I Have Read Prop F, and It Is a Perfectly Normal and Reasonable Piece of Legislation

This post is my response to an article on a Medium blog entitled “I Have Read Prop F, and It is Worse Than You Think.”  The author of the article, a blogger who goes by Emey, says he is a concerned citizen drawing attention to a local issue.  He makes several points about the proposed legislation, each of which I address below.  As I will point out in great detail, the author’s analysis is uninformed at best, but I believe it much more likely to be deliberately misleading.  The author misrepresents the law in very specific ways. He goes to great trouble to detail parts of the law and imagine unreasonable, worst-case scenarios while skipping completely over the parts of the law that address his concerns – even when they’re right in the part he’s citing.  It may sound reasonable to say, “I’m all for regulation, just not this one,” but these critiques always use that argument.  As you will see below, Prop F is a well-written, reasonable regulation aimed at addressing a social problem.

So let’s get into it.  First of all, there’s nothing unusual, sloppy, or “draconian” about Prop F.  Most importantly, every single restriction in here – other than registration and reporting – is completely invalid so long as the residential unit is rented for only 75 days or less during the year.  If you put your home on Airbnb and rent it for 70 days, there is no problem at all.  This law is actually a great compromise.  If you’re going to be traveling some during the year, by all means, rent your home and make some money.  If you’re renting your “home” out more than you’re living in it, that’s fine, too, but go get a bed and breakfast license, because that’s what you’re running (getting a bed and breakfast license is also part of Prop F: Section 46A.5(l)(1)(I)).  Having 75 days to rent your home is a perfectly reasonable restriction.  Keeping this in mind, let’s consider the other language of this proposition that the author of the article finds so troubling:

Issue 1

Proposition F: “(a)(1) It shall be unlawful for… any Permanent Resident, person or entity to offer, or to assist anyone to offer, a Residential Unit for rent for Tourist or Transient Use”

The author: “Quite simply, you don’t have to be operating a hotel out of your house to be breaking this law. In fact, it’s really easy to break this law. All you have to do is “assist anyone to offer” a home for a rental of less than 30 days, and you have violated the law! What does “assist” mean? Cleaning a house before guests arrive? Proofreading someone’s listing? Helping a family member find temporary housing? Nobody knows because it’s undefined in the text, even in the lengthy Definitions section. The judge will decide what it means.”

Response: There is nothing unusual about the word “assist” in the law. Laws against assisting people in skirting rules and regulations are very common, for instance, in copyright and patent law.  Importantly, these “assistance” laws all include an element of intent. It is standard legal practice. “Assist” is an important part of any regulation because it allows prosecutors to pursue individuals who, for example, would help the owner of an apartment avoid Airbnb listing regulations by discreetly finding customers in exchange for a cut of the profits. No prosecutor or judge is going to go after you for proofreading a listing or cleaning a house. There’s no intent. Besides, how would they even found out you cleaned a room or proofread a posting? The intent element is the reason you don’t hear about crazy cases in the news where someone does a favor for a friend by backing up a single file off their computer, and then gets convicted of assisting in copyright violation. The author’s concern about this language is just misplaced fear run amuck.

Issue 2

Proposition F: “(f) If the Director determines no violation has occurred, the Director shall, after consultation with the City Attorney, notify the complainant/Interested Party and respondent and shall dismiss the complaint. The complainant/Interested Party may, after notification of the Director’s determination to dismiss a complaint, bring a civil action in an appropriate court against the respondent or any person or any entity that assisted the respondent. A prevailing complainant/Interested Party shall be entitled to an award of actual damages, attorneys fees and costs and special damages of not less than $250 and not more than $1,000 per violation per day.”

The author: “But then it gets absolutely bonkers. If you didn’t host anyone, or it was just your Aunt Rose visiting for the weekend, then your cranky neighbor can still sue you anyway, and the City has to help them do it. And we’re not just talking about filing suit so the City can collect its fines and fees, but filing for “special damages” that the neighbors get to keep for themselves.

Now, even though you’re cleared by the City of any wrongdoing, you’re still on the hook to pay off your neighbor, plus their legal fees. Can you claim any legal fees if you’re innocent? Nope!”

