San Francisco mayor signs ordinance regulating tourism sublets

Reuters News
Posted: Oct 27, 2014 7:00 PM

By Aaron Mendelson

SAN FRANCISCO (Reuters) - San Franciscans who temporarily rent their homes out must now prove that they live in them most of the year and begin to pay hotel taxes, under an ordinance signed Monday by Mayor Ed Lee.

The new rules are meant to allow residents to make a little extra money by renting out their places now and then - but not turn them into full-fledged hotels, Lee said.

"San Franciscans who just want to share their home with occasional visitors will have a clear set of rules and restrictions to earn extra money to make ends meet," Lee said.

The new ordinance requires residents to live in their homes or apartments for nine months of the year in order to legally rent them out, a move aimed at keeping landlords from evicting tenants in order to market the units strictly to travelers.

The Northern California city has struggled for years to keep its housing stock from becoming too pricey, and the rise of online booking services such as Airbnb has led to worries that scarce units will be continuously rented to travelers instead of local residents.

Homeowners will need to apply for permission before renting out their dwellings, and pay a 14 percent tax on the money they bring in.

Andrew Szeto, interim manager of the San Francisco Tenants Union, said the measure does not do enough to protect tenants. He also said he was disappointed that the city did not collect back taxes from Airbnb for rentals taking place before the ordinance goes into effect next year.

"While it was intended to regulate these short term rentals, it's really just become another tax break for a tech company and another piece of legislation that will ultimately harm tenants in the city," Szeto said.

Airbnb, which initially opposed the rules, embraced them on Monday.

"The new law in San Francisco is a great victory for everyone who wants to share their home and the city they love," the company said on its blog.

(Editing by Sharon Bernstein and Sandra Maler)