San Francisco Votes Against Affordable Housing, For AirBnB

I am told by voters in San Francisco who are not fans of the sharing economy that the AirBnB measure suffered from a flaw common to most California ballot initiatives: that even though it attempted to address a legitimate issue, it was so overreaching in how it was drafted that it led some people who were philosophically sympathetic to nevertheless vote against it.

By way of background, some pro-AriBnB regulation went into effect last February; see here for an overview.

But I’m skeptical of the defenses, particularly since the ones I heard (from different people) seemed to contradict each other. One argues that the AirBnB proposal was addressed at people who were buying properties to rent them out via AirBnB. If so, that directly supports the charge made by critics, that AirBnB is taking housing out of the market for rental to residents, and moving it into the hotel market, reducing supply and therefore availability. Another person, who rents his residence out some of the year via AirBnB, argued that the proposed regs would have curbed his ability to rent his place out. If I were a landlord, I would not be happy about tenants that I had screened in order to rent to them then letting other people I had not vetted into my premises. In communist New York City, a landlord cannot unreasonably withhold a tenant’s right to sublet for two years out of any four. The subtenant has to fill out an information form and submit it to the landlord, and also submit the form of the agreement with the subtenant. The tenant is restricted in how much rent he can charge his subtenant (no more than the rent amount if the apartment is rented unfurnished; he can charge 10% more for a furnished unit). The concept of the NYC law is to allow tenants to keep their rental and defray their costs if they will be away for a long period (as I did when I was in Australia) and not to arbitrage the landlord.

And the people who are seeking to supplement their incomes via AirBnB fail to understand that landlords will simply start demanding higher rents to reflect the higher incomes of their tenants by subletting. Any short-term gains will be quickly eroded by more aggressive rent increases (and the landlords can argue that they are justified by greater wear and tear on the apartment. Those who argued against the anti AirBnB bill effectively conceded the issue by arguing that the apartments will get higher use).

In fairness, San Francisco has an extraordinarily overpriced hotel market; it’s hard to get a room even at what in the rest of the county are mid-priced chains for under $400 a night. And the campaign spending on this initiative was the hotel industry, which I am told spent $4 million, versus AirBnB, which the article below reports as having spent $8 million. It’s not as if the hotel industry can credibly present itself as a good actor; pay increases to hotel workers have been minimal in recent years.

But I continue to be distressed at how people defend AirBnB and Uber as opportunities for them, as opposed to a way to ameliorate the diminished state of workers. People would not be renting out their homes to strangers if they were earning adequate wages. The middle of this short Bill Maher segment on the shafting, um, sharing economy, which we posted earlier, sums up the underlying issues well:

I encourage comments from people in the San Francisco area who know the peculiarities of the housing regulations, since you need to understand that to judge the impact of the proposed regulations properly.

By Steven Rosenfeld, who covers national political issues for AlterNet, including America’s retirement crisis, democracy and voting rights, and campaigns and elections. He is the author of “Count My Vote: A Citizen’s Guide to Voting” (AlterNet Books, 2008). Originally published at Alternet

San Francisco voters on Tuesday showed once again that making money is more important than preserving the city’s bohemian and immigrant culture by rejecting one citywide ballot initiative that would have regulated homeowners who rent out units via Airbnb and rejecting a short development moratorium in the Mission District, a Latino neighborhood especially hard hit by gentrification.

Fifty-five percent of voters opposed the anti-Airbnb Proposition F and 57 percent opposed Proposition I, which would have imposed an 18-month moratorium on luxury condo development in the Mission. Meanwhile, other ballot measures allowing more housing pimarily targeting tech workers to be built, passed, notably a proposal by the S.F. Giants’s owner to build a high rise district across from its ball park.

(image: San Francisco Tenants Union/Facebook)

In all these cases, those who stand to profit in small and large ways shamelessly claimed they were on the side of working-class San Franciscans. The most high-profile campaign surrounded the anti-Airbnb measure, where consultants for the multi-billion company said that they were fighting for people who were just trying to find a few more dollars to pay their bills. Airbnb, which is based in the city, spent more than $8 million to defeat Proposition F, compared to $482,000 for opponents led by housing and labor activists.

“Voters stood up for working families’ right to share their homes and opposed an extreme, hotel-industry-backed measure,” Airbnb spokesman Christopher Nulty told the San Francisco Chronicle, boasting they enlisted their homeowners to go door-to-door. “The effort showed that home sharing is both a community and a movement.”

The dynamics of every city’s affordable housing problems differ. In San Francisco, where the average home value reached $1 million in July, the influx of thousands of newly minted millionaires from technology companies buying homes and conversion of traditional rental properties into pricier vacation rentals has caused a shortage of affordable units and price spikes. An average one-bedroom apartment rents for about $3,000, double what it was seven years ago. Two-bedrooms average $3,900.

Measure F would have prevented rent-control apartments from being illegally converted to Airbnb hotels, would have prevented evictions so units could be converted to vacation rentals, and would have made Airbnb-members register with the city. Backers said that 70 percent of Airbnb’s 10,000 units in the city were entire apartments, not one room in shared homes. Less than 10 percent were registered under newly passed city laws.

