Airbnb

Tobener Law Center

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San Francisco attorney Joseph Tobener has been doing tenants rights work in San Francisco for more than a decade, starting his own practice in 2002, where he currently employs three other attorneys and two paralegals. Another pair of attorneys who used to work there recently spun off their own practice.

In the last year of so that Tobener came onto our radar with the work he’s done fighting evictions and displacement, including representing an organization leading those fights, San Francisco Tenants Union, and paying attorney to do one day a week of volunteer work for SFTA, the San Francisco Housing Rights Committee, and other organizations. 

“We’re busier than we’ve ever been. We get about 60 calls a week and we always give free consultations,” Tobener told us.

Among those calls have been tenants displaced so landlords can use Airbnb to rent rooms to tourists and get around local rent control laws and other tenants protections, an increasingly high-profile issue that Tobener has helped elevate through stories in the San Francisco Chronicle and Bay Guardian (see “Residents vs. tourists,” Feb. 4).

“I feel like we’ve made some progress in getting people aware of this issue,” he told us.

Under contract with SFTU, Tobener has gone on to sue seven more landlords who have evicted longtime tenants in favor of short-term tourist rentals that are illegal under city law, and he says that he’s preparing to file many more such cases (see “Lawsuits target Airbnb rentals,” April 29).

After also scoring a big recent victory by getting the city to finally fix elevators in public housing projects, Tobener has made a thriving small business out of defending the longtime residents from displacement.

21 Masonic Ave, SF

(415) 504-2165

Tobenerlaw.com

Lawsuits target Airbnb rentals

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LAWSUITS TARGET AIRBNB RENTALS

The San Francisco City Attorney’s Office last week filed a pair of lawsuits against local landlords who illegally rent out apartments on a short-term basis, units that had been cleared of tenants using the Ellis Act. Meanwhile, the San Francisco Tenants Unions has hired attorney Joseph Tobener to file more such lawsuits, and he is preparing to file at least seven lawsuits involving 20 units.

The lawsuits are the latest actions in a fast-moving crackdown on Airbnb and other online companies that facilitate short-term apartment rentals that violate city laws against converting apartments into de facto hotel rooms, including VRBO.com and Homeaway.com.

Board of Supervisors President David Chiu recently introduced legalization that would legalize, limit, and regulate such rentals, a measure that will be considered this summer. That legislation comes on the heels of Airbnb’s decision to stop stonewalling the city (and us at the Guardian, which has been raising these issues for the last two years) by agreeing to start paying the transient occupancy taxes it owes to the city for its transactions and creating new terms of service that acknowledge its business model may violate local laws in San Francisco and elsewhere (see “Into thin air,” 6/6/13).

As we’ve reported, City Attorney Dennis Herrera has been working with tenant groups and others on a legal action aimed at curtailing the growing practice of landlords using online rental services to skirt rent control laws and other tenant protection, removing units from the permanent housing market while still renting them out at a profit.

“In the midst of a housing crisis of historic proportions, illegal short-term rental conversions of our scarce residential housing stock risks becoming a major contributing factor,” Herrera said in a public statement. “The cases I’ve filed today target two egregious offenders. These defendants didn’t just flout state and local law to conduct their illegal businesses, they evicted disabled tenants in order to do so. Today’s cases are the first among several housing-related matters under investigation by my office, and we intend to crack down hard on unlawful conduct that’s exacerbating—and in many cases profiting from—San Francisco’s alarming lack of affordable housing.”

Tobener tells the Guardian that the San Francisco Tenants Union hired him to discourage local landlords from removing units from the market. “The San Francisco Tenants Union is just fed up with the loss of affordable housing,” Tobener told us. “It’s not about the money, it’s about getting these units back on the market.” (Steven T. Jones)

 

SF LOOKS TO MARIN FOR RENEWABLES

Just in time for Earth Day, a renewed effort to reduce the city’s carbon emissions was introduced at the April 22 Board of Supervisors yesterday. Sup. John Avalos introduced a resolution calling for a study of San Francisco joining Marin Clean Energy, which provides renewable energy to that county’s residents.

The move is seen largely as an effort to circumvent Mayor Ed Lee’s opposition to implementing a controversial renewable energy plan called CleanPowerSF (see “Revisionist future,” April 15).

“Mayor Lee and the Public Utilities Commission objected to CleanPowerSF, but they have offered no other solution to provide San Franciscans with 100 percent renewable electricity,” Avalos said in a public statement. “With this ordinance, we can either join Marin or we can implement our own program, but we can no longer afford to do nothing.”

The resolution is the latest effort in the long saga to implement CleanPowerSF, San Francisco’s proposed renewable energy alternative to PG&E, whose current energy mix is only 19 percent renewable. Much of PG&E’s current mix is dirty and directly contributes to half of San Francisco’s carbon footprint, according to the city’s own recent Climate Action Strategy.

Joining Marin under a Joint Powers Authority would provide a vehicle for San Francisco to enact CleanPowerSF’s goals, long blocked by the mayor. San Francisco’s renewable energy effort may have lingered in legal limbo for years, but Marin made the switch to renewables in 2010.

“It’s something people want, and it also reduces greenhouse gas emissions,” Marin Clean Energy Executive Officer Dawn Weisz told the Guardian. Much of Northern California, she noted, has little choice but to use PG&E for their electricity.

“The people never chose to have a monopoly in place,” she said. “People like having choices.” (Joe Fitzgerald Rodriguez)

BEACH FIRES CONTAINED

The National Parks Service is once again moving to limit and maybe even ban fires on Ocean Beach, replaying an episode from 2007 that was temporarily solved by volunteers and artistic new fire rings placed by the group Burners Without Borders, despite a lack of follow-through by NPS’s Golden Gate National Recreation Area.

Citing complaints about burning toxic materials, leaving messes, and people drinking on the beach (gasp!), the GGNRA this week announced a summer pilot program that would include moving the curfew up from 10pm to 9pm, installing a dozen new fire rings, and improved public outreach and monitoring of the conditions on the beach.

“We [have] over the years seen a rising problem over safety and general breaking of park rules like broken bottles. And with incidents of assault and underage drinking, mostly occurring during the night, GGNRA Area Director Howard Levitt told the Guardian.

But Tom Price, who helped create the 2007 compromise, said GGNRA never kept its end of the bargain — such as installing more rings to supplement the half-dozen created by artists, or creating visible signage so visitors would know what the rules area — and now it’s acting in a rapid, unilateral, and unreasonable way to ban beach fires.

“They never did the outreach or education or put out more fire rings,” Price said, urging people to let GGNRA know they support allowing fires on Ocean Beach, one of just two spots within GGNRA jurisdiction where they’re allowed (Muir Beach is the other). “The Parks Service has to be reasonable, and banning fires after 9pm in not reasonable.” (Steven T. Jones and Bryan Augustus)

TAX WEALTH, PIKETTY SAYS

French economist Thomas Piketty got a warm welcome in San Francisco last week when nearly 200 people turned out to hear him discuss what is fast-becoming the defining book of this new Gilded Era of escalating disparities in wealth: Capital in the 21st Century.

“The book has been so popular that Harvard University Press has run out,” The Green Arcade owner Patrick Marks said in introducing Piketty at a the April 22 event held across Market Street from the bookstore, in the McRoskey Mattress Company, in order to accommodate the large crowd.

Indeed, Capital has recently been lauded by a string of influential publications, ranging from The Nation through The New York Times to the Wall Street Journal, all acknowledging this as perhaps the most exhaustive study on wealth data ever collected — and a clear-eyed warning that capitalism isn’t the self-correcting system that its biggest boosters claim it is.

