Startup Said To Be Keeping 15% Of Vacant Rental Properties Unlisted
A new report from the City and County of San Francisco suggests rental service Airbnb has grown in popularity to the point that 15% of vacant rental properties in the area are being listed on Airbnb as short-term vacation rentals rather than being listed on the market as longer-term housing options. The analysis found that “between 925 and 1,960 units citywide have been removed from the housing market because of Airbnb listings.” This is “a significant proportion of its 8,438 vacant units” in the city, though it remains just a tiny portion of the total 244,012 units of housing the area had available as of 2013.
The study, done by the independent budget and legislative analyst’s office, comes after Board Supervisor David Campos requested it. He has proposed legislation that would limit any hosted or un-hosted short-term rentals, including ones through Airbnb, to 90 days annually. Campos said the report indicated Airbnb is a “significant contributor to the housing shortage” that has made the city less affordable for middle and lower-income residents. For its part, Airbnb is arguing that homeowners or renters looking to make extra money to pay for housing are benefitting from the extra income Airbnb hosting provides. In a statement Airbnb spokesperson Christopher Nulty argued, “Home sharing is an economic lifeline for thousands of San Franciscans who depend on the extra income to stay in their homes. Supervisor Campos’ proposal would make it even harder for middle class families to stay in San Francisco and pay the bills.”
Though the report provides no suggested steps for regulating shared housing sites like Airbnb, the City and County Board of Supervisors’ Land Use and Economic Development Committee is expected vote this week on possible amendments to legislation that made Airbnb rentals legal in city and county limits. That legislation has only been in effect since Feb. 1. Right now, Airbnb listers can only rent their properties for 90 days annually when not present, but can do so an unlimited number of days when they are on site. The city and county Planning Commission has proposed changing this to 120 days for any type of stay, while Campos wants a 60-day annual cap on stays. A proposed measure on short-term rentals for November’s ballot includes a 75-day cap.
What Happens Next
Current legislation means that for the forseeable future, Airbnb and similar short-term housing rentals will be legal in the San Francisco area. However, there are measures being proposed by city regulators that could be implemented in the next few months, and a proposed November ballot initiative. This suggests that by 2016 there could be changes to the way such sites are allowed to do business in the area. Until then, the real estate market in San Francisco will continue to experience uncertainty due to a tightening rental supply.
What This Means For Small Businesses
Business owners face many decisions when exploring options for where to locate their businesses. Though this report examines Airbnb’s effects on housing, not commercial, rentals, a tightened housing market means higher real estate costs across the board. Therefore, services like Airbnb may be disrupting real estate as a whole, affecting small businesses as they seek affordable locations for their headquarters and livable cities for their workers.
Additional Reading
Yahoo! Finance, TIME, NPR, the San Francisco Chronicle, and the San Francisco Examiner cover the report.