Their remedy was to limit vacation rentals to 75 days a year, beef up enforcement and penalties; and allow neighbors and others to sue violators. That last provision—allowing residents to report conversions to rental units and win monetary awards in court—became the linchpin of Airbnb’s campaign against Proposition F. In addition to casting property owners with million-dollar homes as struggling working people, they portrayed the ballot measure as an Orwellian invitation to spy on neighbors and report them to a vengeful local government.

The vote-no flyer from the establishment-embracing local Democratic Party said, “Prop F encourages neighbor-on-neighbor lawsuits, requires people to report to the government when they sleep at home, bans short term-rental of in-law units, and takes away our property rights.” Its headline said, “Housing is the most important issue facing San Francisco,” followed by “the Democratic Party’s endorsements to make housing more affordable.”

All of this rhetoric — from Airbnb claiming their win is a victory for “working people” to the city’s Democratic Party claiming voting no will make housing “more affordable” — is feel-good verbiage that allows people lucky enough to own property to put more money in the bank. It ignores that recent luxury housing developments and accompanying real estate speculation in neighborhoods that have long been home to artists and immigrants — such as the Mission District — has displaced more than 10,000 families and made San Francisco less-diverse and more of a tech monoculture.

As another election flyer put out by affordable housing advocates who lost read, “There is more luxury housing being built in San Francisco than at any time in the last 40 years. Meanwhile, the percentage of affordable housing in San Francisco is at a record low.”

However, as a majority of San Francisco voters showed on Tuesday, what matters the most is not preserving the culture and vibrancy that attracted generations of people to this city in the first place, but the ability to make more money regardless of its costs.

Print Friendly, PDF & Email


  1. effem

    How is limiting housing supply good for the average person? Seems to me SF needs more supply and lots of it to get prices down. Doesn’t matter if it’s high-end or not as supply is fungible at the end of the day. Keep limiting supply as demand grows and costs will go up. Econ 101.

    1. jgordon

      Economics is a pseudoscience, on par with astrology or phrenology. Econ 101 is a course almost entirely composed of misinformation, propaganda, and outright lies. Citing such as your source of inspiration weakens your ideas.

      I’m seriously pissed that I actually wasted money taking such a useless course, wherein I was propagandized with “facts” and inundated with phony math. I didn’t even realize how badly I’d been scammed and misled until several years later. That stuff is not only wrong, it’s dangerous.

    2. Yves Smith Post author

      I suggest you reread the post.

      The short term marker that AirBnB serves is NOT for the average person in San Francisco. It’s for transients.

      And high end housing is not fungible to the low end. There’s even a new paper at the NY Fed that makes precisely that point. There have been lower increases in the highest-price rentals because more are being built. They are not being built at the low end. Taking low end housing/neighborhoods and building luxury units does squat for the “average person”.

      1. Whine Country

        I would argue that jgordon’s comments also make clear that all economics courses are NOT fungible.

      2. Jim Haygood

        ‘Taking low end housing/neighborhoods and building luxury units does squat for the “average person”.’

        It’s a natural consequence of rent control in ‘communist San Francisco.’

        1. Robert Frances

          SF rent control has no impact on new housing construction since it only applies to units built before 1979. A state law (Costa-Hawkins) prevents rent control from being applied to new construction even if SF voters wanted to apply RC to newer buildings. Rent control has a similar effect to CA’s Prop 13 that limits property tax to 1% of purchase price, plus a 2% annual inflation adjustment. Both laws allow homeowners and tenants to live relatively secure in their housing without fear of displacement from massive rent increases (rent control) or fear of displacement from spikes to property taxes (Prop 13).

          Luxury housing (mostly high-end condos) is the only housing being built in SF because there is very high demand for it from the region’s technology, financial, legal and medical professionals who tend to prefer living in SF compared to the other 100 cities in the Bay Area. More problematic is that many of these surrounding cities actually discourage new housing from being built (traffic!, new schools (ack!), traffic!, possible lower home values, etc.), putting even more pressure on places like SF. Tenant evictions and conversion of apartments to condos is a natural “market” outcome as the local housing supply is shifted to the higher income demographic moving to the Bay Area.

          Very few regions in the world have as many large companies headquartered in one region, many of which didn’t even exist 30 years ago, or were relatively small in comparison to their current size. Google, Salesforce, Facebook, Apple, Broadcom, Cisco, Adobe, Oracle and many other corporate behemoths have plans for even larger corporate campuses to accommodate tens of thousands of new employees, yet very little housing is being planned in the region to accommodate them. When the newer “unicorns” like Airbnb (SF) and Uber (Oakland) start ramping up hiring after going public, the numbers of new migrants chasing high salaries and stock options will only increase. New hires who transfer to the Bay Area either buy a unit that once was an apartment of a middle- or lower-income family or, if they rent, their presence in the rental market causes rents to increase by virtue of their higher incomes chasing a limited rental supply.