Piketty’s work shows how when the return on capital is greater than the annual growth rate of the overall economy, which is usually the case (except when interrupted temporarily by the major wars of the 20th Century, or the 90 percent tax rate on the highest US incomes after World War II), that dynamic consolidates wealth in ever-fewer hands, which is bad for the health of the economic system. The only real cure, Piketty concludes, is a progressive global tax on wealth. Yet Piketty tries to avoid being too prescriptive, choosing to let his research speak for itself. “All I’m trying to do is present this book so everyone can make up his own mind,” Piketty told the gathering. In fact, he thinks the cure he outlines at the end of his book is less important than what comes before it: “You can disagree with everything in Part IV and still find interest in Parts I, II, and III.” (Steven T. Jones)

Guardian Intelligence: April 30 – May 6, 2014

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ONE FOR THE BOOKS

Polish your reading glasses: Sat/3 marks this first ever California Bookstore Day, a party featuring readings, author and artist appearances, and one-day-only, limited-edition book releases, taking place simultaneously at some 90 bookstores up and down the state. It’s modeled on the mega-successful Record Store Day, natch. A dozen bookstores in San Francisco have signed on, including Green Apple, City Lights, Booksmith, Books Inc., and Borderlands. Check www.cabookstoreday.com to find the celebration closest to you. Because hey, what kind of party has Amazon thrown for you lately?

ANOTHER ONE BITES THE DUST

The Attic, the dank 24th Street dive bar known for its decrepit vinyl booths, a pervasive questionable smell, and, somehow, boatloads of charm, closed its doors for good last week. Those in the know say owner Roger Howell (a former owner of Mad Dog in the Fog) will be using his liquor license at the schmancy new Gashead Tavern on Mission. No word yet on whether there will be DJs at that establishment who play nothing but the Clash if you ask them, or bartenders who give you endless bowls of Goldfish crackers, or a welcoming gang of hard-drinking regulars who cheer when you find your phone still at the bar after leaving it there the night before. RIP.

AIRBNB REG SHIT SHOW

Last year, when we at the Guardian were the only ones shouting about Airbnb‘s tax evasion and illegal short-term rentals, is was a lonely struggle. Then other journalists caught onto the story, Sup. David Chiu introduced his regulatory legislation a couple weeks ago, and the issue began to heat up. This week it all became a full-blown shit show, with rival rallies at City Hall on April 29. Opponents of the legislation are threatening a fall ballot measure that would reinforce the short-term rental ban in residential areas and give rewards to people who rat out their Airbnb-using neighbors. Perhaps we should be careful what we wish for.

MANY HAPPY RETURNS

It’s alive! The UC Theatre — the 1,460-seat Berkeley landmark, once beloved for its killer repertory film programming, but closed since 2001 — will undergo an eight-month renovation starting this summer and re-open as a nonprofit live music venue in 2015. According to a press release sent out by its new directors, Berkeley Music Group, the venue will present “approximately 75 to 100 shows a year, featuring a culturally diverse range of local, national, and international artists performing music genres ranging from Americana to zydeco and everything in between.” Located just two blocks from the Downtown Berkeley BART station, it will feature both touring and local bands and musicians, as well as comedy shows, a speaker series, and (yesss!) film screenings. Bonus: a full-service restaurant and bar, too. Bookmark www.theuctheatre.org to stay posted on the latest.

GLOBAL ECO-ACTIVISTS HONORED

Six winners of the Goldman Environmental Prize were awarded this week in San Francisco. The prestigious awards were given to Desmond D’Sa of South Africa, who organized a campaign to shut down a toxic waste dump; Ramesh Agrawal of India, who led disenfranchised communities in a successful effort to seek information on industrial activities and shut down a proposed coal mine; Suren Gazaryan of Russia, who helped expose the illegal use of federally protected forestland; Rudi Putra of Indonesia, who is targeting palm oil plantations that have triggered massive deforestation; Helen Slottje of New York, who provided pro-bono legal assistance to help pass bans on fracking; and Ruth Buendía Mestoquiari who led indigenous people of Peru in a fight against large-scale dams that would have displaced them.

WESTERN HIPNESS

Missionites and other east-side San Franciscans are always bashing the Outer Richmond and the Outer Sunset. Dubbed the Outerlands, its too foggy, too far, too quiet, or too-blah to make the visit worthwhile. You know what? The Outerlands doesn’t need you anymore, Mission! They’ve got a brand new parklet at Simple Pleasures Cafe on 35th avenue. Soon they’ll have overpriced coffee, Google buses, and white-washed ethnic food too! Avenues, represent.

TECH HEAD GOES FREE

San Francisco-based RaidumOne CEO Gurbaksh Chalal allegedly beat his girlfriend 117 times, but the man will not go to jail. A jury found Chalal guilty of misdemeanor violence and battery charges, and will serve three years probation, spend 52 weeks in a domestic violence program and perform 25 hours of community service. The court through out video evidence of the incident that police had seized from Chalal’s home as inadmissible. Chalal wrote on his blog, “This was all overblown drama because it generates huge volumes of page views for the media given what I have accomplished in the valley.” He then invoked the “American Dream” and lamented the cost to his soon-to-go-public company. Silicon Valley doesn’t have an entitlement problem. Nope.

FLAPPING FANCY

The Guardian’s Roaring ’20s-themed “Feathers and Fedoras” party last Friday at the de Young Museum drew a huge crowd of vintage-lovers. Zincalo Trio performed old-time favorites and gypsy jazz, the flapper-attired Decobelles dance troupe did a mean Charleston, and the de Young’s dazzling “Georgia O’Keefe and Lake George” exhibit provided a perfect artistic backdrop.

NOW READ THESE

The 2014 Northern California Independent Book Awards were announced last week, and must-read winners include Anthony Marra’s A Constellation of Vital Phenomena (fiction), George Albon’s Fire Break (poetry), Mary Roach’s Gulp: Adventures on the Alimentary Canal (nonfiction), Amy Stewart’s The Drunken Botanist (food writing) and Al Capone Does My Homework by Gennifer Choldenko (middle-grade readers). The NCIBA winners were determined by a coalition of independent bookstores, see more at www.nciba.com

CLIPPERS OWNER RACISM

How did people react to the racist comments allegedly made by Los Angeles Clippers owner Don Sterling? Clippers players: Removed their warmup shirts in a silent protest so that Clippers team logos would not be displayed. Magic Johnson: “He shouldn’t own a team any more. And he should stand up and say, ‘I don’t want to own a team any more.'”

President Barack Obama: “When ignorant folks want to advertise their ignorance, you don’t really have to do anything, you just let ’em talk.”

Snoop Dogg (in an online video addressing Sterling directly): “Fuck you, your mama, and everything connected to you, you racist piece of shit.”

 

New coalition opposes Chiu’s Airbnb legislation UPDATED

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An unlikely coalition has formed to oppose legislation sponsored by Board of Supervisors President David Chiu that would legalize and regulate short-term apartment rentals facilitated by Airbnb and other online companies, which are now illegal in San Francisco.

[UPDATE: Some of those same opponents are also now threatening to place a rival measure on the fall ballot, the San Francisco Chronicle just reported. It reportedly shares some aspects with the Chiu legislation, such as a registration system, but it limits rentals to only commercial areas and includes rewards for those who turn in violators to the authorities].

The coalition includes landlord and tenant activists, as well as organized labor and neighborhood groups. It will square off against Airbnb and its hosts, which have pledged to lobby against limits created by the Chiu legislation — all of which could elevate this to the biggest fight of the summer at City Hall. Tomorrow [Tues/28], the coalition of opponents will rally outside City Hall at 10am, while Airbnb supporter will hold a “Speak Up for Home Sharing” rally at 12:30pm.

As we’ve been reporting, it took Chiu more than a year of negotiations with Airbnb, the San Francisco Tenants Union, affected city agencies, and other interested parties to arrive at legislation that requires hosts to register with the city, finally pay the city’s transient occupany tax, and limits stays to 90 nights per year.

