Airbnb is fighting in Washington to get legal cover for its business of helping people rent out their homes, apartments, and couches to strangers.But it’s also facing a struggle in its hometown of San Francisco, despite backing from Mayor Ed Lee, and the president of the Board of Supervisors, David Chiu, the San Francisco Chronicle reports. There, the issue is the way Airbnb rentals have taken long-term rentals off an already tight market.
The law is pretty clear.
According to Chapter 41a of San Francisco’s Administrative Code—which we actually read—renting an apartment or home for less than 30 days is straight-up illegal in San Francisco unless you get a bed-and-breakfast permit or jump through other arduous bureaucratic hoops. Violators may face a fine of up to $1,000 or six months in jail.
(By the way, if you’re a renter, subletting your place will likely violate your lease and can get you evicted. and the law is silent, as far as we can tell, about the notion of renting a room or a couch in a private residence.)
San Francisco’s Board of Supervisors is considering changing the law. Lee and Chiu are pushing the buzzword of “collaborative consumption” to cover notions like Airbnb rentals and services like Getaround, which lets you rent out your car.
The problem for Airbnb is that it’s basically relying on Mayor Lee and Supervisor Chiu’s clout to push through changes. (Airbnb investor Ron Conway was a major backer of Lee’s election campaign.) But the city’s political environment is extremely fragmented and driven by interest groups like the San Francisco Tenants Union and the Telegraph Hill Dwellers which—no surprise—hate the idea of Airbnb.
If Airbnb has any hopes of getting a legal change through, it’s going to have to arduously court those groups—not just the mayor and supervisors.
In the meantime, though? Airbnb rentals are going to keep happening under the radar. They’re too hard to police, and one thing Lee and Chiu can do is rein in any attempts to enforce the law.
It reminds us of PayPal’s strategy back in the day. The payments startup just started moving money around without all of the money-transfer agent licenses it needed. It eventually got in compliance with the law, which was a bureaucratic, state-by-state nightmare.
If it had waited around to get those licenses first, another startup might have beaten it to the market. But it’s not like PayPal was in that much danger. Any attempt to shut it down would have faced a chorus of complaints from eBay sellers who’d already come to depend on the service.
The political challenge for Airbnb is that hosts may be reluctant to speak up in its defence—since that would call attention to their own violations. Meanwhile, its critics have already proven themselves to be noisy.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.