          The landlords, developers and government, which make the rules favoring the first two groups, are firmly in control in California. There’s no need to worry about any socialist or communist infiltration.

          1. tegnost

            Reasonable assessment of cali, but those companies could be offshoring a considerable amount of urban development funds. Lets not forget that a good tax base and aggressive (downzoning etc..)regional planning a lot of really good things can happen, transit, neighborhoods, open space always improve areas. Also, the landlords but really the developers own gov’t in cali. I’ve often tried to get across the point, and agree with you, that socialism and communism have no place in california, it’s I got mine to the core. And I could have moar.
            Prop 13 was really tax activism that kept people like my mom in their house, or the developers would have forced them out through tax increases.

        2. jrs

          To call a city near entirely taken over by the wealthy, and why wouldn’t they it’s a great place to live, Communist is beyond strange, even if the politics there lean left sometimes.

          1. Yves Smith Post author

            You are missing any sense of irony. The fact that NYC has very good public transportation, tough tenant protection, and a good housing court makes it Communist by the standards of the rest of the US.

      3. two beers

        high end housing is not fungible to the low end.


        Markets can have different market segments, and in some markets, these segments are not fungible. For example, if Ferrari boosted production, Hyundai prices would hardly be affected.

        Any attempt to model housing prices without factoring in the effects of fungibility, speculation, and gentrification is disingenuous at best. These concepts aren’t taught in Econ 1. What you learn in neo-classical Econ 1 are simplistic two-variable models that justify policy that benefits the wealthy and hurts working people.

        Whenever people cite “Econ 1” or “basic textbook economics” to justify building more luxury housing to make all housing more affordable, they either don’t know what they are talking about or are trying to pull the wool over your eyes with the appeal to (bogus) authority

  2. patrickD

    Typo I think on the amount spent by the pro-F folks. Following should read $400,000, not $4 million:

    ” And the campaign spending on this initiative was the hotel industry, which I am told spent $4 million, versus AirBnB, which the article below reports as having spent $8 million. “

    1. Yves Smith Post author

      No, the $4 million was the reported spending by the hotel industry, NOT by the activists. I stand by what I was told. Activist spending was much lower, as reported in the article. Now the person who told me about the hotel industry ad/other campaigning spend may have had the wrong data, but that is what he told me.

  3. NotSoSure

    Thank God for nature. 10 more years of the drought should finish off pretty much everyone. But then again, there’s Dubai. So perhaps SF will be Dubai part deux?

  4. jgordon

    This seems to be less of an issue of airbnb and more of an issue relating to the pervasive sickness of our economic system. The serial bubble blowing of real estate values coincident with the reinflated tech bubble concentrated in SF are at the heart of the distress in the area. But a collapsing society–by definition–can’t address its fundamental problems, so all that’s left for it to do is tinker around the edges to (ostensibly) ameliorate some of the most perverse outcomes. But unfortunately this timid and limited approach will only result in much additional misery in the end.

    1. Gaianne

      The Airbnb vote is impressive: Voters voting for scams. Seemingly a lot of them were voting with the hope of becoming scammers. Good luck with that! Greater fools, all!

      Very sad, as you say.


  5. Elizabeth

    I live in SF and was very upset about the defeat of theAirBnB initiative. I have no problem with homeowners who want to rent out rooms in their homes, but there have to be regulations in place for registering, taxing and meeting other city/county obligations, which at this point are not being enforced. Only a fraction of AirBnB apt. rentals were being registered with the City. It’s true that apt. buildings are being sold (and tenants evicted) so they can be turned into AirBnB rentals, and further exacerbates the housing situation. In my opinion, voters here fell for the scare tactics that were used. One such ad had a woman sleeping with the voice saying, “Do you want the government knowing where you sleep.” Or, “neighbors will spy on each other and file lawsuits against them.” It was utterly ridiculous. I don’t buy the story that the initiative was poorly written.

    I’ve lived here for over 30 years, and I’m shocked at how rapidly it has changed here in less than 5 years. The shafting economy has literally destroyed the soul and character of SF. I heard tonight on the local news that the cost of a one bedroom apt. is now $3,600! Oakland is not far behind. We hear how the mayor is going to build “affordable” housing (50 units here and there) which is a joke. Big money rules here – and the Democratic party was solidly behind these pro-growth measures, including AirBnB. (They’re also solidly behind Uber, Lyft and all the other shafters).

    Professionals (nurses, teachers, firefighters) can no longer afford it here. There is talk of subsidized housing to be built for them- but that’s not the answer. It’s always groaf, groaf, groaf – as if it will solve all our problems.

    I’m now picking up whiffs of “rent control is what is causing our housing shortage.” To me, this smacks of saying the invisible hand of the free market will correct our housing shortage problems if we just get rid of these damnable regulations, and I wouldn’t be surprised if this comes up for a vote someday soon. The City of Richmond (across the bay) voted to repeal rent control yesterday.

    Greed and avarice have taken over here- and also a certain “meanness” – As rich as this city is, we have an intractable homeless population which no one seems to be able to solve. The libertarian/neoliberal playbook is very much in evidence here, sad to say.

