After two years of intense work and countless hours of public testimony, my legislation to regulate short-term rentals will be voted on today by our Board of Supervisors. With 5,000 online listings every night, it's time to move beyond San Francisco's tendency toward endless discussion. That's why I'm proposing a reasonable approach to this complex and contentious issue.
Everyone agrees that the current situation cannot continue. I share the frustration of tenants, homeowners and neighbors alike who object both to the current rules that make any rental of less than 30 days illegal, as well as to the lack of enforcement that has allowed bad actors to abuse the practice and take much-needed housing off the market. We need to take the housing needs of all of our residents into account. That's why my proposed law distinguishes between reasonable and abusive behavior and establishes clear standards for accountability.
The core of my proposal allows a resident to rent short-term on a limited basis at their primary place of residence — but completely prohibits the activity for second or vacation homes or for any place not occupied by a potential host. We've seen too many cases of tenants being evicted under the Ellis Act so their apartments can become full-time hotels. That is simply unacceptable.
But we've also seen hundreds of residents come forward to testify that they depend on renting out a spare bedroom in their home to make their rent or mortgage in order to survive in San Francisco. Unchecked, short-term rentals contribute to our housing affordability crisis, but reasonably regulated, they can help people survive it.
Besides the central requirement of permanent residency, to rent short-term under my proposal, a resident must also register and obtain permission from the Planning Department, pay hotel taxes, be covered by liability insurance of no less than $500,000, ensure compliance with building safety rules and abide by rent-control laws.
Residents who fail to register or don't maintain good standing would face stiff penalties in addition to losing their permission to rent short-term. The penalties will double or triple with multiple offenses. For the first time, the law would regulate hosting platforms like Airbnb, requiring them to notify their hosts of city laws and collect and pass on to The City the hotel taxes owed by their users.
In recent weeks, critics have said the legislation is not ready to be passed, yet they agree that the status quo is unworkable. Unfortunately, we can't say we are in desperate need of change and then argue that we are not ready to make decisions.
Unlike the ballot initiative this group paid for signatures this past summer, my legislation was not thrown together without any public input. It was developed over the course of two years with feedback from tenants, property owners, housing organizations, hotels, business and neighborhood associations, and city departments. Tenant organizations drove the requirement of primary residency, hotels and their workers pushed for the collection of hotel taxes, and landlords and property owners successfully sought protections for existing leases and the requirement of liability insurance.
The long public hearings at the Planning Commission and the Board of Supervisors have also led to welcome improvements to the legislation to further strengthen enforcement, protect affordable housing, maintain the quality of life in our neighborhoods and ensure building safety. The legislative process has worked.
I believe that our legislation strikes the right balance by giving primary residents the flexibility to share their housing to supplement their income and cover high housing costs, but with proper restrictions and limitations to prohibit illegal hotel conversions and protect our housing stock. If we all agree we are in need of a solution, the time to act is now. We have the opportunity today to take this important step forward.
David Chiu is president of the Board of Supervisors.