But after more than two years of Airbnb’s defying city law and refusing to pay its taxes — scofflaw behavior tacitly supported by Mayor Ed Lee, who share a financial benefactor for the company in venture capitalist Ron Conway — several city constituencies pledged to oppose legislation that would now legalize its activities.

In particular, some longtime affordable housing and neighborhood activists say the legislation irresponsibly legalizes the conversion of residential apartments into tourist hotels throughout the city, creating neighborhood safety concerns and overturning decades of work to protect rent-controlled housing.

Meanwhile, Chiu’s opponent in the race for the Assembly District 17, David Campos, has been highlighting lobbying reports showing 61 contacts between representatives of Airbnb — including formers City Hall insiders David Owen and Alex Tourk — and Chiu’s office.

“Do you think tenant and neighborhood groups met with David Chiu 61 times?” Campos said during his endorsement interview with the Guardian last week, accusing Chiu of letting Airbnb write its own regulations without regard to neighborhood concerns.

Chiu didn’t immediately return our phone calls, but we’ll update this post if and when we hear back. [UPDATE: Chiu legislative aide Judson True just called and disputed how the legislation is being characterized by its opponents and rejecting calls to withdraw the legislation: “Everyone is entitled to a position on Sup. Chiu’s legislation, but we would hope they would engage in the legislative process and not just toss hand grenades. This is a serious policy issue that requires thoughtful dialogue and to simply call for the withdrawal of the legislation is irresponsible.”

True also said the legislation only legalized short term rentals “under very narrow circumstance and that legalization allows enforcement against the most egregious actors.” He also noted how Chiu has consistently opposed converting apartments to tourist uses and called for Airbnb to pay its taxes, calling the legislation a difficult balancing act: “We know that Airbnb has issues with the legislation. They didn’t write the legislation, period.”]

In the meantime, here’s the full text of the press release issued today by the new coalition, which will be holding a press conference at 10am tomorrow on the steps of City Hall:    

For Immediate Release: 
Monday, April 28, 2014

NEWS RELEASE

SAN FRANCISCO CITYWIDE COALITION SAYS NO 
TO PROPOSED CHIU LEGISLATION

Board of Supervisors trying to convert residential housing to 
short-term rentals

Press conference Tuesday April 29, 2014 Steps of City Hall at 10:00 am

San Francisco — Organizations representing usually divergent interests ranging from tenants to landlords, and from hotel workers to the hospitality industry have joined forces with neighborhood and homeowner associations to oppose legislation introduced by Supervisor David Chiu to legalize the short term rentals of residential property throughout San Francisco.

“In the face of an unprecedented housing crisis, Supervisor Chiu’s legislation to legalize the short term rentals of residential property will only exacerbate the housing crisis. This practice is detrimental to our rent-controlled housing stock”, said Janan New, Executive Director of the San Francisco Apartment Association.

“Our studies have shown that with over 10,000 units of housing being rented out over Airbnb, HomeAway and other websites this practice is having a negative impact on hotel workers and San Francisco’s hospitality industry”, said Mike Casey, President of UNITE HERE Local 2.

“The proposed legislation would rezone the entire city from residential zoning to commercial zoning in one fell swoop. We hear complaints from almost every neighborhood about the detrimental effects of short term rentals on the quality of life of tenants and residents”, said John Bardis, former President of the Coalition for San Francisco Neighborhoods and former San Francisco Supervisor.

“Supervisors Chiu’s legislation would repeal hard won controls on Single Resident Occupancy housing, threatens current affordable housing provisions for over 30,000 permanently affordable units, would transform newly approved “in-law units” into high priced motel rooms and make “below market rate” units lifetime luxury hotels. It is the single biggest threat to affordable housing ever proposed by a San Francisco Supervisor” stated longtime affordable housing advocate Calvin Welch.

“Airbnb and other hosting platforms owe the City millions of dollars in unpaid hotel taxes. It is high time that the City collect these taxes which pay for the arts and vital city services and programs. The proposed legislation does not clearly hold Airbnb and similar organizations responsible for collecting and remitting the hotel tax”, said former Supervisor Aaron Peskin.

All of these organizations are calling for Supervisor Chiu to withdraw his legislation at a press conference on Tuesday April 29 on the steps of City Hall at 10:00 am.

Lawsuits go after SF landlords doing illegal short-term apartment rentals

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The San Francisco City Attorney’s Office today filed a pair of lawsuits against local landlords who illegally rent out apartments on a short-term basis, units that had been cleared of tenants using the Ellis Act. Meanwhile, the San Francisco Tenants Unions has hired attorney Joseph Tobener to file more such lawsuits, and he is preparing to file at least seven lawsuits involving 20 units.

The lawsuits are the latest actions in a fast-moving crackdown on Airbnb and other online companies that facilitate short-term apartment rentals that violate city laws against converting apartments into de facto hotel rooms, including VRBO.com and Homeaway.com.

Board of Supervisors President David Chiu recently introduced legalization that would legalize, limit, and regulate such rentals, a measure that will be considered this summer. That legislation comes on the heels of Airbnb’s decision to stop stonewalling the city (and us at the Guardian, which has been raising these issues for the last two years) by agreeing to start paying the transient occupancy taxes it owes to the city for its transactions and creating new terms of service that acknowledge its business model may violate local laws in San Francisco and elsewhere.

As we’ve reported, City Attorney Dennis Herrera has been working with tenant groups and others on a legal action aimed at curtailing the growing practice of landlords using online rental services to skirt rent control laws and othet tenant protection, removing units from the permanent housing market while still renting them out at a profit.   

“In the midst of a housing crisis of historic proportions, illegal short-term rental conversions of our scarce residential housing stock risks becoming a major contributing factor,” Herrera said in a public statement. “The cases I’ve filed today target two egregious offenders. These defendants didn’t just flout state and local law to conduct their illegal businesses, they evicted disabled tenants in order to do so. Today’s cases are the first among several housing-related matters under investigation by my office, and we intend to crack down hard on unlawful conduct that’s exacerbating—and in many cases profiting from—San Francisco’s alarming lack of affordable housing.”

The lawsuits allege violations of the city’s Planning and Administrative codes, as well as the state’s Unfair Competition Law, targetting 3073-3075 Clay Street, owned by defendants Darren and Valerie Lee; and 734 and 790 Bay Street, which is owned or managed by defendants Lev, Tamara and Tatyana Yurovsky (founder of SRT Consultants).

Guardian calls to both parties were not immediately returned, but we’ll update this post if and when we hear back. Tobener tells the Guardian that the San Francisco Tenants Union hired him to discourage local landlords from removing units from the market.

“The San Francisco Tenants Union is just fed up with the loss of affordable housing,” Tobener told us. “It’s not about the money, it’s about getting these units back on the market.”

The San Francisco Apartment Conversion Ordinance prescribes penalties of $1,000 per day for units rented out for less than 30 days. That now applies to buildings with four or more units, although Chiu’s legislation would lower that to buildings with two or more units while legalizing such rentals and requiring host to register with the city and live in the units for at least 275 days per year, meaning rentals would be limited to 90 days per year.

Tobener’s lawsuits list 210 violations in the 20 units it targets, seeking fines totaling $210,000. But he emphasized that money is not the issue: “The San Francisco Tenants Union doesn’t care about the penalties, they just want to put the message out that we’re going after landlords who do this and we want those units returned to the market.”

Airbnb comes clean with San Francisco

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Airbnb came clean this evening, sending out new terms of service drafted April 7 that customers must agree to before conducting further business starting April 30. The new agreements seem intended to address longstanding issues in San Francisco that the Guardian first raised in May 2012, and have been recently joined by other journalists in spelling out and highlighting.

