooms" rented out are subject to the Transient Occupancy Tax, which helps cover general city operations, including a variety of services that visitors to the city use. As far as my decision to include personal details and perspectives in my story, I think that my experience was fairly typical and similar to others that I've interviewed who weren't aware of local laws and tax obligations. We're all ignorant of certain ways, and I professed my ignorance regarding this new industry because the story seemed to call for that level of honesty, despite how it may reflect on me. I also didn't "blame" Airbnb, but I did illustrate that its business model relies on services that may actually be illegal, and I believe it's a valid observation to note that the company doesn't explicitly warn customers of that fact before they sign up. I'm sure there are many angles on the Sharing Economy I didn't discuss (we did have two other articles in this package), but I think most readers appreciated my approach, based on the feedback that I've been receiving directly. Thanks for reading.

Posted by steven on May. 02, 2012 @ 2:19 pm

your federal and state income tax on the "income". I suspect that you can deduct some costs from that income in the same way that normal landlords do.

While the liability for breaking your lease is minimal as your LL would have had to give you some type of notice at the time and, at this point, it's moot.

Whether the city will get away with treating this as a hotel is something that the courts will decide. I could easily see that designation being challenged.

Posted by Guest on May. 02, 2012 @ 4:18 pm

Steven,

I, for one, appreciate your candor in this article and can understand your failure to understand the myriad rules affecting SF housing policy. However, you do need to note that the issue of tax collection is only part of the problem. You also broke the law under Chapter 41a, and can be subject to very stiff penalties (draconian some might say).

I hope that this experience gives you some perspective on how difficult it is in this city to be a small landlord. Given the complexity of the laws surrounding rentals, it creates a minefield of potential pitfalls when renting even a single unit to a tenant. There are many small landlords (think duplex or triplex owners) who feel very vulnerable when dealing with the confusing and sometimes contradictory laws. Hence the lack of new, smaller rental buildings when at one time duplexes and triplexes were the standard form of housing in most neighborhoods in this city (and in my opinion give it much of its character).

Posted by Guest666 on May. 02, 2012 @ 5:35 pm

I've done this on and off for over a decade. There is no monitoring or enforcement. I suspect that no resources exist to chase this up.

Better to do it privately than through a company IMO.

I agree the rules around rentals are insane.

Posted by Guest on May. 02, 2012 @ 5:56 pm

One thing this article doesn't mention is how sites like airbnb or even craigslist, with it's daily or weekly rentals, affect the rental market in a city like San Francisco. Surely some landlords and renters with spare rooms are choosing to use these sites to fill apartments or extra rooms that would otherwise, in many cases, be available on the rental market thereby further reducing the supply in an already tight rental market.

These types of rentals are especially advantageous to landlords since they can earn what would otherwise be a month's rent in a number of days and they don't have to worry about rent control issues with the units. An article in the Chronicle recently estimated that rents have increased between 30-40% in San Francisco in the past year - an increase a landlord is able to easily pocket by renting by the day or week through these sites than if s/he were to get a regular, monthly tenant and be subject to rent control laws. While it's hard to estimate how much of an effect this is having on the rental market, it's safe to say that it's certainly not helping.

As someone who is currently searching for a rental in San Francisco, I can't help but wonder if all the posts I see on craigslist for daily or weekly rentals would be spaces that would otherwise be available as regular rentals were it not for this "sharing economy".

While I think it's nice that sites like airbnb create more of a unique experience for visitors to San Francisco, I feel that they hurt the City in two ways; they are taking away business from hotels and they are taking away units from the rental market. I'm glad the City has decided to apply the hotel tax to these rooms. On the other hand, I do see the advantage of such a site for someone having a spare room for a few days, but I wonder what percentage of posters that really is. The main problem I have is with people who use these sites to make a side business of rentals and thereby deplete the city's limited rental stock.

Posted by Guest on May. 02, 2012 @ 4:37 pm

considered to be so punitive to many owners and landlords that they simply sidestep it by doing only short-term lets. You really cannot blame owners for doing what makes the most sense for them with their own property.

So if you are finding it tough to find a place, then you should really be supporting the abolition of rent control, as that would then free up all those places for regular rentals. Most landlords would rather have a steady tenant than an endless parade of strangers in their home. But the rules right now make long-term lets very risky for an owner.

Realistically, it's impossible to legislate what a homeowner does with his own home, and even rent control exempts single-family homes and condo's. What we really need is for rent control to go away and for permits to be granted for the large-scale construction of new rentals. Right now, that cannot happen.

