AirBnB Goes to War Against San Diego to Kill Rental Regulations

AirbnbInfuriated over San Diego’s strict new short-term rental regulations, Airbnb and HomeAway have launched a referendum effort in hopes of overturning legislation it has characterized as a ban.

Signature gatherers have already started circulating petitions, which ask that the San Diego City Council either repeal the new regulations, which do not go into effect until next July, or place the matter before the voters. The referendum effort is being funded by the Committee to Expand the Middle Class, supported by Airbnb, which so far has contributed $100,000 to the campaign group.

The referendum is a joint effort by the online home sharing platforms Airbnb, HomeAway, and Share San Diego, a coalition of short-term rental hosts and vacation rental management companies. In a call Tuesday with members of the press, the coalition discussed its plan to fight back against the council’s action last Wednesday to significantly rein in the proliferation of short-term rentals citywide.

That fight could also include legal challenges, although representatives said their current focus is on the referendum effort. …

Click here to read the full article from the San Diego Union-Tribune

San Francisco’s Absurd Resistance to Change

San Francisco, CA, USAIt’s natural to be unsettled by change, but residents of San Francisco take resistance to change to absurd levels. In 1958, Gavin Elster — the shipping magnate played by Tom Helmore in Alfred Hitchcock’s Vertigo — expressed San Francisco’s deeply engrained ambivalence to change well: “The things that spell San Francisco to me are disappearing fast.” A recent letter to the editor in the San Francisco Chronicle shared the typical modern lament: “Has San Francisco’s economic growth truly made it a more interesting place to live? Or just a place with more shiny but soulless places to spend money?”

Every day, similar hyperbole appears in the press, in social media, and in conversations: San Francisco is becoming a “hollow city” catering to highly paid tech workers. Most job growth has been in the Silicon Valley suburbs an hour or so south, and the “Google buses” ferrying young professionals up and down the peninsula have become symbols of an invasion. Contemporary San Franciscans resent them the way earlier locals resented the influx of Chinese in the 1870s and the gays and lesbians in the 1970s. This time around, it’s the young and well-paid newcomers who threaten the status quo, not the poor or marginalized. We hear that these people aren’t like us, they don’t share our values, and they should go back where they came from.

Paradoxically, in a city famed for new ideas, resistance to change is a cherished San Francisco value. The city’s population is less than one tenth that of New York, yet the San Francisco planning department processes three times more applications than Gotham’s planning commission. That’s because public review — with generous opportunities to appeal — is a cherished sport here. For example, any exterior building alteration to a structure more than 50 years old requires historic review by the city — a process that can easily take a year. Environmental review of a proposal to install bicycle lanes took three years. When a proposal for a cluster of office and residential towers downtown—without any residential displacement and with 40 percent of the housing to be permanently affordable — came before the planning commission recently, protesters chanting “genocide” shut the hearing down.

San Franciscans have easy access to the ballot by petition. In November, residents voted on five initiatives addressing the changing city, including Airbnb regulation, protections for “legacy” shops, and an 18-month shut down of private housing development in the Mission District. This love of process over action shows just how intractable the city’s growing pains are. The city’s political leaders have few real solutions to San Francisco’s real problems, so instead we San Franciscans lash out at symbols: tech workers and the buses that take them to their jobs; chain stores; and fancy new restaurants. By these lights, New York seems more comfortable as a city of ambition. The idea of San Francisco as a place that attracts young people interested in working hard and making money is fairly new. Even in the Gold Rush days, one sought one’s fortune scattered by a streambed, not in the city. In San Francisco, hustle is unbecoming.