In the opening of its new Terms of Service, Airbnb wrote (in all caps): “IN PARTICULAR, HOSTS SHOULD UNDERSTAND HOW THE LAWS WORK IN THEIR RESPECTIVE CITIES. SOME CITIES HAVE LAWS THAT RESTRICT THEIR ABILITY TO HOST PAYING GUESTS FOR SHORT PERIODS. THESE LAWS ARE OFTEN PART OF A CITY’S ZONING OR ADMINISTRATIVE CODES. IN MANY CITIES, HOSTS MUST REGISTER, GET A PERMIT, OR OBTAIN A LICENSE BEFORE LISTING A PROPERTY OR ACCEPTING GUESTS. CERTAIN TYPES OF SHORT-TERM BOOKINGS MAY BE PROHIBITED ALTOGETHER. LOCAL GOVERNMENTS VARY GREATLY IN HOW THEY ENFORCE THESE LAWS. PENALTIES MAY INCLUDE FINES OR OTHER ENFORCEMENT. HOSTS SHOULD REVIEW LOCAL LAWS BEFORE LISTING A SPACE ON AIRBNB.”

It seems like a good first step. Next we’ll see whether the company follows through with paying its local taxes and working with the city on legislation to legalize more of its business model in San Francisco.

Covered San Francisco unveiled

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At the tail end of a long Board of Supervisors meeting last week, Sup. David Campos introduced legislation to create Covered San Francisco, a city healthcare option designed to remedy a coverage gap that will be created under the Affordable Care Act.

Lately, we’ve gotten reports of San Franciscans hoping to enroll in Covered California — the state-run health insurance marketplace created under the ACA — leaving meetings with enrollment counselors in tears of frustration. Even though these would-be enrollees are technically eligible for Covered California — which makes them ineligible to stay in Healthy San Francisco — the insurance cost is nevertheless too high to be a realistic option.

“In high cost-of-living cities like San Francisco, many will simply not be able to afford it,” Campos said when he introduced the legislation. “The most authoritative study says 40 percent of San Franciscans who are eligible for Covered California still will not be able to afford it.”

Co-sponsored by Sups. John Avalos, Eric Mar, and Jane Kim, the legislation seeks to address the problem by creating a new option for employees to receive subsidies to purchase health insurance under Covered California through the Department of Public Health. The funding would be derived from an employer spending requirement already in place under the city’s Health Care Security Ordinance, the law that created Healthy San Francisco.

The proposal also seeks to close a loophole that Campos said incentivizes employers to set up health reimbursement accounts for employees that cannot be used to purchase Covered California insurance plans. To discourage the use of these accounts, the proposal would make spending irrevocable, meaning employers would be unable to claw back funding they’ve contributed. (Rebecca Bowe)

 

PG&E INDICTMENT DOESN’T GO FAR ENOUGH

A federal grand jury in San Francisco issued a criminal indictment against Pacific Gas & Electric for negligence in the 2010 gas pipeline explosion in San Bruno that killed eight people and destroyed an entire neighborhood. But that falls far short of what this rapacious company and its conniving executives — none of whom face personal criminal charges — should be facing.

The indictment omits key details of what happened leading up this tragic and entirely preventable explosion, buying into the fiction that there is a meaningful difference between PG&E Co., the regulated utility, and PG&E Corp., the wealthy and powerful Wall Street corporation. This is a stark example of how corporations are given all the rights of individuals, but accept few of the responsibilities, with the complicity of the political and economic systems.

The 12-count indictment focused on violation of the Pipeline Safety Act, which requires companies to maintain their potentially dangerous pipelines, including keeping detailed records and doing safety inspections that would detect flaws like the faulty weld that caused the San Bruno explosion on Sept. 9, 2010 — work the company negligently failed to perform.

But PG&E’s wanton disregard for public safety, combined with the greed and shameless self-interest of then-CEO Peter Darbee and other executives, goes far deeper than that. A report by the California Public Utilities Commission released in January 2012 found that $100 million in ratepayer funds that had been earmarked for pipeline maintenance and replacement, including this section in San Bruno, was instead diverted to executive bonuses and shareholder profits.

“PG&E chose to use the surplus revenues for general corporate purposes,” the audit said, noting that the company was flush with cash at the time and there was no good reason to neglect this required maintenance. (Steven T. Jones)

 

911 DISPATCHERS STRESSED

The controversial tax breaks given to tech companies in San Francisco in 2011 came under fire again last week, as emergency dispatchers protested crippling budget shortages on April 2 in front of the Department of Emergency Management.

“When you call 911, there should be enough people working to pick up the phone,” said Ron Davis, an emergency dispatcher in San Francisco for 13 years. “It’s upsetting when you or someone you love is in a life-threatening emergency and you’re put on hold for 30 seconds, 45 seconds, or even a minute and longer.”

The department receives, on average, nearly 3,000 phone calls per day, and the workers who spoke at the rally described long hours and inadequate coverage for the volume of calls that they receive. California law mandates that 90 percent of 911 calls be answered in 10 seconds or less, but in San Francisco that number often drops to 60 percent or lower. Davis said that on particularly busy nights, such as New Year’s Eve, there can be up to 20 calls in the queue waiting for an available dispatcher.

The rally was organized by SEIU Local 1021 and was part of the union’s contract negotiations with the city. Larry Bradshaw, vice president for the San Francisco region of the union, said workers were willing to make sacrifices during the recession but now, “we just want to recoup our losses and make up for lost ground.” (Brian McMahon)

 

WILL AIRBNB PAY UP?

Airbnb has agreed to start collecting and paying the transient occupancy tax in San Francisco sometime this summer — finally acknowledging that’s the only workable way to meet the tax obligation it shares with its hosts. But that leaves open the question of whether this $10 billion corporation intends to pay the tax debt it has accumulated for years while trying to duck its responsibility to the city.

That’s at least several million dollars that the city could really use right now. As we’ve previously reported, Airbnb commissioned and publicized a study in late 2012 claiming its San Francisco hosts collected $12.7 million from Airbnb guest in fiscal year 2011-12, meaning they should have collected and remitted to the city $1.9 million.

In early 2012, the San Francisco Tax Collector’s Office held public hearings to clarify whether the TOT applies to the short-term rentals facilitated by Airbnb and similar companies, ruling in April 2012 that the TOT does apply to those stays and that it is a “joint and several liability” shared by the hosts and Airbnb, which conducts the transaction and takes a cut.

As we also reported, despite heavily lobbying during the hearing and being acutely aware of the outcome and its resulting tax obligation, Airbnb simply refused to comply and tack the 15 percent surcharge onto its transactions, as similar companies such as Roomorama were doing.

So if Airbnb was really being the good corporate citizen that it’s now claiming to be, it would not only start charging the 15 percent fee and sharing that money with the city, it would also cut San Francisco a check for around $4 million, or whatever the tax would be on what this growing business has collected from its guests since April 2012. (Steven T. Jones)

 

BURSTING THE MONTEREY SHALE BUBBLE

“We’ve been told that there’s a great oil boom on the immediate horizon,” billionaire investor Tom Steyer noted at the start of a March 27 talk in Sacramento.

But Steyer (who has pledged to spend $100 million on ad campaigns for the 2014 election to promote action on climate change) wasn’t there to trumpet the oil industry’s high expectations. Instead, he introduced panelists who dismissed the buzz on drilling the 1,750-square-mile Monterey Shale as pie-in-the-sky hype.

Dr. David Hughes, a geoscientist with the Post Carbon Institute, and researcher Robert Collier had been invited to speak by Next Generation, a policy group focused on climate change that was co-founded by Steyer.

Both experts questioned the findings of a University of Southern California study that wound up being cited time and again as the basis for the oil industry’s arguments, in the context of a statewide debate on fracking.

Partially funded by the Western States Petroleum Association, the USC report outlined a rosy economic outlook stemming from oil extraction in the Monterey Shale, estimating that it would create 2.8 million jobs and $24 billion in tax revenues, findings that were “echoed by politicians of both parties,” Collier noted.

