San Francisco voters defeat measure restricting Airbnb rentals

A measure to restrict short-term rentals in San Francisco failed at the polls on Tuesday, handing a victory to home and apartment rental companies like Airbnb, the target of the measure.

The proposition's defeat indicates the political clout of Airbnb, a $25.5 billion company which ran an aggressive campaign against the measure in its hometown, signalling its intent to bigger cities elsewhere considering restrictions.

Airbnb spent $8 million, recruited more than 400 supporters to knock on doors, put up controversial billboards and ran an onslaught of TV ads.

With all precincts reporting, Proposition F was defeated 55 per cent to 45 per cent, San Francisco's election website said. The measure had sought to limit the number of days a private room, apartment or home could be rented in the city.

The law, said supporters, had aimed to stem the loss of already scant housing supply to home- and room-renting websites such as Airbnb, HomeAway Inc and VRBO.

But others said the result would help protect the middle class in San Francisco, who rely on the extra revenue to cope with rising rental prices.

Prop. F would have capped short-term rentals at 75 nights per year, required quarterly reports to the city on how a unit is used and given neighbours greater power to sue violators.

With around 5,000 rentals listed on the website, San Francisco is not one of Airbnb's larger markets.

But the company had feared other cities would propose more restrictions, threatening Airbnb's ability to add more rentals to its website, grow revenue and protect its valuation - all of which will be under scrutiny as the company moves toward an initial public offering.

Now, Airbnb's victory gives it some ammunition in cities such as New York and Los Angeles, which are also weighing tough restrictions.

Prop. F's defeat allows residents like Bruce Bennett, 53, who rents a room in his home on Airbnb, to continue making the income he relies on to help pay for knee surgery.

“I'm limping along in life,” he said.

But John Forsyth, 56, fears Prop. F's defeat may turn his once-quiet street into a never-ending block party. He says three of the 30 or so houses on his cul-de-sac have been used as Airbnb rentals.

“At 3 o'clock in the morning an Uber pulls up and a bunch of drunk people pile out,” he said.

On a separate measure, some 73 per cent voted in favor of a $310 million affordable housing bond aimed at developing units for low and middle-income families while stemming evictions.

Voters also checked “no” on a proposal to freeze market-rate housing development in the city's Mission District - the site of protests in 2013 against tech company shuttle routes - for 18 months and require the city to develop an affordable housing plan for the area.