    1. MikeNY

      I completely agree on the ‘meanness’. It is palpably increasing. You hear it in comments on the homeless, you see it in the maniacal way people (usually in Mercedes SUVs or Audis etc) drive.

      Tech is ruining SF.

      1. tegnost

        yes, as suggested check the comments in the wsj re the boston lawyer taking on uber…never knew how much wall st journal readers cared about workers

      2. jrs

        I doubt it’s all tech, frankly most tech workers barely earn the money to eek by there, even if they would be rich on the same income in Kansas. Tech CEOs or at least middle management, well that is another story. But code monkeys? They only earn enough to squeak by in that city.

    2. nowhere

      I live in Oakland, and my rent for a 2-bedroom apt is going up to $4600.

      My wife and I are both engineers and can’t believe how insane rent and housing prices are; properties going for 20% above asking and still needing $100k in upgrades to just get close to modern standards (electrical, sewer, seismic upgrades, etc.).

      There are other factors playing into this as well: foreign buyers that pay cash well above asking and limited supply because of zoning regs.

      1. jrs

        Yes if engineers can barely afford it, I would suspect most tech workers are in the same boat. Is the median salary really that different? Engineers might earn more in many cases …

        1. two beers

          The tech workers are the driving market segment for the demand in SF. However, the housing being built for them consumes up to half (maybe even more) of their income. These are largely young singles without vehicles, who spend most of the remaining 50% of their income on going out to clubs and bars in SF.

          If you’re making nearly six figures right out of college and you have few other expenses (other than your college loan..), you don’t have a problem paying $3000 a month for your tiny coder cubicle in NEMA, because you own go home to sleep and change your clothes.

          1. tegnost

            the tech grunts are making the bottom, just like in NYC bust your ass and maybe you’ll make the next level

  6. Justicia

    I live in New Orleans where Airbnb (and its progeny) is shafting us big time.

    I don’t oppose home owners renting out rooms provided they’re living in the house, as I wouldn’t care if my neighbor had house guests every week-end. But people are buying houses, some of them multi-family houses, to turn them into Airbnb hotels — as the purchaser of the house next door to me has done. He has 4 or 5 apartments that are rented out every weekend, with a steady stream of traffic. During the week, the house sits empty. Not only is this driving up rents, it’s destroying neighborhoods — if everyone on the block did this there wouldn’t be any neighbors.

    It’s completely illegal to operate a hotel in a totally residential neighborhood but the city won’t enforce the law — claiming there’s a “loophole” (called pour money into political coffers) that prevents enforcement. If the city doesn’t crack down on Airbnb abuses, then the culture of the city will vanish along with the folks who created it but can’t afford to live here anymore.

  7. IsabelPS

    I know I probably should read backwards the articles about the sharing economy and more precisely, Airbnb (and Uber). I haven’t paid much attention, so far, but I’m starting to realize that there is a strong opposition to it here. Any chance someone could give me a short summary of the reasons?

    I will just mention the case of Portugal, and more specifically, Lisbon. (It is probably important to say here that Portugal has an extremely high percentage of home ownership). As anybody who has visited has probably noticed, there is an enormous amount of derelict property everywhere, way more than in any other capital that I know. The reasons for that lie, probably, in various factors (not necessarily in the right order): blocked rents since practically the beginning of the XX century (I think), that made owners just give up on their properties for decades; very low property taxes, which made it cheap just to abandon vacant properties; very cumbersome laws that made it difficult to sort out inheritances, etc, which gives a strong incentive to just let things be; very cumbersome and demanding laws about renovation, that make it extremely difficult to do it legally (just to give an example, if I were to have the electricity remade in the old house where I’m living in a small village according to the law, I would have to prepare it for optic fiber and have a plug for the phone in every room and for TV in the kitchen… even I didn’t have a TV for years and switch it on less than 1/2h per year).

    The fact is that Airbnb is spearing an incredible renovation of the city, especially since last year where the laws about “local lodgings” became much much easier, essentially letting the market work and making people pay taxes. Lots of people and rental properties got legal and renovated their properties in the hopes of getting something out of it. Of course, were are also getting to the stage of firms buying entire buildings to let, but those too were falling to pieces. So, I tend to think it is a good thing…

    1. Ditto

      The business model is built on circumventing regulations. It is also built on decreasing economic and social stability.

      Take AirBNB, in a place like NYC, landlords are using it to 1. bc there is increased pressure to squeeze out existing long term tenants such as families for the higher gains of short term stays 2. They avoid housing safety codes bc short term tenants will be unaware as I was told by one landlord of code standards and 3. In recent court cases they on the flip have won cases claiming tenants broke their leases by engaging in the services of AirBNB. There are other regulatory and instability reasons that contribute to a race to the bottom that fall under issues like what is in the contracts, insurance that is likely not provided and other issues. For example , an Uber hires people as contractors when they should be employees – a lose of 25 percent of value to the contractor, at the very least, in benefits while accruing costs like for cars and insurance as well as not addressing safety issues.

