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Mayor Lee’s promised Airbnb regulation working group never set up

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Mayor Ed Lee has been reluctant to move forward with the creation of a working group to study regulating short-term rental companies like Airbnb. (Jessica Christian/2016 S.F. Examiner)
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When Mayor Ed Lee vetoed a regulation last year on Airbnb limiting stays to just 60 days annually, he promised to establish a working group and to propose improved regulations by the end of February.

But the San Francisco Examiner has learned no such working group was ever set up.

For those backing stronger regulations on short-term rentals, the failure is seen as the latest setback in a mayoral administration criticized for being soft on Airbnb due to Lee’s cozy relationship with the company’s investor, Ron Conway. Opponents argue short-term rentals gobble up precious housing stock.

The Mayor’s Office, however, said it is only respecting the mediation process related to the federal lawsuit filed against The City last year by Airbnb over a separate law adopted last summer, which would assess fines and criminal penalties to Airbnb and other short-term home rental companies if they let homeowners rent rooms without registering with The City.

Homeaway later joined Airbnb’s lawsuit against The City to overturn the law, which, it argued, violates federal law protecting free speech online.

“After the court ordered The City, Airbnb and Homeaway to participate in mediation regarding the lawsuit that Airbnb and HomeAway brought against The City, the City Attorney’s Office advised that it was preferable to give deference to the court-mandated process before convening the working group,” Deirdre Hussey, Mayor Lee’s spokesperson, told the San Francisco Examiner on Tuesday.

John Cote, a spokesperson for City Attorney Dennis Herrera, said he couldn’t disclose if such advice was given.

“Legal advice we provide to our clients is protected by attorney-client privilege, so we can’t disclose any guidance we may or may not have provided,” Cote said Tuesday. He also said Wednesday that mediation continues and that he could not comment on “what’s discussed in them.”

A federal court legal filing Wednesday says The City will continue to not enforce the law, and both sides will next appear in court April 6.

The legislation the mayor vetoed in December was introduced by Board of Supervisors President London Breed. The legislation passed the board in a 7-3 vote and would have capped short-term rentals at 60 days annually.

Breed had joined the mayor in calling for the working group.

“I along with Supervisor Breed will convene all stakeholder groups early next year to examine strategic and thoughtful regulations to further streamline compliance, registration and enforcement of our short-term rental regulations and propose potential improvements to our existing regulations by February 28, 2017,” the mayor’s Dec. 6 veto letter read.

Breed told the Examiner on Tuesday that she later told the mayor that “me and a couple of the other folks would not be participating in any working group until the company withdraws their lawsuit. So there have been a lot of conversations to get them to that point.”

When asked if waiting only allows bad actors to continue to break the law, Breed said, “It probably does. But the good news is that The City has really been aggressively cracking down. We are not done with what we might propose around regulations. Part of it is, they realize we are not going to go away.”

Breed refuted that by staying in a holding pattern around existing regulations the company is being let off the hook.

“I don’t agree that they are getting away with anything,” Breed said. “I think that we are just being strict about the existing laws that are in place and we are being more aggressive about that until we can get some resolution to this.”

A spokesperson for Airbnb said in a statement Wednesday, “We are pleased with the progress to date on our discussions, and we appreciate the opportunity to continue talking with The City and remain hopeful we can reach a solution that protects The City’s housing stock and enables San Franciscans to continue sharing their homes.”

Supervisor Aaron Peskin, who voted in favor of the 60-day hard cap, has long blamed lawbreakers of short-term rental regulations for exacerbating the affordable housing crisis. This week, he questioned the postponement of the working group.

“The City convening a task force to discuss what the right fix is … doesn’t have any impact on the lawsuit,” Peskin said.

He continued, “The existence of the lawsuit and working on policy reforms aren’t mutually exclusive.”

Peskin, meanwhile, has introduced with Breed short-term rental legislation that he called an “olive branch” to such companies, which is scheduled to be heard before a Board of Supervisors committee next week.

The legislation seemingly indemnifies hosting platforms if they rely on information provided by hosts and that information turns out fraudulent by requiring “hosting platforms to exercise reasonable care in verifying that a residential unit is on the City Registry prior to accepting a fee for booking a short-term rental transaction.”

Kevin Guy heads The City’s short-term rental office overseeing registration and enforcement. To date, he said Wednesday there are 1,865 active hosts registered with The City out of more than 2,500 applications received. That’s a far cry from the 9,600 listings on Airbnb’s platform.

Guy said Peskin’s legislation is “furtherance of the mediation process” but said he couldn’t comment further on the basis that mediation is confidential.

Applications continue to come in “a steady clip,” Guy said, and there is both proactive and complaint-driven enforcement that, to date, has resulted in $1.2 million in fines related to 482 housing units.

Also related to the lawsuit is The City’s possible creation of an online application process, which a new city tech spending plan shows would cost nearly $400,000. Hosts have complained about the current paper-based cumbersome process of registering.

Guy said of the current regulations that “we do have good tools and very good resources for doing the enforcement against the egregious actors, enforcement against problem properties that are creating quality of life issues for neighbors.”

The office is restrained by the lack of data transparency — something he noted the law under litigation would help with — and the sheer limits of what a staff of five can do.

“It’s not as though we can go out and simultaneously issue 500 citations at a time,” Guy said.

Guy added that without data transparency “it’s really hard for us” to pinpoint those illegal host across the thousands of listings.

Dale Carlson, co-founder of Share Better San Francisco, which calls for increased enforcement, said the postponement of the working group is emblematic of a mayor who has been unwilling to crack down on Airbnb.

“That’s just a silly excuse,” Carlson said of the mayor’s using mediation to not form the working group. “They have no intention of bringing everybody to the table because this mayor has no intention of regulating Airbnb and we all know why.”

He added, “There is a reason those bumper stickers are floating around town that say ‘airbnLee, A Ron Conway Investment.’”

Carlson said there are “myriad other issues” a working group could be discussing that wouldn’t interfere with the lawsuit.

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