Airbnb-limiting law defeated in San Francisco. A victory for the middle class?

Airbnb tested its political muscle and gained a victory in San Francisco. The company is praising the triumph as a middle class victory, but critics of the home-sharing company accuse it of exacerbating the city's high rental prices. 

Eric Risberg/AP/File
In this photo taken Thursday, Oct. 29, 2015, is a billboard opposing ballot measure F that would place restrictions on short term rentals in San Francisco. San Francisco voters will decide Tuesday whether to restrict Airbnb operations in the city, impose a freeze on luxury housing in the Mission and approve a $310 million bond for affordable housing.

Airbnb, the home-sharing startup, hit a coming-of-age milestone this week: a political victory against regulation.

Tuesday, San Francisco residents voted against Proposition F, a city bill that would have restricted Airbnb and short-term renting. The proposition was defeated with a 10 percent gap – 55 percent opposed to 45 percent in favor, according to the unofficial results from the San Francisco Department of Elections.

"Tonight, in a decisive victory for the middle class, voters stood up for working families’ right to share their homes and opposed an extreme, hotel industry-backed measure," Airbnb said in a statement on its website

Proposition F sought to place greater restrictions on who could rent out their homes to vacationers and greater liability on Airbnb to enforce the rules. The bill would have allowed the city of San Francisco to fine the startup and other home-sharing platforms for listing rentals that are not registered with the city and opened up home-sharing platforms to legal action by neighbors.

Additionally, home-sharing hosts would have been required to submit quarterly reports about rentals and inform all neighbors by mail of their intent to rent. Hosts would only  would have been allowed to rent out space for 75 days a year, down from the current 90 permitted. For Airbnb, a platform that thrives as an easy way to earn extra money, the added bureaucracy could have dealt major damage.

In response, Airbnb, which is valued at over $25 billion, leveraged some of its considerable financial muscle ($8 million) to form an effective opposition. The campaign to defeat the ballot measure included 400 workers going door to door across the city, mailers, TV spots, and ads. The result was the defeat of a proposition that could have acted as a blueprint for other cities trying to regulate home-sharing.

Despite Airbnb’s portrayal of the political triumph as a middle-class victory, the issue of home-sharing remains a sensitive issue in San Francisco and abroad.

"Voters in liberal San Francisco are in the midst of a meltdown over Airbnb, with opponents pointing fingers at the company for adding fuel to the city's already sky-high rents," Aimee Picchi, of CBS MoneyWatch, writes.

San Francisco is in the midst of a housing crisis. According to data from Rent Jungle, the average monthly rent for an apartment within 10 miles of the city center was $3,512 - a 95 percent increase since 2009. As lower and middle class families are increasingly being pushed out of the city, they are turning against anything that might be exasperating the already-high rent. Proposition F argued that home-sharing platforms like Airbnb do exactly that. 

“An increasing number of existing apartments, condominiums and houses are being illegally offered and advertised as short-term rentals,” the preamble to Proposition F reads.  “These hotel uses contribute to the disappearance of affordable housing.”

In 2013, Berlin officials made similar arguments. The German capital passed legislation requiring residents who want to rent out flats to get special permits or be subject to fines and penalties. Between October 2012 and October 2013, around the time the legislation was passed, Berlin rent prices increased 8.3 percent, according to real estate website ImmobilienScout24.

In San Francisco and Berlin, Airbnb acknowledged affordability as a legitimate concern, but argued that Airbnb was not the cause.

“San Francisco has experienced affordability issues for decades and our community wants to be part of the solution,” Airbnb wrote in a statement.

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