New startup Cobo allows San Franciscans to rent out their homes as offices. San Francisco government is not amused.

In recent weeks, Mission residents have been receiving curious missives in their mailboxes inquiring whether they’d be game to monetize their kitchens and living rooms by having strangers drop in and start doing office work. As if to clear up any ambiguities, these fliers feature a photo of three young, happy business casual types sitting at a table and peering at laptops. An arrow points to them alongside the handwritten words “THE MISSION.”  

These fliers have the homespun, photocopied Sharpie-on-typing paper look of something you’d get from a local kid offering to walk your dog or the church group that wants your gently used jackets.

It’s not anything like that.

Rather, it’s a note from Cobo, a nascent startup hoping to capitalize on what its founder calls “a billion-dollar market”: Placing lonely freelancers pining for company into people’s homes, monetizing that home, and taking a cut.

Your humble narrator’s requests to speak to Cobo staff were not granted until he signed up to use the platform and work in some unknown person’s dining room. It was then we were sent a number to reach Rafe Oller, Cobo’s marketing head. He declined to say much, as a launch is imminent: “We don’t want to do advance press.” When asked if Cobo had done any advance press with this city’s government, he replied: “We’ve been working with the local government, yes.”

Well, that’s one way of putting it.

When Cobo mailed out fliers to residents of the Mission, Cole Valley, and elsewhere in order to find freelancers willing to pay $10 a day or more to work in strangers’ kitchens and strangers willing to host them — it managed to inadvertently solicit several employees of the San Francisco Planning Department at their homes.

These employees then brought the fliers to Tina Tam, the Planning Department’s code enforcement manager. She roped in the department’s Zoning Administrator to decide whether Cobo’s business model is strictly legal. The City Attorney is now in the loop, too.

Our planning codes were not prescient enough to directly rule on whether you can glean money from people via a third-party outfit by running a de-facto office out of your home. But it is pretty clear that, with specific exceptions, you cannot run an office out of your home, and cannot have employees or clients dropping by.

So, planners are involved, lawyers are involved, and lawyers with an expertise in planning are involved. It remains to be seen how they’ll rule on the legality of Cobo’s business model on the eve of its official San Francisco launch. But, having made a number of phone calls to city decisionmakers, one needn’t be an expert to intuit that they do not appreciate learning of a company’s official launch via haphazard and inadvertent mass-mailings.

It would not at all be at all surprising if our city’s ambiguous rules are interpreted in such a way as to clip this company’s wings.

This is what it’s come to pic.twitter.com/kndiJJXpMu

— Julia B. Chan (@juliachanb) March 28, 2019

It’s funny, but not ha-ha funny, that the two tech startups-turned-titans that currently epitomize San Francisco — Uber and Airbnb — vastly increased congestion in one of the nation’s most congested cities and cannibalized affordable housing in one of the nation’s most unaffordable cities.

Their business models were, additionally, strictly illegal under city law. And yet they flourished here regardless, not because of some newfangled technological ingeniousness but good old-fashioned co-opting of politicians and institutions via money.

If you or your principal investors aren’t tight with politicians or regulators, and you can’t induce them to look the other way or rewrite the law so as to enable your company (and, in a neat two-for, kneecap your competitors), then entitled and destructive behavior is less likely to be tolerated.   

So, no, Cobo has not yet taken the step of registering its business in San Francisco under either the name “Cobo” or its prior iteration, “Hiven.” If and when it starts up here, the hosts of Cobo workspaces would be legally mandated to register as well. As would, additionally, any business operator toiling out of a Cobo workspace (or, for that matter, a cafe, or her own home, or anywhere within city limits).

And, while Cobo disseminated fliers throughout the Mission, it never contacted the neighborhood’s elected representative, Supervisor Hillary Ronen.

“I have the same worries I had with Airbnb,” she says. “These homes were not meant to be offices. I worry about it escalating the already egregious cost of housing. I worry about issues that come up in terms of tenants and evictions. I worry about how it impacts congestion and parking,” she says. “My list of concerns is quite large. And I am also sick of everyone and their mother creating every new experiment for the Mission. The Mission is dealing with enough issues as it is.”

This is, to put it mildly, not a good way to break the ice with any elected leader, let alone the one overseeing the desired territory of the Mission.

There are, already, services in this city offering similar fare to Cobo. Spacious, for example, allows freelance workers to post up in restaurants during hours when they’d otherwise be closed.

City officials told me they found this far less problematic. These restaurants are, naturally, in the districts where the city would prefer businesses to be. And it’s not as if a co-working space will be such a bonanza that a building owner will shutter a restaurant and go full-laptop haven.

But, with a residential space, that is a worry. Regarding anyone itching to convert a home into a full-time office, Oller says “We don’t allow those people on our platform.”

And yet, Cobo’s website allows for up to six workers to drop by one’s home for up to five days a week. With this income — plus potential short-term rentals on Airbnb or similar sites — the notion of taking a home off the market and converting it into a full-time office/hotel/not-a-home is hardly far-fetched.

Just how Cobo plans to ensure unscrupulous people won’t exploit its site is something city officials would have loved to discuss prior to fliers showering the neighborhood.

“But that has not been the model,” says Ronen. “The model has been to flout and break laws, get people hooked to the service, and force city government to bend to the will of a scofflaw company by becoming a powerful force in lobbying and financing of candidates and campaigns and politicians in Sacramento.”

And that model works. Until it doesn’t. Because when you fail to engage with the Mission, the Mission engages with you.