Although renters and travelers have been using Airbnb in San Francisco for more than six years, the start-up moved closer toward legitimacy in the city where the company was founded.
The city's board of supervisors on Tuesday approved the "Airbnb law." The legislation now needs a signature from Mayor Ed Lee, who has 10 days to sign, and the law would take effect in February 2015.
The legislation will allow property owners to legally offer their homes as short-term rentals. The growing online Airbnb community has been a boon for travelers, seeking affordable options, and disrupted the hotel and travel industry. Those currently renting properties using Airbnb technically are breaking local rules.
One of the biggest changes after the law's passage will be taxes—and a new source of revenue for the city.
Airbnb will be subject to hotel taxes, which are at 14.5 percent in the city, according to Board of Supervisors President David Chiu. He estimates San Francisco will bring in between $12 million and $15 million in the first year, thanks to the city's 14.5 percent hotel tax.
The new regulations also will require Airbnb, and other home-sharing hosts, only offer short-term rentals of no more than 90 days. The legislation will also include the creation of a city registry for those renting out their homes. Renters also will get $500,000 in liability insurance per listing.
After two years of tweaks, Chiu of the board of supervisors said he's happy with the outcome of the legislation he spearheaded. This despite critics who say it will only worsen the affordable housing crisis San Francisco faces.
In an op-ed to the San Francisco Chronicle, Sen. Dianne Feinstein, D-Calif., called on Mayor Lee to veto the bill, and protect the residential nature of the city. "Those of us who value the residential character of our neighborhoods and are invested in the city's quality of life will see all of this washed away by a blanket commercialization of our neighborhoods," she said in the article.
But board president Chiu argues the bill keeps short-term rentals in check. "The new law will make it 1,000 percent clear that if you are a landlord evicting tenants to create a year-round hotel, or a tenant using multiple units, you will get hit with fines of thousands of dollars per day, and potential criminal charges," he said.