Response: This is wrong on several counts. Rest assured that your neighbor cannot sue you if your Aunt Rose is visiting.  A law granting an interested party the right to sue is another common legal mechanism.  It is called a private cause of action or a private right of action.  It is used in cases where administrative resources are not available for prosecution or where administrative remedies are not necessarily adequate.  It is very common in civil rights law. For instance, if you think you were fired or denied housing because of your race or gender, you can sue your boss/landlord even if the government does not prosecute them.  We take that for granted, but that’s a private cause of action.  Without a private cause of action, when a statute is violated, the only recourse available comes if the government decides to prosecute.  Even if the government prosecutes and wins, depending on the legislation, you might not get a remedy.  The private cause of action allows you to get compensation for yourself.  Here’s how it works in this bill:  If your neighbor notices that you’ve been renting out your place year-round, they can inform the authorities, who can then investigate and impose appropriate penalties.  If the authorities find a violation but decide not to press charges for any reason, your neighbor can do it on their behalf and claim a monetary reward.  The monetary reward is both an incentive for pursuing the case (also standard in private causes of action), and also a way to remedy any damages the neighbor experience.  A person who rents an apartment or buys a condo has a right to know they’re not living in a hotel.  They have a right not to have to deal with strangers in their building who went through no background check and have a much lower sense of accountability and responsibility to the tenants. You’ve heard the horror stories.  How would you feel if your neighbor was renting out their place year-round and making your living situation unsafe?  I absolutely would want some sort of legal recourse, and that’s what Prop F provides.

Ok, so now the worst case scenario that the author is drawing attention to: You rent your place out for one night and your neighbor rats you out.  The authorities find no violation, but your neighbor wants to sue anyway.  Yes, hypothetically, this could happen.  But there are legal penalties for filing frivolous claims.  If they lose this case (and they will because they have no evidence against you), you can get them to pay your legal fees.  Prop F does not say anything about your litigious neighbor paying legal fees for a frivolous claim because that rule is already the law everywhere. Furthermore, no lawyer is going to take up their case because the lawyer will be sanctioned for filing a frivolous suit.  Furthermore again, there is nothing stopping me from filing a lawsuit against your right now for that time you punched me in the face last night.  Sure I could do it, but it didn’t happen, I have no evidence, no lawyer will represent me, I won’t win, and I’ll have to pay all the fees associated with the case.  This is a non-issue.

Continuing:

The author: “You may have heard about the housesitter who rented out a home while the owners were off at Burning Man. In that case, the housesitter already broke the existing law because he wasn’t a permanent resident of the house. But under Prop F, all of those homeowners’ neighbors would have new legal grounds to sue the homeowners themselves.”

Response:  Part of Prop F says this:

46A.5(l)(2)(B): Only one Permanent Resident may be associated with a Residential Unit on the Registry, and it shall be unlawful for any other person, even if that person meets the qualifications of a “Permanent Resident,” to offer a Residential Unit for Short-Term Residential Rental.

Proposition F clearly states that it is illegal for any person to rent the property you are associated with without your knowledge.  A judge or prosecutor would not come after you when it is clearly, according to the plain language of the text, the third party who has broken the law.

But let’s play along, just to illustrate the absurdity of this situation. For starters, there is no epidemic of unscrupulous house sitters secretly renting out homes behind their owner’s backs. (And if you have no problem with strangers staying in your home while you’re away, then why are you paying a house sitter?) But anyway, let’s say you’ve rented out your apartment for 75 nights this year – that’s two and a half months you’ve been away from home this year already – and you have to travel again and you want someone to stay in your home.  You find a house sitter and are unlucky enough to get one who rents your place out.  They go to all the trouble to circumvent the regulatory system put in place (discussed below) and either convince some Airbnb-type company to list the apartment in violation of listing requirements, or through some other source find someone and rent the place.  Somehow, the authorities find out that your house was listed for a 76^th night, or your OCD neighbors, who have nothing better to do and are keeping a detailed record of every single night that you’ve been away and rented your house out, realize that this is the 76^th rental night and report you.  The authorities investigate, and decide to completely ignore the part of the law that says the house sitter is in violation and go after you instead. You are somehow found liable for the infraction that under the law, you did not commit.  If all of these extremely unlikely events occur, you would still be able to sue the house sitter and get them to reimburse you for the fines you incur.  This is once again a standard legal mechanism.  If you, for example, are caused to violate a contract by someone else, you are liable, but you can sue the party who caused your violation for compensation.

