San Francisco enacted an ordinance effective February 1, 2015 legalizing short-term rentals in the city. Before this, San Francisco banned residential rentals of less than 30 days in multi-unit buildings—a ban that effectively made most Airbnb-type rentals illegal (although the law was rarely enforced). However, the law imposes a number of restrictions on short-term rentals; this article summarizes the major ones. You can read San Francisco's Airbnb ordinance online, and the city has created a Short-Term Residential Rental Starter Kit with detailed guidance. San Francisco has also established an Office of Short Term Rental to enforce the law.
The ordinance applies to all buildings containing one or more residential units that are owned or rented by individuals who are permanent residents of San Francisco. This includes owners or renters of single-family dwellings (the initial version of the law excluded single family homes, but this was later changed). All such individuals must reside in their units for at least 275 days per year. Absentee owners who live in San Francisco less than 275 days per year are not eligible to engage in short-term rentals.
An owner of a multi-unit building, may only register and rent the specific residential units in which he or she resides. However, bedrooms may be rented and listed separately.
The law limits rentals where the host is not present in the unit to a maximum of 90 days per year. Violators who continue to rent out their apartments beyond the 90 days are subject to a daily fine of $484 for first offenders up to $968 for repeat offenders.
“Hosted rentals”--rentals where the host is present in the unit--are not subject to this limit.
The law does not require hosting websites such as Airbnb to track how many days a year a unit listed on its website is rented or attempt to enforce the 90-day rule through booking restrictions. Instead, individual hosts are supposed to keep track themselves and self-report the number of days a unit is rented as a short-term rental on January 1 of each year.
A recent survey conducted by the San Francisco Chronicle found that close to 5,000 San Francisco homes, apartments, and private or shared rooms were for rent via Airbnb, and of these two-thirds were not hosted rentals.
Permanent residents are allowed to rent out their primary residences, but not locations in which they don’t live, or second or vacation homes. This prevents landlords from evicting tenants to create full-time hotels.
Hosts are required to register and obtain a permit from the Office of Short Term Rental, and pay a $250 fee every two years. Such registration must be done in person. Hosts will also need to obtain a city business license. Short-term rentals will be listed and tracked by the city in a registry. The registry listings are available to the public, with the permanent resident names redacted.
Hosts are required to be covered by liability insurance with at least $500,000 in coverage. Alternatively, they may offer their units for rent through a hosting service that offers at least this much coverage. Airbnb, for example, automatically provides hosts with $1 million in coverage. Hosts must also promise to comply with all applicable city building code requirements. Hosts are also required to post a clearly printed sign inside the front door of the unit showing the location of all fire extinguishers in the unit and building, gas shut off valves, fire exits and pull fire alarms.
Hosts who are tenants are not allowed to charge their guests more rent than they are paying to their current landlord. Tenants who violate this provision may be fined up to $1,000 per day and could have their units de-listed.
The 14% San Francisco hotel tax--called the "Transient Occupancy Tax"--must be collected from renters and paid to the city. All hosts must register with the San Francisco Treasurer and Tax Collector and obtain a business registration certificate. Hosts who list their rental through a "qualified website company" need not collect or remit the hotel tax themselves--the rental platform can do it for them. Currently, Airbnb is the only qualified website company that collects and pays such taxes for its hosts. Hosts that don't rent through a qualified website company must collect and remit the hotel tax themselves. Any such host who earns more than $40,000 per year must obtain a certificate of authority to collect taxes from the Treasurer and Tax Collector the and pay the tax monthly; others may pay the tax annually.
The San Francisco ordinance requires hosting platforms such as Airbnb to notify their hosts of the city’s law.
The law does not affect lease restrictions against subletting. It also requires tenant to notify their landlords before they engage in short-term rentals of their units. If a lease agreement prohibits subletting, a landlord may evict the tenant. However, a tenant must be given 30 days' notice to cure a first violation before an eviction is allowed.