Proposition F Defeated In San Francisco

Proposition F was a ballot designed to give locals the chance to decide whether or not short-term room rentals, like those generated by the Airbnb app, were partly responsible for driving up property prices and shortages in the city. Had the motion been passed short term lets would have been reduced from 90 days per year to 75, and many thought that could be just the beginning.

San Francisco is noting a significant housing crunch. Many Proposition F supporters suggested that organisations such as Airbnb remove long-term rental units from the market, making it harder for domestic tenants to find suitable and affordable homes. Santa Clara University law professor Margaret Russell said: ‘A lot of people think that San Francisco is becoming a rich person’s city and their argument is that this is taking away housing stock from tenants.’

There were opponents to Prop F, however, with many saying that short-term lets, such as those available through compamies like Airbnb, allow residents to make additional income from unused rooms. This helps people to remain in a city where the value of real estate continues to escalate into unaffordable territory; in addition, some believe the Prop F is actually a product of the politics surrounding San Francisco’s building sector. Economics expert and professor at the University of California-Berkeley, Enrico Moretti, explained: ‘Rents and housing prices are increasing in San Francisco by and large because San Francisco has constrained new housing.’ He added that this was not due to Airbnb.

Airbnb is one of the world’s largest sites that provide people with a way to let out rooms, apartments or entire houses in the short term. All payments are handled through its web portal, allowing almost anyone to rent a room for a short period. In San Francisco alone, there are around 6,000 Airbnb hosts, with 35% of these individuals offering entire homes or apartments. The benefits for landlords are clear. Blase Hents rents one room in his four-bedroom flat to Airbnb customers, which affords him the luxury of being able to stay in San Francisco while working at a non-profit organisation.

Over 8 million dollars was reportedly spent by the company on a campaign to defeat the Proposition F proposal, therefore allowing short-term lets to continue. The campaign included TV ads, social media drives, billboards and door to door campaigners.

Over the past few years house prices in San Francisco have soared. Rent Jungle’s recent analysis of the city revealed that August saw rental prices for the average one-bedroom apartment with no parking rise to almost $3,000 (£1,941).

For those investing in property with an eye to renting it out, the choice still currently remains to either target the short-term let market with a higher rent level, or longer-term rental options, catering towards residents living in the city rather than tourists coming to explore San Francisco’s vibrant scene.