S.F. cracks down on Airbnb rentals

Further, from the article:

"San Francisco bans all residential rentals of less than 30 days unless the hosts have a conditional use permit - an expensive and cumbersome process that virtually everyone ignores. The ban applies whether the hosts own or rent, paying guests visit frequently or once a year, or hosts rent out a room or an entire dwelling."

So at least in SF - anyone using AirBNB at all is breaking the law, irrespective of one's lease or ownership status.

Their entire business model, in fact, depends on it. Welcome to the "sharing economy", that is, the economy of ignoring the laws regarding what it is you're trying to do

The real victims here are the neighbors and in the case of subletters, the landlords. No one gets upset when the triggerman goes to jail, even if they also wish the Don would go too.

"Well aware"... understatement.

Um, AirBnB is effectively illegal everywhere. The number of places it is legal dwarfs the number of places it is illegal.

Of course, if AirBnB decided to operate in places like Vandergrift, PA, people would welcome them (renting a hotel there is normally easy, but becomes a nightmare at times like high-school graduation because of almost no supply) as a way to cushion event-based scarcity.

Like Uber, these companies don't want to operate in the suburbs where people would welcome and defend them. They want to operate in the cities, show hypergrowth, and cash out for billions.

No sympathy for all parties.

Then, he will almost certainly come out in favor.

    Good to see Krugman actually got something right

The problems are twofold: geography, and the fact that SF doesn't operate in a vacuum. Geographically, there's water on 3 sides and hills on the 4th. No matter what you do SF is always going to engaged in an uphill fight against density because it's almost as much of an island as Manhattan is. The vacuum is the bigger problem. Even if the mayor and board of supervisors agreed to abolish the planning commission tomorrow and hand out permits to any proposal compliant with building safety codes, it would not do much to accelerate building.

Why? Because neighbors would sue under CEQA, the California Environmental Quality Act. This allows virtually anyone to file a suit alleging that a negative impact on the environment or an insufficiency in the preparation of an environmental impact report, anywhere in CA. This is not just 'the environment' in terms of wild salmon or old-growth forest, though - it includes everything from air quality to aesthetics. I'm expecting to be invited to join a suit on this because I live close to a hospital which is planning a large expansion, and the neighbors a few blocks away are furious about the likely change in traffic patterns and noise during the construction phase, which will last a few years. I don't actually care about this, but on the other hand I have misgivings about the proposed siting of a helipad right across the street from me.

And this leads to the observation that while CEQA has become a go-to example of obstructive red tape/environmentalism gone mad in California, it's actually just a culmination of much longer-standing legal traditions benefiting property owners. Any place that you have sufficient density for people and businesses to annoy each other, property owners end up in court with disputes about who should give way to whom. Grumble as one might about property taxes, nobody wants the value of their property to go down, either on paper in the more abstract sense of having less enjoyment due to (say) a reduction in the pleasantness of one's view or the amount of sunlight one's garden receives (which factors ultimately affect the $ value of their property anyway). If you have paid $$$ to buy a fancy loft with an amazing view of the SF skyline, you and your neighbors are going to be most unhappy if some developer proposes erecting a skyscraper and replacing your view with that of a concrete wall 30 feet away. In a more general context, people are much less enthusiastic about paying property taxes for parks and schools if the erection of tall buildings blocks sunlight from ever reaching them (and that particular complaint is a frequent one in SF, where the hilly geography tends to exacerbate the issue).

The complaints of property owners carry a great deal of weight in arguments over planning, since they provide a large part of the current tax base (vs the hypothetical future tax revenue of any given development) and angry taxpayers are highly likely to vote out officials who don't do their bidding and vote in those who are willing to pass laws restricting the use or development of property. Indeed, annoyed property owners have historically not just objected to new development but have often successfully argued for a halt to existing land use which impacts their enjoyment of property: in a famous English legal case, Sturges v. Bridgeman (1879), a doctor bought a house in a nice neighborhood and then successfully sued a nearby candy-maker, who had been there for years, over the noise of the candy-making. The court reasoned that while the candy maker had indeed been there first, the business was much noiiser than anything else in the neighborhood and it was only a matter of time before someone brought it up, regardless of the fact that the doctor had 'come to the nuisance.' That seems wacky, but think about it in the context of a city like SF that used to have a lot more light industry inside the city borders. If you know the city well at street level, I'm sure you've come across places where there's a bunch of shiny new apartments and hip restaurants, stores etc., except for that one wierd lot with a run down small manufactory/liquor store whatever, that either doesn't fit with the neighborhood any mroe or whose customers have gone away due to changes in traffic patterns. The business situated there makes less and less money, the owners maintain it less and less well, and eventually someone launches a blight lawsuit in an attempt to force the current occupant out.

The practical upshot of this for development is that a developer has to take into account the loss-of-value that a project will impose upon neighboring property as a potential development cost, and a wise developer will secure their agreement by offering to pay that cost to the neighbors up front, because otherwise they'll probably just end up paying the same amount in damages later (unless they gamble on winning an arms race of legal transaction costs, which is much more viable in rural than urban areas).

After all, heaven forbid we allow property owners to have control over their own property at any time.

