Airbnb Legalized In San Francisco, With Restrictions

Airbnb is now legal in San Francisco, the city where it was founded and has called home for the last six years. The service connects travelers with people aiming to earn money from renting extra space in their homes, and currently operates in a number of cities where it has raised questions about its legality.

While it remains restricted in New York City (hosts must be present during the rental) and a number of other worldwide locales despite its popularity, San Francisco voted to legalize Airbnb and the kind of short-term rentals it facilitates on Wednesday. The city passed an amended bill that’s not without controversy. Proponents say that services like it afford relief to long-term residents feeling the pressure from a housing crunch, while critics say the new law fails to address millions of dollars in back taxes due the city.

“The legislation that moved forward tonight will give regular people the right to share the home in which they live and make it fair to share in San Francisco. This vote was a great victory for San Franciscans who want to share their home and the city they love. We look forward to working with everyone as we move forward,” Airbnb spokesman Nick Papas said in a statement.

The law incorporates a number of requirements for Airbnb users to rent a property – hosts must register with the city, pay a $50 fee and agree to a 90-day limit on the amount of time they can rent without being present. Called a non-hosted rental, San Francisco limits the practice to protect its limited housing supply.

Airbnb hosts also now have to pay the city’s hotel taxes, have a business license and steer clear of building code violations. The law also requires them to have $500,000 of liability insurance coverage, according to the San Francisco Business Times.

City supervisors amended the bill during a four-hour debate that preceded its passing to ensure that properties with a history of using bankruptcy to evict tenants through the state’s Ellis Act will not be eligible for Airbnb. Properties that appear to be former apartment buildings now converted into permanent hotels will not be able to offer short-term rentals.

Amendments that were proposed, but not passed, included one that sought roughly $25 million in back taxes from Airbnb, and another restricted the time that homeowners and apartment dwellers could offer “hosted” rentals even if they are present.