    2. Ditto

      By the way, the claim of improvements is misleading. Often times, the landlord will not engage in repairs as a means of pushing out long term tenants despite penalties. They only minimally fix up properties after allowing them to fall into disrepair. If SF is like NYC, the work is often low quality.

      This is the same issue as incentivizing foreign speculation in domestic housing that produces overpriced local real estate markets. It makes the apartments unaffordable, unsafe and increases economic and social instability since the money can move at anytime.

      There a whole building being bought by speculators who use harassment tactics to push out long term tenants. Again the same ploy – a lack of repairs and building services are used.

  8. Mark P.

    “As anybody who has visited (Lisbon) has probably noticed, there is an enormous amount of derelict property everywhere….”

    Opposite situation to San Francisco, which is sited on restricted space where there’s never been enough housing since the 1940s-50s probably.

    1. IsabelPS

      The problem in Lisbon used to be, for decades, that contracts were so rigid that nobody would rent away apartments unless in very specific circumstances. Therefore people had to buy in order to be able to live somewhere near the city. The fact that the law has recently changed (granted, with a lot of unsolved problems like oldish tenants that used to have ridiculous rents for 20, 30 years, but have even more ridiculous revenues) has made it possible to rent again in the city.

  9. Ditto

    My friend who lived in SF for several decades stated this would happen several days ago bc of the union between corporate power and the liberal yuppie trolls who run SF. This has to do with liberals saying “I want that ” even if it does lead to a race to the bottom. The liberal middle class there is complicit and the reasons you describe are likely just excuses to soothe their guilt based on what he told me.

    1. IsabelPS

      I don’t know if you are referring to me when you say “you describe”. Really, lots of European capitals have strange housing rules (and problems), often since WWII as far as I understand.

  10. IsabelPS

    I wonder if this kind of thing has different effects in different societies: bad in fairly unregulated ones as the US, good in overregulated ones like Portugal.

    1. Carla

      Is it also possible that the sharing/shafting business model could affect different societies on a different time-table? It may be that Air BnB has some good consequences in Lisbon in the short term, but negative ones longer term. I am not wishing for this at all; simply suggesting that not all short term pleasures lead to long term benefits. In fact, perhaps few of them do.

      1. IsabelPS

        That could very well be. Apparently Airbnb started 7 years ago, and I’ve only been aware of it for the past 2 years or so. Granted, people are already complaining about the enormous influx of tourists in residential areas in Lisbon (of which Airbnb is a part); but some older residents of the old quarters welcome the novelty, apparently. The inner city in Lisbon has been mostly abandoned for the past decades and the trend is reversing now. Will it be good or bad in the long-run? Who knows? I am not at all sure that we are as good at planning and organizing things as we think we are…

  11. Roquentin

    I agree that AirBnB needs to be regulated, but it’s been a lifesaver for me on vacations. I can’t really afford hotels most of the time. I rented an entire apartment in Montreal (it was the basement of a duplex with the owners living upstairs) for about $70 per night. Most hotels were double that. I also did a similar thing in Long Beach, NY this summer. A woman owned a two story house and rented out the top floor. It was great. Once again, I’m not saying this shouldn’t be regulated, but it can work. Everyone seems to forget that the hotel lobby has a vested interest in continuing to keep those prices up. It’s not as simple as AirBnB vs Regulation.

  12. Thure Meyer

    Why be upset – think instead of what the future will bring (and how glorious it will be)

    Everything will be like a cruise ship where you only meet your relatively well heeled travelers. As you walk out of your AirBnB room in Soho NY, or perhaps some famous area in Paris you will encounter your wealthy neighbors and not the local people that actually created the ambiance you are searching for.

    But we will fix that by hiring Universal Studios and Walt Disney and you can then soak in the cartoon version of what once was a living and creative neighborhood.

  13. landline

    Politically radical San Franciscan here, ensconced in a rent-controlled (not cheap) apartment.

    The politics here are dire and will only get worse as working class and poor people are exiled by the free market and the sheriff (a former Green, no less) to far flung reaches of the Bay Area or to a tent on the street or under a bridge.

    The political opposition is largely loyal to its favored elected officials because its leadership is predominately from city-funded non-profit organizations. People that try to hold all officials accountable, even the nice liberal ineffectual ones, largely drop out from or shun activism while the same old, same old people hold the same type of feel good events on the steps of city hall or focus on electoral campaigns only to get creamed. “If only the opposition didn’t outspend us, we would have won. Better luck next time.” Duh.

    Short term rentals were almost entirely illegal in San Francisco before the liberals on the Board of Supervisors caved under pressure from tech and real estate interests and legalized them. Contrast San Francisco to Santa Monica, which, if I remember correctly, outlawed all un-hosted short term rentals.

    Sorry to be so grim, but the conditions on the ground require it. Some activists I know are downright excited that the puppet Mayor only got 56% of the vote, as if that is a victory. He’s still the Mayor and he ain’t scared of us (or them). He didn’t even have to campaign (good thing for him, as he is a stiff). Now our great hope is Aaron Peskin, who raised more money than his opponent, undoubtedly some of it from tech and real estate sources, and under whose leadership the local Democratic Party Committee became more dominated by rich, liberal real estate and other corporate interests.