Issue 3

Proposition F: “Any Owner or Business Entity who rents a Residential Unit for Tourist or Transient Use and/or any Hosting Platform that lists a Residential Unit for Tourist or Transient Use in violation of this Chapter 41A without correcting or remedying the violation as provided for in subsection 41A.6(b)(7) shall be guilty of a misdemeanor. Any person convicted of a misdemeanor hereunder shall be punishable by a fine of not more than $1,000 or by imprisonment in the County Jail for a period of not more than six months, or by both.”

The author: “But wait, there’s more! How do you feel about criminal penalties? … Six months? That’s, like, barely enough time to be forced into one of the SF jail’s infamous fight clubs.”

Response: Ok, the author’s getting snarky here, and he’s also getting a little sloppy. He actually cites part of Prop F including a reference to another law, 41A.6(b)(7), but despite reading the whole proposition and giving it the worst interpretation, he never actually looks up what 41A.6(b)(7) is.  That’s the remedy section for violating the housing regulations.  Here’s what it says:

41A.6(b)(7) Remedy of Violation. If the Hearing Officer determines that a violation has occurred, the Hearing Officer’s Decision should:

(i)         Specify a reasonable period of time during which the owner must correct or otherwise remedy the violation; and

(ii)        State that if the violation is not corrected or otherwise remedied within this period, the owner may be required to pay the administrative penalties set forth in Subsection 41A.6(c).

41A.6 (c) Imposition of Administrative Penalties for Unabated Violations and Enforcement Costs.

(1)        Administrative Penalties. If the violation has continued unabated beyond the time specified in the notice required by the Hearing Officer, an administrative penalty of not more than four times the standard hourly administrative rate of $104.00 shall be charged for each unlawfully converted unit from the day the unlawful use commenced until such time as the unlawful use terminates.

(2)        Enforcement Costs. The owner shall reimburse the City for the costs of enforcement of this Chapter, which shall include, but not be limited to, reasonable attorneys’ fees.

In other words, if you’re illegally renting out your apartment, and the Hearing Officer finds you liable, AND you refuse to pay the associated fines, you could go to jail.  Don’t want to go to jail?  Then 1) don’t break the law, 2) don’t be found in violation by the authorities, 3) don’t refuse to pay the fines.  I think we can all agree that this is standard practice and reasonable under any interpretation.

Issue 4

Proposition F: “b) Any Permanent Resident offering his or her Primary Residence as a Short-Term Residential Rental shall… submit quarterly reports to the Department setting forth the number of days per calendar year he or she has occupied the Residential Unit, and the number of days per such quarter, with dates and duration of each stay, the Residential Unit has been rented for Short-Term Residential Rental Use.”

The author: “If you host someone in a room in your home for less than 30 days, you best not miss a quarterly report of dates and durations. You’ll be violating the new law. This is just the tip of the iceberg. … You almost can’t not break this proposed law.”

Response:  Notice how the author shifts his language.  The law talks about rentals, but the author uses the word “hosts.” The author implies that if you host your friend for a night, you have to report it.  No you don’t.  If you charge someone for staying at your place, you have to report it.  If you’re renting your home and making money off of it, you have to report it.  This is standard.  You’re running a business, and businesses are always required to keep records.  This requirement sounds more onerous than it really is.  It should be really easy to count how many nights you rented out your place, because there will be a record of it on Airbnb.  If you really are renting your permanent home, then the days of the year you don’t rent the apartment are days you lived there.  If you traveled for a weekend and did not rent your house out while you were away and forget to report this absence, no one is going to come after you.

Issue 5

Proposition F:  “(l)(1)(G) …an Accessory Dwelling Unit may not be listed or rented as a Short-Term Residential Rental”

The author: “Clear as day. In-laws are banned from being rented out. Doesn’t matter if you own one and normally have your actual in-laws stay there, or if you’re a renter with your landlord’s permission who wants to host when you go out of town for a few weeks. It’s banned. If you do it, your neighbor can sue you, and you could maybe go to jail. Why are in-laws banned, even for one night per year? Nobody knows.”

