San Francisco

San Francisco's Threat to AirBnb a Threat to the Entire Sharing Economy

New law could jail employees of Airbnb for actions of users.

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It's ironic that San Francisco, the city so closely identified with the burgeoning sharing economy, would be defending an onerous law that undermines one of the tenets that enables these web-based companies to flourish. It's the latest example of the city's hostility to the companies that buoy its economy.

San Francisco officials recently passed a law that's meant to crack down on residents who improperly rent out their properties as short-term rentals. A previous law allowed property owners to rent out their homes and apartments, provided they follow myriad regulations and limitations. One rule: They must register with the city.

"Enforcing this law has been tricky, so the city's Board of Supervisors recently passed an update saying websites like Airbnb can be punished if people listing homes on their sites haven't registered with the city," according to Bloomberg. This rule targets room-sharing companies, but if the approach takes hold, it could pose a threat to any internet company that connects buyers and sellers. Anaheim's draconian approach—banning room-sharing businesses—is unreasonable, but San Francisco's threatens the entire sharing economy.

The same city that can't fix its bureaucratic business registration process is going to fine and possibly jail employees of room-sharing companies for the actions of those who post rooms on their sites. Consider what it would mean if, say, Facebook were liable for anything any of its 1.6 billion users posted.

That's the basis of Airbnb's new lawsuit against the San Francisco law. As the company explains on its blog: "Since 1996, the Communications Decency Act—an important federal law referred to as the 'linchpin of the vibrant and successful internet we know today'—has prevented local governments from holding websites responsible for content published by their users as the city is attempting to do here."

Airbnb argues "the new law violates the federal Stored Communications Act, which creates uniform privacy protections for internet users and prevents cities from simply demanding that platforms turn over user information without a subpoena or other legal process." As the Hill reports, "Airbnb also alleges that San Francisco law violates federal privacy safeguards by requiring them to give up user information without a subpoena. The company is also raising a First Amendment claim that the law restricts speech."

The city said it is not punishing hosting platforms for users' posts. "In fact, it's not regulating user content at all—it's regulating the business activity of the hosting platform itself … It's simply a duty to verify information that's already required of a regulated business activity," according to a city statement published by TechCrunch. But verifying such information, in reality, means being responsible for users' content. Everyone in the new economy ought to hope Airbnb prevails here.

"It is ultimately about corporate responsibility," said Supervisor David Campos, as quoted in the San Francisco Chronicle. "About an industry that has made and continues to make tens of millions of dollars in this line of work taking responsibility for the negative impact that they are having on the housing stock."

It's nonsensical, but many San Francisco officials blame room-sharing platforms for the city's housing crisis. San Francisco has some of the nation's most-stringent housing regulations. The city and Bay Area communities make it enormously difficult to build new housing. Local regulations dramatically drive up the cost of building anything.

In 2014, KALW public radio reported "thousands of (possible rental) units are simply being kept off the market. Some estimate up to 10,000 of these units exist. Many sit unrented because tenants are proving too risky an investment for some property owners." Because of rent control and tenant laws, it's nearly impossible to get rid of a bad tenant. And tenants stay in the price-controlled, below-market apartments as long as they want to stay. Many owners would rather leave apartments vacant than find themselves in a scene from the horror movie "Pacific Heights."

STRs rarely comprise more than a small percentage of a city's housing stock. The problem is the lack of supply. Instead of cracking down on roomsharing, city officials ought to relax rent-control and land-use restrictions and permit more housing development of all types. Maybe San Francisco's leaders ought to stop attacking businesses and take a look at their own policies for a change.

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  1. Just pull out. See how long they can continue to blame AirBNB for the ‘crisis’.

    1. Pulling out ensures they’ll blame them for not supplying the market. It’s like the anti-profiteering law in Florida – used to be after a hurricane people would load up truckloads of cheap supplies and drive down there to sell them at a big mark-up but now that’s illegal so people can only load up truckloads of cheap supplies and run down there and sell them at no mark-up. Big surprise – there’s not a lot of people willing to lose money driving to Florida and selling stuff at no profit because Georgia folks are all evil greedy bastards who don’t realize they should be selling it for less since getting to drive to Florida is payment enough for the plywood.

      I actually saw a version of this at the little store near me where a guy was complaining about milk being $6 when Kroger sells it for half that. When the owner asked him why he doesn’t go to Kroger, the guy said well, Kroger’s 15 miles away. Okay,said the owner – you’re not just paying $6 for milk, you’re paying $3 for milk and $3 for having the milk right here instead of 15 miles away. Now buy it or fuck off.

      1. Goddam middle men taking money while providing now value.

        1. Now value? hey, for 3 dollars an article I will proof read for you.

  2. In 2014, KALW public radio reported “thousands of (possible rental) units are simply being kept off the market. Some estimate up to 10,000 of these units exist. Many sit unrented because tenants are proving too risky an investment for some property owners.”

    Maduro knows exactly what you mean. Those fucking kulaks and hoarders and capitalist wreckers just ruin everything.

