Short-term residential rental regulations in San Francisco are intended to protect the City’s housing supply for long-term residents and preserve neighborhood character by limiting the type of units and length of time a unit can be rented for short-term use by tourists.
Under San Francisco Administrative Code Chapter 41A, a short-term residential rental is a rental of all or a portion of a home for periods of less than 30 nights. A permanent resident may offer their primary residence as a short-term residential rental if:
Dedicated affordable housing units, including below market rate (BMR) units; as well as student dormitories, and those residential units approved as Accessory Dwelling Units (ADUs), are ineligible to register for short-term rental use. In addition, if a property features multiple residential units, short-term rentals may only be hosted in the same residential unit where a host also resides at least 275 nights per year.
The City’s registration system is tied to both the individual residential unit and the current host (whether the property owner or a long-term tenant), which allows hosts to use short-term rental websites and to register their rentals with a business license and a short-term rental application with a fee of $250 (for a two-year certificate period).
An eligible short-term rental host may offer/host up to 90 cumulative nights of un-hosted (where the host is not also present overnight) of short-term rentals per calendar year. While there is no limit on the number of nights a host may offer “hosted” short-term rentals (where the host is also present overnight in the same residential unit), a host may not offer more than five simultaneous short-term rentals at the same time (e.g. no more than five different bedrooms being rented as private room offerings to five different tourist couples at the same time).
Unregulated short-term rental activity can result in residential units being converted to de facto year-round tourist use. This can lead to the loss of long-term housing availability and issues such as:
Prior to 2014, all short-term rentals were prohibited by the City’s Planning Code. However, the City was continuing to experience a sharp growth in illegal short-term rental activity. In February 2015, the City began registration of short-term residential rentals, allowing for limited short-term rental activity, for hosts who were permanent residents of the eligible residential unit. However, compliance was very limited, and the City continued to conduct enforcement primarily on an individual property basis, with limited impact on reducing the overall number of illegal short-term rentals.
The City later amended the short-term rental rules in 2016, to require hosting platforms to remove illegal listings that were involved in the operation of unpermitted short-term rentals. Those rules were challenged in Federal court, and a settlement agreement took effect in 2017 that resulted in the removal of many illegal listings. This included the removal of a significant number of listings that represented full-time and part-time tourist use of rent-stabilized apartments, affordable housing locations, commercial/industrial properties, and high-volume operators in single-family homes. The implementation of the settlement agreement also resulted in a surge of applications to legally host short-term rentals, as hosts found most of their short-term rental revenue curtailed due to de-listing of online offerings for short-term rental activity.
Prior to the settlement agreement that went into effect in 2017, short-term rental platforms were not obligated to ensure that listings were legal and properly vetted. After the settlement agreement went into effect, the City implemented an online registration system to require hosts to register their short-term rentals. The implementation of the agreement gives the City the ability to require hosting platforms to remove listings and cancel pending reservations for individual applications that have been denied. The settlement agreement allows the City to subpoena a short-term rental platform for more information about a host and the use of the host’s rental if necessary.
The existing legislation limits OSTR’s flexibility in its approach and operations. Any suggested changes to the existing legislation may trigger a new legal process.
The primary challenge OSTR staff encounters are the overall volume of pending short-term rental applications (over 1,000 pending applications as of fall 2019). As the 2017 settlement agreement allows hosts to offer short-term rentals while an application is pending, this results in a few hundred residential units being used as de facto tourist units, and typically represents a loss of long-term housing availability.
A smaller portion of applications are denied due to the unresolved building and planning code complaints (including overcrowding issues with six to sixteen bunk bed hostel operations), the use of unpermitted commercial or industrial spaces; and the use of affordable housing units and Accessory Dwelling Units that are not eligible for registration.
The City’s short-term rental law does not allow OSTR staff to deny a registration due to a prior owner move-in eviction; and the City’s ability to deny an application based on a prior Ellis Act eviction (a provision of the City’s short-term rental law) is currently under separate legal challenge.
The Rent Board has the most accurate data on whether a unit is rent stabilized or not. If a registrant does have a rent-stabilized unit, it is still difficult to confirm whether profits made from short term rentals do not exceed the rental amount as regulated by the rent-control ordinance.
The largest percentage of all registered STRs lie in areas where most households are moderate- to high-income. Census tracts with a higher number of STRs also have a more frequent occurrence of owner-move in (OMI) evictions. No regulations exist for listing a unit as a short-term rental if a non-Ellis Act eviction has taken place at the property in the past. OSTR staff have observed illegal short-term rental activity involving false assertions of residency by property owners at properties where there was no reported OMI eviction, but a prior long-term tenant was either paid a small sum of money to vacate, or the tenant felt they had little recourse to challenge the threat of eviction.
In November 2018, City Attorneys secured $2.25 million in penalties and investigation costs from two property owners who illegally rented out 14 apartments on a short-term rental listing website. The case was initially brought to the City’s attention when, in 2014, the same property owners evicted tenants from their property and then converted the units into short-term rentals. The City had prohibited them from maintaining their properties as short-term rentals. Although none of the units were registered with the OSTR, which is another violation, City investigators found that all the units were listed on the short-term rental website for two years.
with a portion of those certificates either subject to expiration (certificates are valid for two years), revocation (typically due to the host not being present at least 275 nights per year), suspension (typically due to building or planning code complaints for illegal construction), and hosts discontinuing short-term rental activity.
because it does not appear the host resides in the residential unit for at least 275 nights per year (with the unit often being used as a near full time tourist hotel).
with a fraction of short-term rentals arranged through offline means.
with the Mission containing 13 percent of the total rentals.
Another quarter (26 percent) are in census tracts that are predominantly low-income.
The ideas for future consideration that have the potential to increase community stability in San Francisco are described below. They provide a starting point for agencies, decision-makers, and community members to explore stabilization efforts and identify critical pathways forward. Based on preliminary information, staff is qualifying these ideas according to the type of task, scale of resources and level of complexity to underscore that any of these ideas would require time and additional resources not currently identified. These are not City commitments or recommendations, rather informed ideas that will require careful vetting and analysis as to their reach, resource needs, feasibility, unintended consequences, legal implications, and racial and social equity considerations.
As the program progresses, continue to research and monitor the effectiveness of existing legislation. OSTR could conduct an internal audit or use the Controller’s office’s auditing services to ensure that the existing legislation remains effective as time goes on and new services and/or platforms are being created for the short-term rental mark.
| Type of Response | Mitigation |
|---|---|
| Type of Task | Policy Implementation, Data |