New York and San Francisco are both paying the price of gentrification and revival. People get pushed out, or crowded, or have long commutes. But the two cities are different in key ways. In San Francisco, if you want a walkable neighborhood with cafes and bakeries and the amenities that Jane Jacobs championed, you have few choices. San Francisco doesn’t have the equivalent of a Cobble Hill, a Jackson Heights, or a Hoboken, and lacks the reliable, regional public transit system that would make longer commutes bearable. The San Francisco Metro and the regional BART system combined have just 104 miles of track. New York’s subways run 842 miles, not to mention the PATH system, Metro North, New Jersey Transit, and Long Island Railroad that funnel workers into and out of the central city. While San Francisco is a cultural and economic heavyweight, it’s a relatively small city: 850,000 residents within 49 square miles, with water on three sides. Here, the shifts seem tectonic. They feel like an earthquake.

Plenty of solutions for San Francisco’s planning gridlock spring to mind. The challenges are not technical; they are merely a matter of political will. Most development projects should go forward if they comply with planning codes. The arduous, costly, and risky review and appeals processes should be streamlined. The California Environmental Quality Act should be amended so that it encourages smart growth rather than sprawl. Small infill projects should be exempted. But I’m not holding my breath for any of this. What is needed is a radical change in the local culture. San Francisco needs to learn to embrace change without fear and give up its love affair with process.

San Francisco Voters Fend Off Attack on Airbnb

n 1979, the Pacific Research Institute opened its doors in San Francisco. Jimmy Carter was President; Diane Feinstein was mayor; and Brian Chesky, the founder of home-sharing platform Airbnb, was still two years away from being born.

San Francisco voters this month gave Chesky and Airbnb a win, defeating Proposition F by a vote of 45 percent to 55 percent.

Airbnb didn’t put Proposition F on the ballot; the idea was the brainchild of a group called Share Better SF and was largely funded by hotel and service industry unions.

San Francisco Supervisors had already worked out a compromise plan with Airbnb and similar home-sharing services. That compromise limited the number of days units could be rented, and allowed the city to collect taxes owed. But Prop. F went further. The Los Angeles Times’ editorial on the measure stated Prop. F “would have required hosts to divulge sensitive information, exposed them to a minefield of bureaucratic requirements and allowed neighbors to sue hosts whom the city had found to be in compliance.”

Forbes magazine noted “Airbnb clearly understands Prop. F [was] a threat to their business, possibly even to their business model.” No wonder the company spent more than $8 million to explain the initiative’s serious flaws.

The centerpiece of the Prop. F campaign was the assertion that home-sharing by Airbnb and other similar companies had wreaked $1 billion in economic harm upon the people of San Francisco.

Their math is as follows: According to City’s Office of Economic Analysis, removing a 2 bedroom unit from the local housing stock imposes costs between $250,000 and $300,000 per year on the city economy.

Proponents simply multiplied this number by the roughly 4,500 Airbnb listings in the city – and voila.

Except the number is absolute nonsense.

First, it assumes every Airbnb listing would otherwise be a long-term rental unit and has been permanently removed from the renal market. That assumption is without any factual basis. In fact, Airbnb has stated that only 10 percent of hosts rent out a space where they do not live.

And second, it ignores the impacts other policies have had on the supply of rental housing in San Francisco.

Last year, KALW public radio reported on the high number of apartments taken off the housing market completely – up to 10,000 – because of rent control and other policies that pose significant financial risks to small time property owners.

Senator Diane Feinstein supported Prop. F, saying Airbnb encourages “property owners and renters to vacate their units and rent them out to hotel users, further increasing the cost of living.” But the former mayor has it wrong.

San Francisco struggled with housing prices long before Airbnb launched in 2008. During the 1990s, the city’s population grew by over 50,000 people while only 16,000 new housing units were added to the housing stock.

Dale Carlson leader of the Share Better SF campaign, pledged to launch more expensive campaigns across the nation, saying “Airbnb isn’t going to be looking at spending $10 million if it has to fend off these ballot measures in eight, nine, 10 cities at a time.”

Rather than export bad ideas to other municipalities, perhaps these activists could reevaluate housing policies that restrict the supply of new housing to keep up with rising demand.

Sally Pipes is the President and CEO of the Pacific Research Institute.

“Sharing” Economy Puts Democrats Between a Rock and a Hard Place


It sounds so simple, but as an economic trend, sharing is a divisive issue for Democrats.