    1. Fear not, they will do what France does: tax vacant apartments.

      1. VAncouver is thinking of doing the same.

  3. How dare these property owners exercise their property rights without paying the government!?!!? Now I’m pissed

    1. Did the owners hold a neighborhood meeting and ask everyone within a quarter mile radius if they consented to these plans? I don’t know what the property owner could have been thinking, it doesn’t sound like the democratic process was followed.

      1. being SF, I assume the signing of The Social Contract is an actual event that takes place in realspace, so those property owners knew the risk of imprisonment and confiscation of property that they were getting into.

    2. Property rights? What’s that?

  4. “Many sit unrented because tenants are proving too risky an investment for some property owners.”

    This couldn’t possibly have anything to do with California’s insane level of tenant rights…

  5. I like San Francisco. I have family and friends there and visit them often. And boy does the Bay Area have some great restaurants! But here’s what I don’t understand — why do San Franciscans have such a hard-on for the Golden Gate Bridge? It’s just a bridge for FFS. For my money (and the do charge ya) the view coming into the city on the Bay Bridge is a much more beautiful sight.

    EOM

    1. SF charges you to drive into the city on the Bay Bridge, too.

      1. They do that for all the bridges, but you don’t have to pay tolls when you use them to leave San Francisco.

  6. “San Francisco’s Threat to AirBnb a Threat to the Entire Sharing Economy”

    I’m pretty sure that threatening the entire sharing economy is the intended consequence.

  7. You’re asking progressives to think rationally. good luck with that.

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  9. RE: San Francisco’s Threat to AirBnb a Threat to the Entire Sharing Economy
    New law could jail employees of Airbnb for actions of users.

    One should not be surprised that SF is threatening to jail employees of Airbnb for their nefarious capitalist practices that oppress the masses. One only has to look who they elect every two years to the Politburo as a guide on how these progressive in SF people think. One must applaud SF for their intestinal fortitude to oppress a big business enterprise and hopefully make extinct as a dinosaur. This way there will be more unemployment, more dependency on The State and a message sent to all sinister capitalist pigs everywhere that they are next.
    Aren’t penthouse progressives wonderful?

    1. You forgot to mention, that the SF politicians collect gobs of cash from the taxi fleet medallion owners, to keep out the competition, to keep rates high, and to line the owner’s pockets (the taxi drivers aren’t the beneficiaries, because the government limits the number of taxis on the roads, and their competition).

      Politicians are finding it harder to control the sharing economy, because while they can control who paints their car as a taxi and then can control what they taxi can do, they can’t stop people from using their own vehicles and offering rides to others. That commercial freedom is too much for the commerce skimming politicians.

  10. Only the government is allowed to offer a solution to the problem that the government itself created.

  11. I have difficulty feeling much sympathy for Airbnb or Uber. They continue to invest in a city that has targeted them for extinction. If they continue to bend over and take that treatment rather than find a better business climate, they deserve to be destroyed by their progressive buddies.

    1. The progressives aren’t Uber’s and Airbnb’s buddies. Airbnb are actually fighting OUR fight to keep OUR freedom to rent out OUR homes for short term rentals. They are fighting these facist control freaks, because if one city develops a way to keep them out, then so will all the other Democrat controlled cities, along with all the RINO controlled cities. Those politicians don’t like commerce when they aren’t in the middle collecting taxes for giving us the OK to rent, rather than us having the freedom to do with our private property as we believe best for us. Plus they like to be in the middle, to collect campaign cash from the big players in the market, by making rules that benefit one firm at the expense of the others.

      1. LOL! You’re funny. The employees and founders of Uber and Airbnb are some of the biggest donators to Bay Area progressive Democrats and associated organizations through enormous amounts of donations.

        Plus, they keep the city’s coffers flush with cash by paying all the associated payroll and property taxes that the Board of Stupidvisors need to continue their jihad indefinitely.

        If Uber, Airbnb and other businesses targeted by SF were to leave, the city would be starved of cash. Instead, they stay and ensure the city is richly funded AND continue to provide extensive funding and support for the political party that runs the city.

        As for “Democrat controlled cities,” they all suck, and the success of a sharing economy business in blocking one city won’t dissuade the others from taking a shot. If these guys want to succeed, they should start investing with their friends and allies, and stop providing cash flow to their enemies. The fact that they continue to invest in their enemies means they’re providing the resources being used to destroy them, and I’ll have no sympathy when their “friends” finally succeed in destroying them.

  12. I wonder how the MSM would respond, if government made laws making the MSM responsible for user posts, user advertisements, and reporter columns subject to criminal prosecution when those ports/reports aren’t accurate.

    Where we were free to speak, the government keeps encroaching, especially on commercial speech, so they can control commerce. That allows them to pick winners in commerce, not based on how good they are, but instead based on who’s the richest 1% contributor to the politicians doing the choosing.

  13. Ironic? It’s not ironic in the least; San Francisco is known for being the most hard left city in the country. Leftists simply DON’T DO private property, entrepreneurs, nor free market.

  14. reminds me of drug testing…

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