Yet prominent economists could find no basis for certain claims. “They said: ‘We cannot see any justification for these incredible numbers,” Collier reported. “They seem too big to be believable.” The Post Carbon Institute and Physicians, Scientists and Engineers for Healthy Energy published their own report challenging the findings, titled Drilling California: A Reality Check on the Monterey Shale. (Rebecca Bowe)

Will Airbnb pay its accumulated tax debt to SF?

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So now that Airbnb has agreed to start collecting and paying the transient occupany tax in San Francisco sometime this summer — finally acknowledging that’s the only workable way to meet the tax obligation it shares with its hosts — that leaves open the question of whether this $10 billion corporation intends to pay the tax debt it has accumulated for years while trying to duck its responsibility to the city.

That’s at least several million dollars that the city could really use right now. As we’ve previously reported, Airbnb commissioned and publicized a study in late 2012 claiming its San Francisco hosts collected $12.7 million from Airbnb guest in fiscal year 2011-12, meaning they should have collected and remitted to the city $1.9 million.

In early 2012, the San Francisco Tax Collector’s Office held public hearings to clarify whether the TOT applies to the short-term rentals facilitated by Airbnb and similar companies, ruling in April 2012 that the TOT does apply to those stays and that it is a “joint and several liability” shared by the hosts and Airbnb, which conducts the transaction and takes a cut.

As we also later reported, despite heavily lobbying during the hearing and being acutely aware of the outcome and its resulting tax obligation, Airbnb simply refused to comply and tack the 15 percent surcharge onto its transactions, as similar companies such as Roomorama were doing.

So if Airbnb was really being the good corporate citizen that it’s now claiming to be, it would not only start charging the 15 percent fee and sharing that money with the city, it would also cut San Francisco a check for around $4 million, or whatever the tax would be on what this growing business has collected from its guests since April 2012.

That’s at the very minimum, giving the company the benefit of the doubt that there really might have been an honest difference in opinions on whether the clear language of the tax code really applied to its transactions. But if we really wanted to be sticklers about this, Airbnb would actually owe the city millions of dollars more than that, going all the way back to its founding in 2008.

“The April 2012 regulation did not change the tax.  It provided more information about the definition of room and the merchant of record in a transaction.  We have always expected for operators to collect and remit the applicable transient occupancy tax,” Greg Kato, the policy director for the San Francisco Tax Collector’s Office, tells the Guardian, later adding that short-term stays “have always been taxable,” even in apartments.

Airbnb continues to duck questions from the Guardian, including our latest on whether it intends to pay its back tax obligation, and the Chronicle didn’t raise the issue with Airbnb. But a statement that Airbnb’s David Hantman put out on the company’s website yesterday does offer some clues about its change of heart.

After announcing plans to collect and remit the TOT in Portland last week, Hantman said he held a question-and-answer session with its hosts in San Francisco “and announced that we’ll soon be collecting and remitting taxes on behalf of our hosts in San Francisco as well.”

Note the legalistic language that continues to avoid accepting that the company is also responsible for that tax debt, not just its hosts. But it appears the company finally realized it can’t just pass the buck to its hosts.

“We have repeatedly said that we believe our community in San Francisco should pay its fair share of taxes. We know from countless discussions with our hosts that they want to pay taxes, but some of these rules are arcane and difficult to follow. Some hosts have even tried to pay taxes in San Francisco and been turned away,” he wrote.

But that statement is a deceptive one, avoiding the fact that short-term stays are actually illegal in San Francisco, violating Administrative Code Section 41A, as well as a variety of planning and zone codes that prevent tourist hotels from being located in residential areas.

That’s why Airbnb hosts have had a hard time paying their taxes, as the Guardian has repeatedly reported, not because “these rules are arcane and difficult to follow.” It’s because Airbnb’s business model isn’t legal, something that Board of Supervisors President David Chiu has been trying to create legislation to address, although negotiations have now dragged on for more than a year.

“We want to help solve this problem. We’re still working on some operational details, but our goal is to launch this program for San Francisco hosts this summer,” Hantman wrote, making the company sound helpful and oh-so-public spirited.

Given that any decent coder could probably figure out how to add a 15 percent surcharge onto Airbnb’s San Francisco transactions in less than an hour, I’m a little skeptical about the “operational details” that will drag its tax compliance out for several more months. My guess is it is trying to retain some political leverage in negotiations over the Chiu legislation.   

“We are a growing company in a new economy. We are taking this action—and initiating our entire Shared City program—as we strive to help make cities stronger, safer, more financially stable. And we’re excited to continue this pilot program in San Francisco. This city is our home and we look forward to continuing to work with everyone here to make it an even better place to live, work and visit,” was how Hantman closed his post.

Hopefully that means San Francisco can expect a $4 million check from Airbnb any day now. 

Airbnb finally agrees to pay its taxes in SF

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Airbnb has apparently finally agreed to pay its taxes in San Francisco. The San Francisco Chronicle is reporting that the company, long called out by Guardian articles and editorials as a tax scofflaw blatantly defying a city ruling, will start collecting and remitting the 15 percent transient occupancy tax by this summer.

Airbnb CEO Brian Chesky announced last week that it would start doing so in New York City, Portland, Ore. and other cities that take part in its vaguely defined Shared City program. That prompted us to send Chesky and other Airbnb executives an email on March 27 asking, “I’m wondering why you’re willing to collect and remit taxes in Portland, but you’ve been unwilling to do so in San Francisco, the city where you’re headquartered and where the city ruled more than two years ago that you should be doing so?”

They never responded to that inquiry, which is part of the company tactic of stonewalling the Guardian on an issue that we were the first to report over a year ago when we discovered the company was simply refusing to pay a tax bill that our reporting found amounted to nearly $2 million annually in late 2012, and probably significantly more now.

The San Francisco Tax Collector’s Office ruled in April 2012 that Airbnb should be paying the TOT on the thousands of local stays that it facilitates, and that the company and its individual hosts were jointly liable for that tax obligation. But because Airbnb’s business model violates local laws against short-term rentals, it was difficult for individual hosts to get the license they needed to collect and pay the tax.

What prompted Airbnb’s sudden change of heart? Were they feeling the pressure? The Chronicle article doesn’t really make that clear, but we’ll let you know what we hear.

The sordid saga of Airbnb — a $10 billion “outlaw middleman” — continues

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SF-based Airbnb is making news again this week, from the San Francisco Chronicle following up our stories about how landlords are sending eviction notices to tenants who are breaking their leases and local laws in using the short-term rental services to national outlets trumpeting Airbnb’s estimated $10 billion in valuation, which is more than some of the biggest hotel chains.

But nobody seems to be calling out how those two things are connected, except perhaps in ValleyWag’s passing but spot-on reference to the SF-based company as an “outlaw middleman.” That’s a good label for a scofflaw company that is making buckets of money by openly flouting tenant and tax laws in San Francisco, New York City, and other cities around the world.

Meanwhile, as the City Attorney’s Office continues preparing to take legal action against Airbnb, new companies are popping up to make it even easier for residents to illegally monetize their rent-controlled apartments, such as AirEnvy.com, which encourage people to “profit from your home or apartment by renting out unused space through a full service management marketplace.”

The company charges people 18 percent to manage their Airbnb rentals, checking guests in and out, cleaning up, and whatnot. And most of its testimonials are from San Franciscans, such as Rob, who writes, “I used to spend hours managing my Airbnb, exchanging keys with guests, and cleaning. Now, Airenvy does all that for me.”

Breaking local laws against short-term rentals has never been easier! All this infuriates Janan New of the San Francisco Apartment Association, who tells the Guardian that more than 1,100 rent-control apartments are listed on Airbnb at any time, and she’s been working with landlords to identify and evict such tenants.

