By Mia Satya, BA Public Policy expected 2016 
One of the most hotly debated ballot propositions of 2015 pitted Airbnb hosts and lobbyists against affordable housing groups and displaced residents. San Francisco’s Proposition F would have capped private short-term rentals 75 nights a year and strengthened enforcement mechanisms. What got considerable flack from the opposition was the provision that neighbors could file complaints with the City (or lawsuits in court) if neighbors were breaking the law. While this felt like an extreme measure to 55% of voters, 45% of voters felt we have a shared responsibility to protect our neighborhoods from turning into hotels, and our City a playground for the elite.
Airbnb pumped over $8 million into opposing the proposition compared to $1.5 million donated by community groups to pass the legislation[1]. In the weeks preceding the election, Airbnb erected tone-deaf billboards implying that San Francisco should be thanking them for paying taxes, as if taxes are a gift bestowed. How Airbnb presented themselves in the Proposition F campaign tarnished San Franciscans’ image of the company and painted the tech industry as out of touch with San Francisco values.
Many San Francisco residents are upset that Airbnb has taken more than 350 residential buildings off the market by allowing “hosts” to rent their units solely through them. At any given time 5,000 units are currently available on Airbnb that could be housing permanent San Francisco residents[2]. To put this in context, if the entire $310 million housing bond that passed in the same election was allocated to build new units to replace Airbnb rentals, The City would only be able to afford at most 155 units, whereas over 350 entire buildings have effectively disappeared.
Supervisor Jane Kim released a Fair Sharing Economy package of legislation that responds to San Francisco’s need for a more equitable housing portfolio. Full disclosure: I was Supervisor Kim’s first appointment to the Youth Commission back in 2011 and I’ve been proud to work with her to make housing more affordable.
The first part of her legislation is the Ultra Luxury Housing Fee. This fee will increase the transfer tax of condos and houses that sell for more than $5 million by .25% and will create a new category for properties that sell for over $25 million[3]. The funds from this tax will generate an estimated $30 million in the first year alone that will be used to fund schools, health care, housing, and MUNI.
While I personally think that the increased funds should only be allocated for affordable housing, I know that wouldn’t be politically feasible. New taxes that are allocated to a specific purpose need a super majority, or 75% of the vote compared to taxes that go to the general fund which only need a simple majority of more than 50%. If the legislation mandated that all of the new taxes were to go to housing, the measure could get 55% of the vote and still fail like what happened with San Francisco’s Proposition E Soda Tax initiative in 2014 . I don’t see opponents being able to create a message against the Ultra Luxury Housing Fee, as even many tech workers are now unable to afford to live in the City. We need this legislation to pass because developers are making millions off of the real estate bubble, while many San Franciscans including nurses, teachers, and MUNI drivers can’t afford to live where they work..
The second piece of the Fair Sharing Economy package is an increase in the hotel tax from 14% to 15% which would again pit housing advocates against Airbnb with the added strength of the hotel industry . Unfortunately, the last ballot proposition proposing a 2% increase to the hotel tax and closing a loophole for discounts when booking online ultimately failed. That tax increase only received 45.5% of the vote in 2010. Since then, housing prices have skyrocketed and created massive displacement. This has been at the forefront of every conversation I overhear in restaurants and at the grocery store.
Many people saw Proposition F as a referendum on the sharing economy, and although the community groups officially lost to Airbnb in the first round, the voices of San Franciscans were heard loud and clear. There’s no doubt in my mind that if both sides were given $5 million dollars the restrictions would have passed. Many residents of all income levels are eager to create fair and equitable solutions to the housing crisis. I am confident that Supervisor Kim’s package will pass not only because voters support affordable housing, but because she is a powerhouse. Supervisor Kim was instrumental in securing 40% affordable housing for the 5M project, making “40 the new 30” for affordable housing standards[4]. The San Francisco Board of Supervisors now has six strong supporters of affordable housing. I know that housing advocates, community groups, and concerned citizens won’t stop until we can create housing options for all San Franciscans.
[1] Griswold, Alison. “After Offending All of San Francisco, Airbnb Still Trounced the Hotel Industry on Election Day.” Slate. N.p., 4 Nov. 2015.
[2] Said, Carolyn. “Window into Airbnb’s Hidden Impact on S.F. – San Francisco Chronicle.” San Francisco Chronicle, 1 June 2014.
[3] Morse, Jack. “Jane Kim Looks To Increase Taxes On Short-Term Rentals, Hotels.” SFist. 8 Dec. 2015. .
[4] Elsen, Tracy. “Is 40 Percent the New 30 For BMR Housing at Treasure Island?” Curbed SF. 9 Oct. 2015.