For a company that is based on trust (https://www.airbnb.com/trust) I expect more from them than the lowly behavior we're used to see from other well known corporations that don't care.

It seems that technology and culture have moved faster than law (shocking, I know) and that laws that might have been a good idea in one set of circumstances aren't anymore.

Additionally, how is renting out a "rent controlled" place at market rates not transferring income from the actual landlord, to the lessee, while defeating the "control" at the same time?

Let's say everyone in San Francisco rents out their apartment for $200 once a month. Now landlords can raise the rent by $200, since people could afford the rent before, but are now making an extra $200 a month. Meanwhile, you, the person that doesn't illegally rent out their apartment, has to compete for apartments with people that can pay more because they break the law.

That's where the angst is coming from.

Naturally the reality is vastly more complicated but I believe that's the basic reasoning behind the "short term rentals drive prices up" line of thought.

Whereas if the person can't profit from it and doesn't need it, they may simply downsize, allowing another renter who does need it to move into the unit and use all the bedrooms, giving a much higher load factor.

Not saying it's necessarily a good idea, but banning short term rentals can help increase the utilization, and thus the availability, of existing housing resources.

There is no rule out there that says that landlords have a right to their business model on their terms. I'm aware of several units in this city where the landlord grew up in a unit their parents purchased way back in the day, who then moved out of the city to the suburbs. They now profit handsomely because they self select for tenants that are likely to move out of the city or outgrow a unit.

> IANAL, but my understanding is that HOAs in California can't put a lien on your property for failing to pay fines, only for failing to pay dues.

Yes, however, most HOAs do have ways to make it difficult for homeowners who have become delinquent on fines. One common approach is that the CC&Rs allow a delinquent homeowner to be placed as "a member NOT in good standing", which means that the owner will be precluded from using the association amenities (pool, clubhouse, tennis court, etc.) or even being able to vote for board members, until the fine is paid off and the "good standing" is restored.

> Furthermore overly punitive fines aren't allowed, and that rule does in fact have teeth (and is also abused by homeowners to make it more expensive to collect fines from them).

Not only that, but the Davis-Sterling Act (which is the California state laws that govern common interest developments) as well as most of the local courts in California are very much sided towards the homeowner and against the overall community. Much of the Davis-Sterling Act was written and approved at a time when there was a lot of concern that large community developments would do things to abuse and harm the individual homeowner, or more specifically, that the will of the majority (within a CID) would do things to make life as difficult as possible for those in the minority. Davis-Sterling (and the many of subsequent court cases that dealt with Davis-Sterling) was basically set up to help prevent that as much as possible, unfortunately sometimes to the detriment of well-meaning HOA Boards that are dealing with a delinquent homeowner that understands these loopholes and uses them to willingly violate rules, or skirt out of paying fines, etc.

You said the HOA doesn't own anything, actually they do "literally own" a portion of the thing that people pay for when buying a house. The right to deny use of your property for subletting (like airbnb). And if you don't comply, the policemen hit you with sticks until you do.

You said the HOA doesn't own anything, they own you, the human unit living in the home via dues. They also own a guarantee of income to whatever human unit lives in that house, that is a higher quality item to own than having ownership of say a cat or car. and the fact that your home serves as security for whatever liabilities the HOA corp board chooses to incur, HOA-burdened property represents a liability rather than an asset. It's a secondary level of government that resembles a banana republic.

There is also a continuing misperception that HOA corporations are miniature democracies. They are not. They have none of the protections for individual rights. So what if 50% of the neighbors don't like something. Majority rule might be fine for setting pool hours for the HOA corp's pool, but majority rule is not a democracy and it is not appropriate for what happens between the bedroom walls of "your" or more specifically "their" home.

The disputes that develop over the propriety and interpretation of restrictions is another cesspool. If there were no HOA corp, the disputes would tend to simply be differences of opinion. Natural barriers to litigation include the cost of litigation and the uncertainty of the outcome. However, the board members of an HOA corp bear no personal responsibility for financing litigation and are driven as much to harm fellow residents as they are to win. If they can cost a homeowner $20,000 and up, then their egos are satiated even if their HOA corp loses. The management companies profit from accusations of violations. The HOA attorney is likewise more concerned about provoking and maintaining the dispute for profit.

Which is why HOA's lower property values significantly by lowering the pool of available buyers.

* The medallion system gives owners something significant to lose it they become scofflaws, and while we all have horror stories about cab drivers, anyone who's traveled to Asia (or, for that matter, Italy) knows that we have relatively well-behaved drivers, even in the cohorts selected for worst incentives.

* The taxi companies are required to comply with rules that make taxis part of the fabric of transportation for the whole city (for instance, they're usually required to serve every destination within the city). Uber does not need to comply with these rules, and thus threatens not just cab companies but the transportation system as a whole.

I would imagine that each landlord and each homeowner's association could come to their own agreements on what is and is not acceptable without the need for laws on the books.

In some cases the distinction may be subtle; in this case, not really.

"get while the gettin's good" sort of thing.

I don't think I've ever seen a hotel night, outside of a hostel, for $12.

(And I'm not trying to say it is a bad business at all — non-customer-acqusition costs probably go down by a larger % than revenue.)