Yet she denies that many landlords are using Airbnb to get around rent-control laws — such short-term rentals are also usually illegal, even for owners — and told us, “If people are breaking the law on our side, I want to know who it is.”

And as this highly lucrative clusterfuck continues, Board of Supervisors President David Chiu is still mired in his year-long efforts to create a legislative remedy for all of this. But Airbnb seems to be taking its local political problems seriously, this week hiring David Owen — a well-connected former legislative aide to Chiu’s predecessor, Aaron Peskin — away from Platinum Advisors to work on public policy for the company.

Stay tuned, folks, there’s lots more to come on an issue that the Guardian started covering years ago when few were paying attention to how an illegal business model was being used to create a multi-billion-dollar company.   

AirBNB apartment advertised for “XXX Freakfest” orgy

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A Manhattan comedian put his apartment up for rent on SF-based AirBNB, only later to find his renter advertising out his apartment for an orgy, Gawker reported Friday. While hilarious, the incident highlights key points in the New York attorney general’s litigation againts AirBNB. And the San Francisco City Attorney may soon look into them as well.

The problem? Cities have no data on how AirBNB rentals are being used. Usually the concern is over landlords renting through AirBNB at the expense of evicted long-term tenants. In this case, the tenant asked comedian Ari Teman if it was alright to have family over for a wedding. It turns out he meant to use the apartment for much wilder aims.  

Teman walked through the lobby of his building, just before leaving for a trip, only to overhear his new tenant say “they’re shutting us down,” according to Gawker. Suspicious, Teman Googled his tenant’s phone number and found a Tweet advertising a “BBW panty raid” party. 

For the unitiated, BBW stands for Big Beautiful Women. Talk about the wrong time to leave. One wonders if Teman was just bummed he missed out on all the fun. He needn’t have worried, as the next advertisement listed was for a “XXX Freak Fest” — in Teman’s own apartment.

The damage to his apartment may also have gotten him miffed. His furniture was damaged and overturned, and bags of condoms and loads of liquor were strewn about his apartment. 

The tenant, who Gawker identified as “David,” said an agreement between he and Teman specified he could have up to 50 guests, which Teman denies. 

To its credit, AirBNB put up Teman in a hotel while his apartment is cleaned, changed his locks, and ponied up $23,817, all within 24 hours, Gawker reported.

The best part? Afterwards, the now infamous company Taiwanese Animators already has a 3D animated cartoon up about the incident. Though we will say, the video is a bit problematic by primarily featuring black actors in the overweight roles. What’s with that!?

But really, this is another example of the troubles around lax regulation of AirBNB which hopefully will be ironed out soon. The NYPD cleared the apartment, which costs New York City a chunk of change. That’s money that isn’t paid for by AirBNB, because hosts have so far skirted paying hotel taxes. The same is true in San Francisco. 

As we’ve reported previously, New York Attorney General Eric Schneiderman issued a subpoena to Airbnb last October, demanding information on New York City’s 15,000 hosts and 25,000 listings.

So far, San Francisco hasn’t pursued AirBNB with the same zeal. Maybe all we need to do is throw a few AirBNB hosted sex parties. 

SF bans water bottles

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San Francisco continues to lead the way in the nation’s environmental policy, with the Board of Supervisors on March 4 voting unanimously to bar the city from buying plastic water bottles and to ban distribution of plastic water bottles smaller than 21 ounces on city property starting Oct. 1. The ban excludes city marathons and other sporting events.

"We all know with climate change, and the importance of combating climate change, San Francisco has been leading the way to fight for our environment," Board President David Chiu, who authored the legislation, said at the hearing. "That’s why I ask you to support this ordinance to reduce and discourage single-use, single-serving plastic water bottles in San Francisco."

Chiu held up a water bottle at the board meeting, a quarter of the way full with oil, to illustrate how much oil is used in the production and transport of plastic water bottles. He also reminded San Franciscans that the current fad of buying bottled water only started in the 1990s when the bottled water industry mounted a huge ad campaign that got Americans buying bottled water.

Somehow, Chiu noted, "for centuries, everybody managed to stay hydrated." (Francisco Alvarado)

Mass action against Keystone XL

Nine environmental activists were arrested in San Francisco for marching through the financial district and entering One Spear Tower on March 3, the building that houses local offices of the State Department, to express opposition to the proposed Keystone XL pipeline.

A day earlier, a mass protest against the oil pipeline was staged outside the White House in Washington, D.C. Roughly 200 protesters were arrested after using plastic zip ties to lock themselves to the White House fence.

Meanwhile, thousands more have made a vow — at least in the sense of clicking to add their name to a petition — to engage in peaceful civil disobedience if President Barack Obama grants ultimate approval for the oil infrastructure project, which would transport 830,000 barrels of crude oil from Canada to the Gulf Coast.

Nonprofit Credo Action has created an online petition urging people to get ready to respond with peaceful civil disobedience if the pipeline wins final approval. (Rebecca Bowe)

City weighs lawsuit over Airbnb

The San Francisco City Attorney’s Office is finally preparing to take action against the illegal short-term housing rentals facilitated by Airbnb, something we’ve been hearing that the Examiner also reported on March 6 ("SF landlords could face legal fight over rentals on Airbnb, other services"), an action that would address the company’s apparent stall tactics.

Despite a business model that violates a variety of San Francisco laws — most notably zoning, planning, and tenant regulations — and Airbnb’s flagrant flouting of a two-year-old city ruling that it should be collecting and paying the city’s transient occupancy tax (see "Into thin air," Aug. 6), the City has appeared unwilling or unable to enforce its laws or address these issues.

"We’re aware of multiple housing allegations, including some that community leaders have brought to us," City Attorney’s Office spokesperson Matt Dorsey told the Guardian, confirming that the office is considering taking legal action to enforce local laws governing short-term housing rentals but refusing to provide details.

Board of Supervisors President David Chiu took on the problem over a year ago, working with the company and its critics to develop compromise legislation that would legalize and tax the activities of Airbnb and its hosts, but the multi-layered legal and logistical challenges in doing so have so far proven too much for the otherwise effective legislator.

"My staff has held meetings with Planning staff and its enforcement team to discuss enforcement and related challenges. We’ve also been in touch with the City Attorney’s Office on these issues," Chiu told the Guardian, saying he and his staff have recently been focused on other tenants and secondary unit legislation, but they "plan to refocus on our shareable housing efforts soon." (Steven T. Jones)

Blaming pedestrians

ABC7 News Investigative Team’s new "investigative report" on pedestrian safety stirred controversy last week as street safety advocates called out the video for its insensitivity towards pedestrian deaths and lax attitude towards unsafe drivers.

Streetsblog SF and others in San Francisco said the report engaged in "victim blaming."

ABC7’s pedestrian safety coverage comes on the heels of a number of high-profile traffic collision deaths, including that of 6-year-old Sofia Liu, killed on New Year’s Eve. Since then, the Walk First program to create safer streets has garnered more attention, culminating in Mayor Ed Lee’s announcement today to partially fund safety improvements to the city’s most dangerous intersections, to the tune of $17 million — improvements that languished due to funding gaps since the program was announced in April.

But making all the needed improvements though would cost $240 million, according to city estimates, and that funding has yet to be identified. Suffice to say, the traffic enforcement debate still rages in San Francisco, with emphasis on the word ‘rage.’

"We’ve seen ‘blame the pedestrians’ from police and in the media," Leah Shahum, executive director of the San Francisco Bike Coalition, said at a pedestrian safety hearing in January. Police Chief Greg Suhr that night apologized for his officers’ lax enforcement of drivers, and focus on pedestrians, and pledged to change policies to focus on drivers going forward.

It’s too bad ABC 7’s I-Team didn’t get that memo.