Tension over the so-called “sharing economy” has been on full display in Sacramento, with Democrats who control the Legislature facing mounting pressure. On one side are trendy tech ventures that are gearing up their political lobbies. On the other: Democrats’ traditional allies in organized labor, who remain highly influential.

California-based companies that allow people to make money by “sharing” their homes and cars have hit the mainstream. Uber, the smartphone-based ride-hailing service, operates in 300 cities globally. And Airbnb, a website that allows homeowners to rent a room to vacationers, now has 55 million users around the world.

The expansion has sparked predictable pushback from the traditional providers of rides and rooms: the taxi and hotel industries. Now union leaders are trying to convince Democrats that the trend in economic “sharing” represents a fundamental shift that will harm workers.

“Is this the future of our economy, where you have no security of getting a regular paycheck, no security… if something happened to you on the job?” said Angie Wei, a lobbyist for the California Labor Federation.

Her group represents several unions, including those for hotel workers and cab drivers. These old-school industries have longtime ties to many Democrats in the Legislature today. Taxi companies, for example, routinely give political donations in local races, leading to relationships with politicians who advance from city councils to seats in Sacramento. Hotel worker unions are big donors in legislative races, with one group spending $1.2 million in California during the last election cycle.

uberDespite the clout, Wei worries “we’re losing on this issue. … Uber has romanced legislators [into thinking] that they are a new, innovative company and that if you oppose Uber or their model, you’re opposing innovation.”

The Internet-based companies are relative newcomers when it comes to political influence in Sacramento. But they’re showing they can play the game:

  • Ride-sharing company Lyft began making political contributions in California last year, including $15,000 to Gov. Jerry Brown’s ballot measure committee and $4,100 to Senate President pro Tem Kevin de León, D-Los Angeles. Uber spent nearly $200,000 on lobbyists in Sacramento so far this year – more than Walmart and Bank of America, as the Los Angeles Times has noted.
  • Airbnb recently hired Chris Lehane, a well-known Democratic political consultant who worked in the Clinton White House. The company also retained its first Sacramento lobbyist this year.
  • A national trade group called the Internet Association opened a Sacramento office for the first time last year. It has hosted numerous events for California lawmakers, including a $16,000 reception at the state Democratic convention in Anaheim last spring.

Robert Callahan, the association’s lobbyist, said lawmakers’ familiarity with internet-based brands has helped the new industry break in.

“Legislators are waking up and searching Twitter and going on Instagram and posting on Facebook and sending Gmail. They have a personal attachment with our companies,” he said. “That helps us when we go in and say, ‘We have an issue we think you should resolve.’”

A recent example was a bill that would allow state employees to be reimbursed for using companies like Uber and Airbnb when they travel for work. The bill sparked a heated debate between Democrats on the Senate floor last week.

“Why does this industry deserve a special status?” said Sen. Ben Hueso, D-San Diego, who worked in his brothers’ taxi business for 15 years before he was elected. “Why do they deserve protection from the Legislature?”

The bill, AB229, is now on the governor’s desk after it passed the Senate with the support of all Republicans and less than half of the Democrats.

The new companies don’t always get their way, though. Two bills backed by Uber stalled in the Senate committee chaired by Hueso. His spokeswoman said he plans to hold a hearing this fall to deal with ride-sharing issues more comprehensively.

On the home-sharing front, Airbnb fought back legislation that sought to make it easier for cities to collect taxes on vacation rentals made through web-based services.

Sen. Mike McGuire, D-Healdsburg, the bill’s author, said the trend has been a burden on his wine country community, with wild parties and public drunkenness reported at houses booked through the sites. Still, the measure stalled in a committee. McGuire said he will try again next year.

Airbnb’s vast user network is an obstacle he’ll have to confront. Lehane said its customers flooded the statehouse this spring with more than 769,000 emails asking lawmakers to reject McGuire’s bill.

“When people find out about issues, they really mobilize,” Lehane said. “This is a company that is, at some level, redefining capitalism.”

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