Posted by Guest on May. 02, 2012 @ 5:04 pm

Mr. Gullicksen is wrong. VRBO does not convert entire blocks of apartments into short term rentals. VRBO represents individual owners--not renters--of second homes who make those homes available to the public for periods from several days to several months. If Mr. Gullicksen wants to apologize to VRBO for this outright falsehood, he is welcome to call VRBO anytime.

In most jurisdictions across the country, any rental for less than 30 days is subject to "hotel" taxes--these are not in any way, shape or form "new" regulations, nor is renting short term a "new" activity. Renting ones's back room, or one's entire home by the day or the week is a standard economic activity that pretty much has been around forever.

I understand that people may not want this economic activity to be subject to "hotel" taxes, but their choice is to work with those who want to change the law, not simply to say it doesn't apply because somehow this centuries old business is somehow "new". It is not.

Posted by Carl Shepherd on May. 02, 2012 @ 5:32 pm

14 years ago using CraigsList and never had a problem. The only difference here is that there is an intermediary and it is easier for the city to hit them up for taxes than it is to chase down lots of individuals doing this on the down low.

It's rather like how California tries to hit up Amazon for out-of-state internet purchases to collect sales tax, which so far has failed. Whereas if you travel to Oregon to buy an item free of sales tax, CA has no way of knowing.

So if the city tries to inpose this tax, it will affect the intermediary, but people will still do this off the grid.

Posted by Guest on May. 02, 2012 @ 5:48 pm

Months ago, I had a candid discussion with an Airbnb employee. I had never heard of the service and would never use it. Why? Because my landlord has forced me to be a sub-tenant with the master tenant of 14 years covering the rent. We have cheap rent thanks to rent control and this is the only way we can survive as artists and activists. I instantly knew that my lease would not allow any type of deal that Airbnb provides.

He went on and on about how he was living with his girlfriend and paying rent (and change) on his apartment with Airbnb. His landlord had no idea and we wasn't too concerned about the lease. mind you, this young man was probably paying 3x as much in rent as I currently am.

my main comment to this employee, who was oblivious of the concept, was "wow! Airbnb has taken an anarcho-socialist concept [i.e., fuck the landlord and do what you want!] and totally capitalized it and made it hip." The surprised employee's reply was something like, "huh? I guess so..."

Glad that couch surfing.org is out of this sharing economy loop (or at least this article). I used this service a few times and had great experiences with folks who were not asking for any kind of money transaction. we sometimes even cook meals together, making it a real travel experience (as opposed to staying in an empty apartment).

who cares about taxes? Take money out of the transaction and you don't have a problem!

Posted by Guest on May. 03, 2012 @ 2:06 am

landlord is "screwed" as a result and not otherwise?

Most of the people using BNB are owner-occupiers and couldn't care a hoot about "anarcho-socialism" (whatever that means).

Incidentally, an easy way around the so-called "30 day rule" is to make all rentals for 31 days but make sure that the tenant can leave with one days notice and no penalty.

Posted by Guest on May. 03, 2012 @ 5:55 am

Recently POOR Magazine ran a piece on the vast number of empty units in SF. Their data, derived from the recent census, showed 30,000 empty units, which, if supply and demand were active, would bring rentals down to a couple of hundred bucks, instead of the current thousands.

I wonder if these 'empty units' are actually being used in this way, and are a double scam on the populace.

The discussion of cars also brings to mind the vast number of Repos that are sold at auction. Are these being bought up and 'rented' in this way also?

A crushed economy has a multiplier effect on those who have lost everything.

Posted by Guest David Grace on May. 03, 2012 @ 3:50 pm

decides that he does not want to rent it out?

How does the fact that there might be 30,000 such owners change that right?

Posted by Anonymous on May. 03, 2012 @ 4:52 pm

The scam is you're jacking up everyone else's rent by taking rooms off the market with an illegal hotel. B&B's are not a new concept. They're guest lodging subject to licensing and taxation.

Posted by Guest on Nov. 27, 2012 @ 1:57 pm

It was the attempt by the Santa Monica city council to ban that right that directly led to the Ellis Act which has evicted more tenants than any landlord would otherwise have ever needed to do.

It's called the law of unintended consquences.

Posted by Guest on Nov. 27, 2012 @ 2:19 pm

My 3 unit building is much, much more valuable vacant than it is with three rent controlled tenants. Furthermore, if those tenants have "protected" status, it is worth even less.

Result - 30,000 vacant units in SF.

It's called unintended consequences, and it's literally Econ 101. Maybe POOR can do some research on that.

Posted by Longtime Lurker on May. 03, 2012 @ 5:40 pm

that they are totally exempt from rent control.

