San Francisco voters reject rental law which would have hammered Airbnb
Airbnb has fought off a San Francisco ballot measure that sought to limit the short-stay rental service in its hometown, an effort to contain housing costs that some say has made the city a playground for well-heeled techies.
The defeated Proposition F, which was meant to preserve scarce housing for residents in a searing market, would have imposed a 75-day-per-year limit on Airbnb rentals and forced hosts to register with the city.
Airbnb, founded in 2008 and operating in more than 34,000 cities as an alternative to pricier hotels, is waging similar battles across the US. In San Francisco, a surge in highly paid technology workers has driven up housing prices and sparked protests over income inequality and evictions. More than a dozen protesters stormed Airbnb's headquarters last Monday, releasing helium balloons with signs reading "homelessness" and "entitlement".
The stakes were high for Airbnb, last valued at $25.5bn and widely expected to go public in the coming years. Losing the ballot could have encouraged political activists in other cities to push for similar restrictions.
"In a decisive victory for the middle class, voters stood up for working families' right to share their homes and opposed an extreme, hotel industry-backed measure," Airbnb spokesman Christopher Nulty said.
Airbnb spent $8.4m to defeat the measure and hired Chris Lehane, a former White House crisis manager, to spearhead efforts to block regulations that could impede its business. The hotel industry largely sat out of the fight, leaving Airbnb to accumulate a major spending advantage.
"It's a validation that they can counter regulation that might be restrictive to their growth," said Arun Sundararajan, professor at New York University's business school who studies the sharing economy.
"Strategically, it's a victory. Here's a piece of regulation that wasn't in Airbnb's best interest and people have voted against it." The state's fourth-largest city is at the centre of the new economy and home to some of the world's most well-known companies, including Twitter and Uber, another sharing-economy company that's battling for dominance against taxis. In recent years, technology jobs have shifted from Silicon Valley to San Francisco as competition increases for young engineers drawn to the vibrant urban environment.
The city's median rent rose 13pc to $4,390 (€4,014) in September from a year earlier. The median home value rose 15pc to $1.1m during the same time, according to Zillow, a Seattle-based real-estate website. (Bloomberg)