    As always, any political change will come from outside the existing structures. I’m not sure what that will be, however. I have little hope of positive change in San Francisco because the only young people that can afford to live here must live at home with their parents, be able to afford a minimum of $1000 to $1500 for space in a shared flat, or live in a totally precarious situation like in a tent or a vehicle. I meet young service workers/students who live in vans and speak of it as if it were normal in an urban setting. Well I guess it is, now.

    Thank you, Mr. Market.

    1. ks

      In a KPFA interview, Peskin sounded determined to regulate AirBnB but I haven’t lived in SF for a long time so don’t have the measure of him.

      I’m sorry the city traded in reform-minded Sheriff Mirkarimi for police department candidate Hennessy. You can look forward to even more angry homeless people in the BART stations now. The tech execs will be presiding over a city without a character or a heart or a decent newspaper.

  14. Bigfoot

    Some of this might be ranty.

    I live in SF. It is hard to overstate the changes this city has gone through. They continue, with no end in sight as far as I can tell. Those who talk about bubbles bursting have yet to show me any evidence in support of that argument. To cite just one example, the blocks from Market/Van Ness to Market/Octavia are going to be transformed over the next few years. The new buildings on Van Ness are going to dwarf most recent construction. In other words, some of the biggest projects haven’t even started.

    Mayor Lee ran unopposed. There is zero meaningful/organized/actual opposition to what is happening. The people/organizations that would, in the past, have mounted a stronger response…are gone. Putting a couple milquetoast props on the ballot was like putting embalming fluid on the corpse of what SF used to be. Of course there are still plenty of people and organizations doing much needed work, but they are not capable of taking on systems or structures and seem more than happy to work within officialdom.

    Since the results to Tuesday’s election were announced, I’ve seen multiple declarations by supposedly progressive people/organizations — and I feel like this is so SF — to the tune of “This was a victory of sorts. This many people voted against Lee and for Props F and I. A movement was born and it shall continue.” If that happens, great. But this sort of NorCal need to put a positive spin on EVERYTHING comes off as an ongoing inability to accept and admit failure.

    Has the pace of displacement lessened? No. There are homeless people everywhere. Gainfully employed people, including techies, are looking to live elsewhere. I recently walked from Montgomery St. BART to Civic Center BART and saw more needles in those few blocks than I’d seen in the last few years put together. It reminded me of walking the crack vial covered streets of New York. People are really hurting. Car break-ins are skyrocketing and there are entire blocks that have become open air bazaars full of stolen goods. In a city that is awash in money, this is failure and a very obvious indicator of widespread deprivation.

    The inability to accept failure also comes in the form of saying the legislation was “flawed” or that low voter turnout or the money spent by Air BnB is to blame. You mean the legislation wasn’t perfect? You mean a city full of people teetering on the brink of dislocation and/or homelessness didn’t bother to vote for something that may or may not help? When it comes down to it, you vote for it because maybe, just maybe, it creates some breathing room. You vacillate, you capitulate.

    People are here to make a buck. The SF that provided some safety to freaks, weirdos, and outcasts is still here, but not nearly as much as it used to be and probably not for much longer.

  15. participant-observer-observed

    Readers may appreciate this related narrative 20 min video short on “Million Dollar Shack: Trapped in Silicon Valley’s Housing Bubble.”

    It is interesting to watch since as an NC reader, the topic is quite familiar; still, it is stunning to see what it looks and feels like to locals!

  16. Bea Braun

    I have used AirBNB now 3 times and have booked 2 places in Hawaii over Xmas. I could not travel as I do if I had to pay hotel rates. Furthermore, I travel as a single and there is much more contact with locals this way. In Prague I had a room in a 2 bedroom apartment, in Madrid I ended up with the whole apt to myself as the woman renting the room herself decided to go away, in San Jose, Costa Rica I stayed with a lovely couple from Canada and I ended up doing things locally with this lady. I feel very isolated in big hotels and don’t see paying those prices when all I want from the place is a bed to sleep. I am not in the city to stay in my room but to be out and about. It seems to me that AirBNB is more like when B&Bs started without the breakfast. I believe in Hawaii both properties are licensed as many people have condos there that they don’t use year-round. I’m all for people being licensed/registered and paying taxes on that income.

    1. Yves Smith Post author

      You seem to fail to understand that your convenience as a traveler is coming at the expense of people losing their homes. This is the “my benefits as a consumer are more important than social costs” writ large. It’s one thing for people to rent condos. That’s always been legal. It’s another thing to break or get housing laws passed to accommodate what amount to unregulated SROs in urban areas that are tight on housing.

      Please read the thread. These properties are in the overwhelming majority of locations not anywhere near well regulated as rentals, allowing the landlords to get away with code and habitation violations.