So let's see. Shall I collect a grand a month from some lowlife "activist" or purveryor of bad art, who will cling to the place until he is dead?

Or $100 a night from a German tourist who is guaranteed to leave and will probably clean the whole place with his toothbrusg top to bottom?

Hmm, tough one.

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Posted by garmin nuvi 1450 on Jun. 01, 2013 @ 12:18 am

Does Airbnb assume liability for their referrals in the event of misadventure? Who would someone seek redress from if, say, the house Airbnb has put them in burns down and takes all their stuff with it?
What if an Airbnb referred guest is robbed, or worse, in the lodging to which they were referred?

Posted by Guest one question on May. 05, 2012 @ 11:48 pm

Whenever a landlord chooses a tenant he takes the risk that they may cause damage or loss, or commit crimes on the premises.

That is why there are leases and contracts - so liability is clearly defined and agreed.

airbnb is no different in that regard than any service who helps landlords find tenants. The property owner always has to make the final decision on who to let in their home.

Posted by Anonymous on May. 06, 2012 @ 8:10 am

Renters who are renting short-term are putting their landlords (the ones who own the building and assume liability if it burns down, etc) at risk, unless the landlords are self-insured. The typical landlord insurance policy does not cover short-term rentals.

The quotes we got for insuring our building for short-term rentals went from about $1000 when it was assumed we'd rent long-term, to $4500 to $6000 annually. At first we bought the $4500 policy. A few months later, we found a policy for $2500 and were able to switch. Thank goodness for the cheaper price, but we're still paying an extra $1500 per year for insurance to cover short-term rentals.

If something goes wrong (building burns down, etc), the insurance company may refuse to pay the claim if they found out the building was being used for short-term rentals, if this use was not covered in the insurance contract.

Posted by Rachel Donovan on Jul. 06, 2012 @ 10:01 am

The question is: with whom does liability for the safety of a referred GUEST reside?

One would assume that Airbnb warrants it will only refer visitors to safe, clean lodging. What happens if this is not the case?

Posted by I'll try again.... on May. 06, 2012 @ 7:17 pm

If I ever found out one of my neighbors was pulling this, I would call my landlord faster than you can say "hotel tax". It's one thing if my neighbors have guests they know, or even a backpacker staying with them a la couchsurfing.com - my neighbor is present and accountable. It's quite another if it's somebody they don't know and they aren't even around. Talk about disrespectful of your neighbors and their safety.

Posted by Guest on Jun. 19, 2012 @ 12:29 am

Rent control benefits more of the wealthy, than the poor. It's why after a decade old study of the annual income of rent controlled tenants, tenants groups insisted the city not do another study. Why tenants who can afford $3K, $4K and up a month apts need rent protected is laughable: for diversity, so we have even more wealthy people who can keep their housing costs down as their income increases? Why are tenants parking spots and views "protected", when both are considered luxuries, in SF, by any standards? If there was means testing -- so only those who are supposed to benefit from rent control, do ... fine, but rent control is for those who have it, have had it a long time, and are determined to keep it for life. They don;t care about new comers wanting to live also in SF - regardless of age, economics, health, ethnic background. If they did, rent control would be over hauled for those who it was initiallyt designed to serve. Meanwhile, no matter how you slice it, landlords will find ways to keep reducing the rental stock to avoid the absurd SF policies and those who want housing from hereon in, will be discriminated against since any landlord with brains is going to try and avoid the myriad new groups SF only laws support - "protected" groups, older folks ...

Posted by Guest on Jun. 25, 2012 @ 5:18 pm

The author is going after the wrong concept....the concept of a gift economy is not to be blamed. A gift economy working within an economy based on money is an oxi-moron. Just like its so hard to be a truly purely 'ethical' or "conscious" business within the confines of our money system. As long as money is used, there is no real gift and sharing. We can all do the best we can and we do but what we really need to do is stop using money and start a REAL gift economy, then these issues will subside. Look into the Venus Project for one such idea of a sharing economy. And please don't even bring up the words socialism or communism, both of those models operated under a money system too and that's why they were corrupt.
We owe it to our survival, the survival of the planet and all species to really give this idea of a sharing/gift economy a chance and that will only be by ending the use of money.

Posted by Guest on Jul. 08, 2012 @ 1:17 pm

One more reason not to live in Taxifornia. BTW airbnb is not 'sharing economy' it is cap-i-tal-ism - learn it, learn to love it. Sharing econ is more where you give your pad to someone and then take over theirs when traveling with no money exchanging hands.

Posted by Guest on Oct. 12, 2012 @ 6:58 am