Response: I’ve already addressed the “your neighbor can sue you, and you could maybe go to jail” part. As for in-laws, a very quick Google search explains why in-laws are banned from being rented.  They’ve always been banned from being rented.  Cities enacted this ban for the same reason that cities are trying to regulate Airbnb now: residentially zoned areas are not places to run a hotel business.  For those unfamiliar with in-laws, they are additional units built on a property for the purpose of having another person live in them.  They are called in-laws because, in theory or maybe historically, a married couple would have their elderly parents move in with them.  The couple would build an additional structure so the now-bigger family could have more space.  It is not legal for someone to build an additional structure on their property and run a hotel out of it. It never has been.

Issue 6

Proposition F: “(4)(B) Every Hosting Platform that lists a Residential Unit located within the City and County of San Francisco as a Short-Term Residential Rental… must immediately cease listing in any calendar year any Residential Unit after said unit has been rented as a Short-Term Residential Rental for 75 days during such calendar year”

The author: “I mentioned before that this “Airbnb Law” assumes that Airbnb is and will be the only company offering STRs in SF. As you can read above, this law puts responsibility upon any company that “lists” a rental to know how many nights a private room has already been rented from all other websites (which currently number more than 50 in SF). That’s right, Airbnb needs to know how many nights a room was rented on Craigslist, VRBO, and dozens of other websites, in real time. How would this requirement possibly work?”

Response: A law that institutes a requirement does not generally spell out exactly how that requirement is supposed to be met.  Again, this is intentional.  Why would a legislature want to make its law so rigid?  Usually, an administrative agency, in coordination with the industry it is charged with regulating, figures out how to make a law work.  In this case, right off the top of my head, I can think of two ways that this law can work.  First, rental companies like Airbnb will make their hosts agree to only rent through Airbnb.  The hosts would agree to indemnify Airbnb for any fines resulting from violations of the agreement and of the 75 day limit.  Second, the City of San Francisco (or a separate private business) could agree to create a database of rental unit registration numbers.  When a unit is rented for a night, the rental company records the rental on the database under the unit’s registration number.  Once a unit has hit the 75 day limit, all rental companies remove that unit’s listing.  See? It’s not that hard.  I do understand that when you read an article like the one written by this author, an article that presents Prop F from a perspective of irresponsibility and incompetence, it’s very easy to get the impression that this law can’t work. That’s why I believe that this article was not written by just some guy, but by someone with an agenda. If you read Prop F with a blank slate, it’s easy to see how it can and will work.

Issue 7

Lastly, the author:

“How would this requirement possibly work? It won’t. It can’t. It’s not supposed to. Whether by design or negligence, Prop F is built to fail. I hope the above excerpts have convinced you that Prop F isn’t meant to “reasonably regulate Airbnb rentals,” but to end them. Because of how sloppily it’s written, however, innocent people can also expect to be stuck with nasty consequences, too. And unlike the existing law that was just amended by our elected officials, Prop F cannot be fixed or amended, except by another ballot proposition. So we can do this again in a year after all the consequences — intended and otherwise — seep across our neighborhoods. Or, we could just vote “no” and continue to expect our elected officials to do their jobs. Then the Board of Supervisors can change the law whenever new companies arrive and totally blow up Airbnb’s model, which is inevitable. This is San Francisco, after all.”

Response:  This paragraph just sums up the whole situation.  Prop F is a great regulation. It is a reasonable response, well written, to address a problem.  The prevailing attitude in this country is that government cannot work, that it is inherently incompetent, and that any action it takes must be flawed.  Whether the author has an agenda or is simply misinterpreting this law, this attitude toward government is very clear in how he sees the world and in how he expects other to see it.  And the prevalence of this attitude is quite harmful.  We need government to fix problems that won’t go away on their own.  If government is to work, then it must be able to propose and enact reasonable rules.  It cannot be forced to defend every proposed or passed piece of legislation against every conceivable misapplication, no matter how extremely unlikely it is to occur.  Laws like Proposition F can help us address and solve problems in our world. If people vote Yes this fall, and I strongly recommend they do, I hope that everyone will take note of what the law does and gain more faith that the system can work in our favor if we let it.