"In San Francisco, simply stepping off the curb can be deadly," ABC reporter Dan Noyes narrates in their video report. The word ‘deadly’ is capped off with a Hollywood-style musical flourish, like a horror movie moments before the big scare.

"Pedestrians are making mistakes over and over again," Noyes narrates. The video cuts to pedestrian after pedestrian looking at cell phones, jaywalking, or otherwise engaging in unsafe behavior. It’s fair to say the piece, headlined "I-Team investigates what’s causing pedestrian deaths," places responsibility of pedestrian safety squarely on the shoulders of pedestrians. (Joe Fitzgerald Rodriguez)

High-speed challenges

The California High Speed rail project has been facing resistance that threatens to derail the project. Not only has public support for the $68 billion project wavered in recent years, now the project faces a legal battle that could delay the project before the first rail is laid.

On March 4, Sacramento County Superior Court Judge Michael Kenny ruled that a lawsuit brought on by King County can go to trial. The lawsuit raises questions about the legality of using 2008’s voter-approved Prop 1A funding, $9.95 billion worth of bonds, to upgrade and electrify Caltrain’s tracks and incorporate them into the high speed system.
Another concern was that the proposed high-speed system would not be able to pull through with its promise of a 2 hour 40 minute nonstop ride from downtown San Francisco to Los Angeles’ Union Station if the high speed system had to share tracks with Caltrain.

The lawsuit also threatens to leave San Francisco’s new $4.5 billion Transbay Terminal without its planned underground high speed rail station, which could be disastrous for that project as well.

None of this seems to faze Rod Diridon, executive director of the Mineta Transportation Institute based out of San Jose State University and former founding board member of the California High-Speed Rail Authority Board. He told the Guardian: "I think that [the project] will happen now. I think that our wonderful governor and our legislative leaders are going make it happen now…. If it was delayed it would only be a matter of time before it came back." (Francisco Alvarado)

A radical proposal: Squat Airbnb hosts’ homes to create affordable housing

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When I interviewed attorney Joseph Tobener for the story in our current issue on Airbnb being used to take affordable housing units off of the apartment market, he had a interestingly radical idea for get the attention of this scofflaw company and its political supporters, striking a blow for housing justice in the process.

What if hundreds of people, including many who are now homeless, rented out apartments in San Francisco for a night or two and then simply refused to leave?

Under tenant laws in San Francisco, renters have rights from the very beginning, and legally getting rid of someone who paid for just one night through Airbnb could require a long, difficult, and costly eviction process. Hundreds at once would overwhelm the courts and the deputies who carry out evictions for the Sheriff’s Department.

“That tenancy on day one law to me as a radical seems like a great way to address homelessness,” said Tobener, who got a call for advice from a doctor who sometimes hosts guests through Airbnb and faced that precise problem.

He isn’t the only one, as we at the Guardian learned and reported last summer, when San Francisco Rent Board spokesperson Robert Collins confirmed Tobener’s interpretation of the law and said the agency has already seen several such cases.

As I wrote in “Into Thin Air” on Aug. 6, “Tenants who rent out their apartments for a few days can even lose their rights to reclaim their homes. Collins cited multiple cases where subletters refused to leave and returning tenants had little legal recourse because ‘they would not have a just cause to evict the subtenant because, if they’ve rented the entire unit, they aren’t themselves a resident in the unit.’”

Even in cases where landlords rent out units they own, San Francisco’s 1979 rent control ordinance gives tenants rights to due process from the very beginning, making it difficult to get rid of Airbnb guests who decide to become squatters.

Sure, such a radical response to Airbnb’s impacts on the city may be breaking a few rules and hurting the credit records of those involved — but is that really any worse than the whole host of laws that Airbnb and its customers are violating in San Francisco everyday? It’s at least interesting food for thought. 

UPDATE 2/11: Just to clarify, Tobener isn’t actually advocating or organizing a campaign to squat in Airbnb apartments. This idea was, as I wrote, “food for thought,” something to ponder, a little thought experiment as we try to address Airbnb’s illegal business model and the city’s affordable housing crisis. 

Residents vs. tourists

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steve@sfbg.com

Evictions and displacement have become San Francisco’s top political issues, amplified by protests against tech companies that are helping gentrify the city. Yet Airbnb, which facilitates the conversion of hundreds of San Francisco apartments into de facto hotel rooms, has so far avoided that populist wrath.

Tenants use the online, short-term rentals to help make rent in this increasingly expensive city, a point that the company often emphasizes.

“For thousands of families, Airbnb makes San Francisco more affordable,” Airbnb spokesperson Nick Papas wrote to the Guardian by email, citing a company survey finding that “56 percent of hosts use their Airbnb income to help pay their mortgage or rent.”

But it’s also true that Airbnb allows hundreds of rent-controlled apartments to be removed from the permanent housing market — in violation of local tenant, zoning, tax, and other laws — something that has united tenant, landlord, hotel, and labor groups against it (see “Into thin air,” 8/6/13).

“The problem is Airbnb is so easy and attractive that you can take a unit out from under rent control forever,” San Francisco tenant attorney Joseph Tobener told the Guardian.

“We’re getting 15 calls a week on Airbnb,” he said, describing four categories of complaints: landlords evicting tenants to increase rents through Airbnb, tenants complaining about neighbors using Airbnb, tenants being evicted for getting caught illegally subletting through Airbnb, and Airbnb hosts who can’t get guests to leave (city law gives even short-term residents full tenant rights, except in hotels).

There isn’t good public data on how many units are being taken off the market, but Airbnb generally lists well over 1,000 housing units in San Francisco at any given time, with its smaller competitors (such as Roomorama and VRBO) adding hundreds more.

The San Francisco Rent Board listed 326 no-fault evictions (Ellis Act, owner move-in, capital improvement) in its 2012-13 annual report. That number is almost certain to rise in the 2013-14 report due out in March, and it is compounded by an unknown number of buyouts that pressure tenants to voluntarily leave, all of it creating a displacement crisis that has galvanized the city.

“Isn’t it far more likely that more units are being lost [from the rental market] through Airbnb?” San Francisco Magazine recently quoted a UC Berkeley professor as saying in an article questioning whether Ellis Act evictions are really a “crisis.”

So Airbnb is clearly having a big impact on the city’s affordable housing crisis. Yet Airbnb is largely flying under the political radar in its hometown and ducking questions about its impacts.

“Airbnb has all the statistics we need to assess its impacts on the city’s housing market,” Tobener said. The company refuses to disclose such data. Airbnb’s customers need to consider their impacts to the city’s affordable housing crisis, Tobener added, because “there are social consequences to the decisions we make.”

 

STALLED IN LIMBO

Last year I discovered Airbnb was flouting a ruling that it should be paying the city’s 15 percent transient occupancy tax (“Airbnb isn’t sharing,” 3/19/13), a nearly $2 million per year tax dodge.

Yet Airbnb, which has quickly grown from a small start-up into a company worth nearly $3 billion, has some powerful friends in Mayor Ed Lee and venture capitalist Ron Conway, who invests in both Airbnb and Mayor Lee’s political campaigns and committees.

So the company has stonewalled Guardian inquiries for the last year as it has worked with Board of Supervisors President David Chiu on legislation that tries to bring the company’s business model into compliance with local laws. That hasn’t been easy, as Chiu told us.

“It has been difficult to corral the different stakeholders to get on the same page,” Chiu said. “Airbnb has been like unraveling an onion. The more progress we make, the more issues come up.”

Janan New, executive director of the San Francisco Apartment Association, says it shouldn’t be so hard. “They need to enforce the law. They need to collect the hotel tax. They don’t need new laws,” she told us.

While the city is unlikely to simply follow New’s advice, the displacement issue adds another layer to Airbnb’s onion, one that sources say has become an issue of growing concern within the company, which has finally begun to respond to Guardian inquiries.

