October 8, 2014 / 9:20 PM / 5 years ago

San Francisco ordinance would tax residents who sublet to tourists

(Reuters) - San Franciscans who rent out their homes to tourists when they are out of town would have to prove that they live there most of the year and pay hotel taxes on the money they make under an ordinance that moved forward on Monday.

The popular Northern California city has struggled for years to keep its housing stock from becoming too pricey, and the rise of online booking services such as Airbnb has led to worries that scarce units will be continuously rented to travelers instead of local residents.

“Short-term rentals have not been legal, but we’ve seen thousands of online hosting listings every day and no enforcement and no rules,” said Supervisor David Chiu, who introduced the ordinance, which won preliminary approval from the Board of Supervisors on a vote of 7 to 4.

Under the ordinance, which will be voted on again by the board later this month before going to Mayor Edwin M. Lee for his signature, people would have to live in a home for nine months of the year in order to rent it out for a period of fewer than 30 days.

They would also have to pay a 14 percent tax on the money they bring in.

The ordinance was welcomed by Airbnb, an online service that connects travelers with people who are interested in renting rooms or sharing their homes.

“The legislation that moved forward tonight will give regular people the right to share the home in which they live and make it fair to share in San Francisco,” the company said on its website.

San Francisco has forbidden short-term rentals of its limited housing stock for years, according to Chiu, although such activity has long gone on under the table.

The rise of such services as Craigslist and Airbnb has brought the issue to public attention, prompting accusations that landlords had evicted tenants in order to rent out their units at lucrative hotel-level rates.

Others said that the city had become so expensive that they had to share their homes with travelers just to make ends meet, Chiu said.

“We’re trying to maximize the use of housing by permanently residing San Franciscans but also give San Franciscans who are struggling to make the rent or pay the mortgage the opportunity to make a little money sharing their homes,” he said.

Editing by Eric Walsh

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