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Airbnb Hates San Francisco's Rental Regulation Proposal — And Is Spending Millions to Kill It

Airbnb is not happy with Proposition F, which would limit the number of days owners could rent their properties on short-term rentals and grant neighbors the right to sue.

by Reuters and VICE News
Nov 2 2015, 5:30pm

Photo via Steve Rhodes/Flickr

Airbnb is not happy about a San Francisco ballot proposal being voted on tomorrow and has spent more than $8 million and hired a top political operative to defeat it. 

San Francisco residents are going to the polls on Tuesday to vote on Proposition F, which would restrict short-term rentals to 75 days maximum per year and give neighbors greater power to sue rental property owners who rent out their property for long periods. The initiative was brought by affordable housing advocates who were fed up with the city's limited housing being used as rentals for tourists while residents face skyrocketing rents and evictions.

At stake is Airbnb's ability to continue adding rentals at the same speed, increase revenue and maintain its $25.5 billion valuation, all of which fall under greater scrutiny as it moves closer to an initial public offering.

Related: Airbnb Will Probably Get You Evicted and Priced Out of the City

Airbnb's multi-million dollar campaign against Proposition F seem to be working. An Airbnb-funded poll conducted last week found 55 percent of respondents planning to vote against the measure.

But the company's orchestrated effort also suggests how fearful the company is of any potential regulations. The company has employed tactics used by seasoned political operatives and has outspent its opposition by nearly 30 times.

"It doesn't want to give (regulators), or community activists, ideas that they can take on Airbnb," said Henry Harteveldt, founder of travel research firm Atmosphere Research Group.

Airbnb used the battle to craft its playbook for other political challenges, said Chris Lehane, the company's global policy chief.

In San Francisco, Airbnb spent almost $2 million on a PR campaign that included organizing more than 400 volunteers to knock on doors and spread its message.

"It will inform us of not only how we work in San Francisco but around the world," said Lehane, a political strategist who managed scandals during the Clinton administration.

Related: Airbnb Really Pissed People Off in San Francisco with These Tone-Deaf Ads

For Airbnb, a leader in the "sharing economy," a defeat in its hometown of San Francisco, would be mostly a symbolic blow. There are about 5,000 Airbnb rentals in San Francisco, compared with about 20,000 in New York or 60,000 in Paris.

But if similar measures are introduced elsewhere, the company could face serious financial consequences that would effect its overall valuation.

The Proposition F campaign, which raised about $300,000 from hotel unions and affordable housing advocates, has discussed its proposal with officials and housing advocates in New York — whose city council is weighing restrictions on short-term rentals — Chicago, Los Angeles and other cities, said coalition co-founder Dale Carlson.

Proposition F reflects the broader issue of affordable housing, or lack thereof, in San Francisco. Rents have soared as technology companies flocked to the city in recent years, pushing out many long-time residents who can no longer afford the cost of living. In addition to Proposition F, San Francisco residents will vote on 11 other measures and candidates on the ballot on Tuesday, many of which revolve around the question of affordable housing.

Photo via Flickr