Those concerns have also been compounded as Airbnb is now being sued by one of Tobener’s clients, Chris Butler, who says he was evicted from his rent-controlled Russian Hill apartment so the landlord could make more money through Airbnb (see “Airbnb profits prompted SF eviction, ex-tenant says,” SF Chronicle, 1/22/14).

“We strongly support rules that keep people in their homes, and the vast majority of Airbnb hosts are regular people just trying to make ends meet,” Airbnb told the Guardian. “Whatever happened in this case, we certainly do not support unscrupulous landlords who evict long term tenants solely to turn their apartments into short-term rentals, but it is important to note that experts have found such cases to be extremely rare.”

Airbnb didn’t respond to our follow-up questions, but those “expert” findings appear to be a reference to a study the company commissioned late last year from Berkeley-based Rosen Consulting Group entitled “Short-Term Rentals and Impact on Apartment Market.”

But that study of Airbnb’s impact to rental housing in San Francisco doesn’t really draw the conclusions that company seems to think and hope it does.

 

MISLEADING NUMBERS

One number that the study and Airbnb have repeatedly sought to highlight is the claim that “90 percent of Airbnb hosts in San Francisco use Airbnb to occasionally rent out only the home in which they live,” as the company put it to us.

“Airbnb users generally do not identify themselves as utilizing short-term rentals as a business. In fact, 90 percent of Airbnb hosts [in San Francisco] indicated that they live in the home listed on Airbnb,” was how the study put it.

“It’s trash. They pick and choose the data they want to share,” Tobener said of the study and the 90 percent figure, which he says was derived from a 2011 user survey before the local housing market exploded. Rosner Consulting told us it stands by the study but won’t discuss it.

The figure also lumped in those with multiple rooms in their homes that have traditionally been rented by local residents and covered by rent-control laws. It also discloses that 10 percent of Airbnb hosts are renting out outside units simply as a business, a figure that has likely risen over the last three years.

The study does disclose that there were 1,576 properties booked through the company in August 2012, which the study notes was just 0.4 percent of the 378,000 homes in San Francisco, which Airbnb uses to dismiss its impacts on the market.

But the study includes only macroeconomic data, rather than looking at the company’s impact on certain socioeconomic groups — such as those making 120 percent or less of median area income, the people being evicted from and priced out of the city — or the supply of rent-controlled housing.

“The average gross income per Airbnb property in the previous 12 months was $6,722, or an average of $564 per month,” the study discloses, choosing to use average rather than median figures even though they’re considered less accurate gauges of income and housing data.

Customers who only use Airbnb once or twice will skew those averages way down. Yet the study then compares that number to the “average market-rate apartment rent in San Francisco, which was $2,498 per month in mid-2013. The average income generated is insufficient to cover monthly rental expenses in full.”

Which tells us nothing about how Airbnb is impacting either rent-controlled housing or the median income San Franciscans who rely on it. According to the US Census Bureau, the median rent in San Francisco was $1,463 in 2012 and 64 percent of San Franciscans rent their homes.

“The study is bullshit,” Tobener said. “They could pull data and tell us how many people are renting full units on Airbnb, but they don’t.”

Yet the company claims that it is concerned about these issues and working with the city.

“We believe our community of hosts should pay applicable taxes and we are eager to discuss how this might be made possible. We’ve reached out to officials in San Francisco and we continue to have productive discussions with city leaders,” Airbnb told the Guardian. “These issues aren’t always easy, but if we work together, we can craft fair, responsible, clear rules that ensure San Francisco continues to benefit from home-sharing.”

Yet neither Airbnb nor its political supporters seem to want to have this public discussion. The company has stopped responding to our inquiries, again, and when we asked the Mayor’s Office about Airbnb’s impacts to the affordable housing market, we got this response and a refusal to directly answer either the original or follow-up questions: “The Mayor has prioritized preserving, stabilizing and growing the City’s housing stock. His policy priorities include protecting residents from eviction and displacement, including Ellis Act reform and stabilizing and protecting at-risk rent-controlled units, through rehabilitation loans and a new program to permanently stabilize rent conditions in at-risk units.”

Yet Airbnb continues to have an impact on those “at-risk rent-controlled units” that few people seem to want to discuss.

Local journalists starting to catch onto Airbnb’s subversion of SF’s rental market

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Airbnb and other so-called “shared housing” sites allow hundreds of rent-controlled apartments in San Francisco to be essentially removed from the housing market, part of a concern that has caught populist fire recently with protesters and politicians pledging to do something about evictions and displacement.

Yet I’ve been one of the few local journalists to hound Airbnb over its illegal business model and refusal to pay nearly $2 million per year in transient occupancy taxes that it owes the city. But that may be beginning to change, as pair of mainstream local publications in the last week have cautiously waded into what outside journalists from Time magazine (which specifically mentioned my reporting on the issue) to German public television have already seen as a big and important issue.

The San Francisco Chronicle today has a story about a lawsuit from a tenant subjected to an owner-move-in eviction, with said owners then turning around to rent units in the building out through Airbnb. And San Francisco Magazine also mentioned Airbnb in its controversial article criticizing concerns over evictions.

“Isn’t it far more likely that more units are being lost [from the rental market] through Airbnb?” the magazine quoted a UC Berkeley professor as saying, comparing Airbnb to Ellis Act evictions. Hey, SF Mag, don’t you think that’s a good question that might be worth exploring?

Janan New, executive director of the San Francisco Apartment Association, told me this week that she found 1,100 rent-controlled San Francisco apartments listed on Airbnb — almost all of it in violation of local tenant and zoning laws — a fact that she personally conveyed to Mayor Ed Lee, who supports Airbnb, shares a funding source with the company (venture capitalist Ron Conway), and has been dismissive of the issue.

“They need to enforce the law like they do in New York City,” New told us, referring to a city that has cracked down on Airbnb’s subversion of its rent control laws. She’s lobbied City Hall, documented the problem, and threatened to sue the city: “I’ve done everything I can possibly think of.”

Meanwhile, Board of Supervisors President David Chiu has been negotiating with Airbnb for almost a year on legislation that would attempt to legalize and regulate its activities here in San Francisco, telling us “it has been difficult to corral the different stakeholders to get on the same page” and no longer offering any predictions when it might be complete.

I was already working on a story about Airbnb (which still won’t respond to my inquiries) for our next issue [UPDATE: It looks like I’ll hold that story for our Feb. 5 issue], so I’ll have more to say about this then. And in the meantime, here’s my latest message to the Mayor’s Office of Communications trying to get some kind of response to this issue, which it has ignored for the last 24 hours:

“I’m about to write about the rampant illegal behavior by Airbnb customers again, which seems increasingly relevant to the “affordability agenda” that Mayor Lee is touting, so I wanted to check in to see whether the mayor is still offering his unqualified support to this company, despite its violations of local housing, zoning, and planning laws and refusal to collect and pay the transient occupancy tax.

“Janan New with the SF Apartment Association says she’s raised this directly with Mayor Lee, including informing him recently that more than 1,100 rent-controlled apartments in San Francisco are listed on Airbnb, all in violation of local law, and she’s frustrated that he’s unwilling to enforce the law, as New York City has been doing. Meanwhile, the Airbnb legislation that David Chiu has been working on for the last year is hopelessly stalled, at least partly because Airbnb has the mayor’s support and is unwilling to compromise while it’s making some much profits off of its illegal behavior in San Francisco.   

“A recent San Francisco Magazine article (http://www.modernluxury.com/san-francisco/story/the-eviction-crisis-wasnt) even quotes a UC Berkeley professor saying that Airbnb is likely taking more rent-controlled units off the market than the Ellis Act. Considering the mayor is pursuing Ellis Act reform, why does he continue to ignore the impact that Airbnb is having on the city?”