    2. tegnost

      hawaii, prague, costa rica, madrid yes I’d say you sound pretty needy and I’m sure the only way you afforded those trips was air b’n’b…(sn. off) I’m betting you uber as well and, jumping way out on a limb here, own an iphone with a monthly bill easily surpassing a night in a hotel room, but that’s just a guess

      1. Bea Braun

        Well yes that was rather snarky. When I travel in Europe I visit friends in Germany where I can stay. If we go away together we share a room to save costs. I stay in cheap one Star pensions when I can and as mentioned have tried Airbnb. As a matter of fact I do NOT use Uber, I do NOT have an IPhone I have a cell phone for emergency at $15 /month, I do NOT have cablevision, I do not go out here frequently to dine, I use public transit when I can, so I guess you guessed wrong. My priority IS to travel and therefore that is what my budget reflects.

        1. tegnost

          Then please allow me to beg your pardon. As an occasional renter in seattle (too expensive as of today) I’ve had a room I once rented for 700/mo. turned into an air b’n’b room for 70+ per night, great for landlord, easily double the rent for 2/3’s of the occupancy, also has a social angle because it’s like hosting random travelers such as yourself who are interesting and new. I also have another friend being currently displaced based on the same accounting, more money and don’t need to put up with an aging gardener who struggles to pay what rent she does, and did I mention it’s november? So now we’re basically both homeless unless I can find someplace that is not impacted by the same accounting ($70/ night is pretty much what everyone thinks they’re going to get. I see we have many other things in common, I am also a big fan of public transit, have a cheap stupid phone, and no longer waste time watching tv, so again apologies for generalizing at your expense and I will attempt to be more polite in the future.

  17. Mattski

    San Francisco is like Canada, only liberal in the minds of liberals, who generally run about 20 years behind the facts in their assessment of any social phenomenon. The truth is that black people got run out of the city 25 years ago, and that San Francisco has long since lost whatever soul it has. Hell, the middle class is being run out of the entire state. California turns out not to be a model for anything except vague conspicuous consumption. Especially not agriculture.

    1. jrs

      Where is an example for agriculture? The whole midwest is corn and soybeans, all GMO etc.. A few states have some small farms, but then California has *some* small farms, it’s not the majority of agriculture.

  18. b1whois

    I live in nearby Sacramento, and our City Council is looking at regulating airbnb now.
    We also have a problem with affordable housing in our city, but in January our mayor Kevin Johnson (yeah, that guy) put forward an affordable housing initiative that seeks to build 10,000 units in downtown Sacramento over the next 10 years with a mix of 60% market rate, 25% workforce rate, and 15% rapid rehousing for homeless individuals. I was at the City Council meeting where this was discussed, and there was concern that the developer fees were set too low to finance the program.
    The whole program is wrapped into making our new Golden 1 Center (arena for the Kings basketball team that has much public subsidy, but was voted down previously by residents and then the city council moved to block another vote from reaching the ballot, because “father knows best” attitude) a successful and profitable addition to our city. There are all kinds of crazy projects (aka Trolly Folly) here to drive speculation so that they can point later and say “see, we were right to not listen to stupid voters who were against public financing of a sports arena – look at all these shiny things!”

  19. McWatt

    I was in San Francisco last week. It is now the New York City of the West. People are on the streets 24/7.
    It is really crowded. Our hotel was sold out on a Sunday night!

    The Airbnb concept goes against any city trying to protect it’s citizens and neighborhoods and regulate housing equality. In Stratford-upon-Avon in 1597 the number one concern was over crowding in single family homes and transient people seeking housing. They wrote a law: one family one home.

