This new bill might cripple home sharing in San Francisco

(San Francisco)

Last week, San Francisco Board of Supervisors passed a bill requiring home-sharing services to remove listings for units that are not registered with the city's Office for Short-Term Rentals.

Services such as Airbnb and HomeAway are the target of the bill, which allows the city to fine these companies up to $1,000 per day per listing. Financial services firm Canaccord Genuity said in a report that it expects the threat of these fines to result in a "near-term reduction to Airbnb listings" by close to 80 percent, scaling back to a 50-percent reduction in the future.

The American Hotel & Lodging Association has been on Airbnb's case as of late, checking in with hotel owners and operators in the country's largest cities and seeing how home-sharing operators have affected them. While the direct effects have yet to be fully quantified, the AH&LA's study recently found that nearly 62 percent of the home-sharing operators listed in Miami list multiple units for rent, accounting for more than $76 million of Airbnb's revenue in the city.

San Francisco

These are not insignificant numbers: The report from Canaccord Genuity found that less than 20 percent of all home-sharing listings in San Francisco were registered. On top of this, a report from Penn State University found that 54 percent of all San Francisco-area Airbnb revenues are a result of hosts violating registration requirements, making it ineligible for registration. For the record, here are the requirements for registration in the city:

  • Hosts can only register one property
  • That property must be their primary residence
  • 90 day/year limit on the number of days guests can stay in a home when the resident host is away

The hospitality industry is slowly chipping away at the legality of the home-sharing model, particularly for operators renting out multiple rooms. The Canaccord Genuity report suggests that other cities are likely to follow San Francisco's example in fighting illegal hotels, mostly because of lost tax revenue. But without prolific home-sharing options, will these travelers turn to hotels? We can watch San Francisco to find out.