The Billfold talked to a tenant who is making a small fortune by renting out his apartment through Airbnb. This renter understands that what he is doing is probably driving up rents, but he doesn’t care: It’s a dog-eat-dog world out there. If you recall, Mayor Ed Lee bent over backwards so that Airbnb wouldn’t have to pay hotel taxes. An excerpt from the Billfold’s interview:
Anon: Right. I have a lot of anonymity at my place. It’s a large building with over 100 apartments, and we were just bought by a new company. I can buzz people in from my phone, so I buzz in the renters and the maintenance people.
I’m not breaking any laws. But I am skirting the lines of my lease. It says something in my lease “no subletting” … but also, “no visitors more than 30 consecutive days.” I’ve read up on this a lot, and mostly, if you do get caught, they will just say “don’t do it anymore.” It’s hard to find, but there are a few instances of eviction.
Logan: You said you’re not breaking any laws, but you don’t want me to use your real name.
Anon: Ehhhhhhh, yeah, probably not. Just because of the landlords getting wind. I’d like to keep as low a profile as possible. You know, AirBnB is the biggest thing in SF driving up housing prices. People are taking 2 bedrooms off the market renting them out to foreigners or travelers instead of having a full time resident in there. So there are fewer places to live. They say getting an apt in SF now is harder than getting a job. It’s SO competitive to find a place worth living in. People aren’t moving.
Logan: That makes sense, but what are you basing it on?
Anon: It’s just a fact. Everyone talks about it. Here, look at this: “‘Many landlords decided they would be able to make more money by renting (their properties) as tourist space,’ said Ted Gullicksen, president of the San Francisco Tenants’ Union, which promotes renters’ rights. ‘We’re seeing a big loss of rental housing stock, which we’re already losing through other means. This is added pressure.’” That’s from the San Francisco Chronicle.
Logan: Well then, you’re contributing to that problem.
Anon: I guess, but I’m okay with it. It’s making it a wealthier city. Richer people mean more taxes, mean better resources. So what’s so wrong with building up a strong economy in SF? So artists can’t live downtown? What’s so wrong with that? There are places I’ll never be able to afford either, but I’m not complaining. I don’t get why this is such a big deal.
Logan: If all the affordable apartments in the city are taken off the market and only available as hotel rooms, you don’t see that as a big deal?
Airbnb is a more affordable alternative for travelers to cities like New York and San Francisco, where hotel rates are high, but it may have unintended consequences, like driving up rents. Two issues to think about: Are tourists paying their fair share for city services? And is it a conflict of interest for Mayor Lee to fight for the interests of one of his biggest donors even if it’s at tenants’ expense?
I agree that it’s legally dubious to hold a lease that you *don’t* live at and rent it out on AirBnb. Renting spare bedrooms in this manner also qualifies.
However, I really don’t see what’s wrong with renting out your own place when you’re on vacation. How does that hurt anyone? Leases and the law should be updated to reflect this. It’s just a nice way to make SF more affordable for everyone.
If he is charging money, he is running a business. I’m betting he’s not paying taxes for it. I’m pretty sure if the landlord wanted he could win this case in court any way. Money + staying a night is still subleasing, even if it is short term. However the landlord might not care if it runs up the rate, after all its the tenant that would be responsible for the damages.
Because he makes more money does not mean he is paying more in taxes that go to the city. He MAY be paying more in income taxes to state and fed but I doubt he’s declaring this income. You could argue sales taxes would get the city but there is nothing that says he has to LIVE in San Francisco to run this scam. Much less, there is no increase in property taxes. This is simply price gouging.
Airbnb is definitely not the largest contributor to SF’s rising housing costs. This person clearly doesn’t know anything about the housing market.
Hi Brad,
The affects Airbnb has on the city’s rental market is largely unknown, which is why I am working on a comprehensive story that goes beyond this blog post. In the four years of covering housing and land use in the City I agree with you that it is not the sole contributor.
Thanks for reading. Best, RH.
Are you an attorney, LS? Because I am, and I can tell you that there is no black-and-white answer to the question of whether this is legal, in most cases. Most leases prohibit operating commercial activities and/or using the unit for other than residential purposes. And “no subletting” means “no subletting,” regardless of whether or not the original renter is still occupying part of the unit. People who want to do this are really taking a risk.
If he is living there too, then I think this is legal. It really depends on where he’s living.