  20. tommy strange

    The alter net article is horrible. I complained over there. His headline and led, without doubt leave the impression that ‘most of sf voters voted against I and F”. This is the most off election there is in SF. He couldn’t even look that up. The mayoral election has always been held like this, due to strong real estate developer influence and control of the democratic party, because (liberal) conservative voter turnout is disproportionate to population lower the turnout. NC readers know this. It usually is not more than 25%, and that is of registered, not population.
    Morning after numbers said F lost by just 13,000. That’s not bad considering, as he did state, the entire democratic party was against, outside a few of our supes.
    Which brings us to most glaring two points he intentionally or stupidly left out. Peskin won. Now there is majority of district elected supervisors on the board that are all pro tenant, anti air BnB illegality, and against the massive use of the Ellis act to clear out the working class. The board can override the mayor with a majority, and actually make their own laws with enough of a majority against the mayor. This may or may not happen. The other point not made is that 123 voting of complete no bodies against Mayor Lee (none of whom seem even a bit ‘left’ of the usual top dog democrats) actually got over 30% of the vote. Think about that.
    I think it is very easy to extrapolate with historical facts in all cities, that if this election was held at a normal time (say presidential or congressional) I and F would have passed, and a decent left candidate (say like Amiano, or Gonzalez) would have stepped up and beat Lee. (Willie Brown would have been beat first re election no doubt)
    This writing is typical of liberal blogs though, salon and huff post. Where the majority that vote suddenly represent the majority of the people. No matter the turnout, no matter what right wing crap democrat was forced upon the people as the ‘choice’. etc. This goes back to Franks deeply flawed ‘what’s the matter with Kansas.” Most liberals to this day, will tell you that the majority of white workers vote republican. Har. A majority of the white working class does not even vote!!!
    As far as what is happening here. I’ve lived here for over 25 years, mostly in the Mission. It was affordable from early 1960’s to mid 1990’s….(of course not for blacks up through the 70’s, but that is a different subject) . What happened? Well, as NC readers know, private developers have never built affordable housing for workers, unless massively subsidized in some way. Never, not in one city in the USA for one hundred years. We have always found affordable housing in the old stock. And that is what people moved into from the 1960s to 1990s. The huge federal subsidy that paid to move white people from cities, along with accelerating deindustrialization of cities…left great prices and vacancies for those of us who moved in. But by the mid 90’s , as Clinton destroyed the one for one rule, and as federal funding per capita to cities for real dense housing dropped (and cut again by Brown and Obama) has been a squeeze everywhere. And since all democratic mayors of all cities have been ruled by real estate developers, and can only increase their budget via property transfer taxes and rising real estate value, the fix is nearly insurmountable as long as federal funds keep drying up.
    I will go on and on…so lets just state some facts.
    Only 60% of the tenant housing in SF is rent controlled. Rent control has nothing to do with rising rents. If so, what about Oakland, NYC area, and even poor New Orleans has seen a 20% to 30% rise. Etc etc. Boston? London?
    The state passed the Ellis act to specially target the working class in SF, and Berkeley. (How many democrats you hear talk about Ellis? pfft.) It means anyone can buy a rent controlled house and evict everyone and then sell it floor by floor or as a house. This, and OMI’s, is what makes up the bulk of large units on Air BnB. There have been studies that show over half the large Air BnB spaces are the result of forced evictions, either through buy out (which is force, cuz if you don’t take a large buyout, here comes the Ellis anyway) or Ellis or OMI. So double illegal. Illegal hotel, and illegal use of the Ellis Act and OMI.
    The per captia income (don’t use household income when talking about cities please- census hires very often will count a whole flat of 4 or more individuals as a ‘household’) has a majority of us still below $50,000, and a poverty rate at 15%. The working class is still here. Please commentators show some damn solidarity for us and oakland. Please do not read Solnit articles to get ‘facts’ about where the hot money is coming from.
    At least 30,000 people have been forced out in just six years. Already the mission district, even with much condo building is less dense people wise. Workers fill these flats with 4 or more people. The speculators maybe two per floor if that. Very often empty. There are for rent signs for months across the street from me now. Why are they empty? Because they are demanding near $6,000 per floor. On Folsom and 24th street. So not only is this unbridled greed, but a system completely legislated by the democratic party, completely fueled by the federal government, and of course fueled by hundreds of billions of private capital, not only by tech companies that bus employees here, buy tons of property here with their hot money, while getting tax breaks. We are screwed, and passing I and F would have been a bit of relief, but in no way fix anything. It’s systemic, and part of the great new world order. Only the threat, at least of revolutionary organizations will put a ding in this armour.

  21. tommy strange

    one add please.
    People, usually not city living, mistake a housing unit for a place for one or two people.
    A unit in San Francisco as in NYC, and etc, can mean a flat where four to even 10 people may have lived. So when you read Air BnB units, that flat that rents out as a hotel for two rich people for a night, once could have been a long term home for an entire family. The many victorians where I live after evictions, will be listed as one unit (the whole house, though it once had three floors, so then a total of 12 or more people in good times) or three as a TIC or condo for each floor. A unit in a city could have been a whole group of peoples homes. That’s important to consider. And puts the obvious lie to build more condos and density increases. The opposite happens.

  22. minka99

    We are long term San Franciscans and we voted against it, mainly because it prevented doing AirBnB completely for inlaw units. I support restricting AirBnB to prevent housing units being absorbed by tourists. But for us personally we don’t have an inlaw and to put one in (for family) we could pay for it this way. It seemed like overreach to us. Yes that is a problem with the initiative process.

    1. jrs

      And people are right to be wary, vote for any initiative if it seems to be doing good no matter the overreach is exactly why CA initiatives have been bad, though I still favor direct democracy over the plutocratic representative type.

    2. Yves Smith Post author

      Huh? Why are you charing for inlaws for short term stays? I’d never do that in a million years. Honestly, I have trouble believing the scenario you are positing (as in these people are really “inlaws”).

      And if they live with you longer term, they are roommates. I don’t know about SF, but there’s never been an issue with that in NYC, as long as you don’t charge them more than their pro-rata share of the rent.

      1. low_integer

        If I’m interpreting this correctly, an ‘inlaw unit’ is similar to what we in Australia call a ‘granny flat’, essentially a small living area on the same property, but separate from, the house/main living area. I think what minka99 is saying is that if they built an ‘inlaw unit’ for family to use sometimes, they would not be able to list it in AirBnB (when it was not being occupied by family) to offset the cost of construction, due to the fineprint of the regulation being voted on.

Comments are closed.