Will San Francisco's anti-Airbnb law cause neighbour wars?
Prop. F, or "the Airbnb law" being put forward in San Francisco would limit short-term rentals to 75 or fewer days a year, down from the current 90 days. However, Prop. F detractors believe it is too extreme, and that it allows neighbours to sue neighbours over short term rentals, even if the city would not have sued, or was not yet ready to. Chris Lehane, Airbnb’s recently appointed head of global policy and public affairs, “This will lead to lawsuit vigilantism." He believes it should be up to the city to regulate short term rentals, not neighbours.
Airbnb last week launched a barrage of TV and online ads attacking Proposition F, the San Francisco ballot initiative that seeks to curb short-term rentals. Among the company’s chief complaints: Prop. F would provide financial incentives for neighbors “to spy on each other and file what could be thousands of lawsuits.”

The vacation-rental company will hammer home that theme between now and Nov. 3 through its political committee named SF for Everyone, No on Proposition F. But on the other side, the ballot measure’s backers say lawsuits with potentially steep payouts would give the city and other parties a powerful stick to enforce the law.

San Francisco’s vacation-rental regulations, implemented in February and recently amended, already allow the city, neighbors, building owners and residents, homeowner associations and housing nonprofits to sue alleged violators after filing a complaint with the city and waiting 135 days. If there’s no resolution by then, they must notify the city attorney and wait 30 days to see if his office files suit. The city attorney also can sue alleged violators at any time. The existing law says plaintiffs who win lawsuits can receive attorney fees and costs. If San Francisco prevails in court, it can receive civil penalties of up to $1,000 per day.

But the ballot measure takes it further. It says plaintiffs — including neighbors and nonprofits — who win in court should receive special damages of $250 to $1,000 a day on top of attorney fees and costs. It also allows the various parties to sue hosting platforms like Airbnb in addition to individual hosts. The measure says parties cannot file lawsuits until 90 days after lodging complaints with the city. But even if the city is still weighing the evidence or finds that no violation has occurred, the neighbors and others can still sue.

“This will lead to lawsuit vigilantism,” said Chris Lehane, Airbnb’s new head of global policy and public affairs. “People will be able to fire off lawsuits left and right, as opposed to government playing its role as the umpire. When the umpire calls you out, you’re out. That’s why we have objective third parties to make decisions. This is an effort to do an end run around city government.”

The plan under the ballot measure also seems ripe for abuse by bounty hunters filing multiple shakedown lawsuits, he said, as happened with California’s Prop. 65, which regulates toxic chemicals. Regardless of whether they had violated the law, entities that were sued often paid settlements to avoid the costs of defending themselves in court.

The ballot measure’s proponents say they want to help the city act more aggressively — but also that they want to empower others to step up if it fails to do so.

The City Planning Department has said that current regulations are unenforceable, said Dale Carlson, a leader of ShareBetter SF, which backs Prop. F. He says current regulations are toothless and the city is lackadaisical in pursuing violators.

“We firmly believe that if we give the city the tools it says it needs, that enforcement actions will pick up; the city will start doing its job and the private right of action will not be needed,” he said.

Planning said it received 187 complaints about short-term rentals in 2014 and 170 this year. It was unable to provide the outcome of those cases by press time. In late June the city sent violation letters to 15 hosts for allegedly turning 73 residential units into full-time hotels. Decisions in those cases are due in early September.

Current law requires hosts to register with the city, but only 618 have done so, the planning department said. Airbnb has 4,238 local hosts with 5,459 listings, while HomeAway/VRBO has about 1,000 listings and FlipKey has 359, a Chronicle investigation found.

Rather than a rash of neighbor-vs.-neighbor lawsuits, Carlson thinks the ballot proposal would enable San Francisco to directly target Airbnb and other hosting platforms.

“From a standpoint of government efficiency, it makes the most sense for the city to go after Airbnb for all the unregistered listings that it’s carrying,” he said.

But then why allow neighbors to sue and potentially collect big payouts? Carlson said he remains dubious about how forceful San Francisco’s new Office of Short-Term Rental Administration and Enforcement will be.

“If the city sits on your complaint and does nothing, you should have the ability to protect your right to privacy and quiet enjoyment of your home,” he said. “If a neighbor has to go to all the trouble of doing all the work the city should otherwise be doing, why shouldn’t they be entitled to the same compensation as the city?”

That prospect gives Airbnb hosts chills.

“There are financial incentives to encourage neighbors to try to make money on one another; that’s not the neighborhood I want to live in,” said David Jacoby. He and his wife Kim rent out a room in their Richmond District house to Airbnb travelers for about nine months of the year, which he said helps them afford the city’s escalating costs. The rest of the time, his parents stay there while visiting from Connecticut. The Jacobys are such fans of Airbnb that they appear in the No on F campaign ads with their preschoolers. David Jacoby is thinking about starting a business to help other hosts.

He’s particularly concerned that the proposed measures wouldn’t provide reimbursement for wrongly accused hosts.

“Accused (hosts) would have to pay to defend themselves, even if they haven’t done anything illegal,” Jacoby said. “If the defendant (host) wins, the complainant doesn’t have to pay their legal fees, even if it was a frivolous lawsuit.”

Attorneys say basic economics will prevent frivolous lawsuits.

“Lawyers won’t bring claims that are invalid,” said Joe Tobener, a tenants-rights attorney who has filed about a dozen complaints with the city against short-term rentals on behalf of the San Francisco Tenants Union in a bid to return those units to the housing market. He said the city didn’t issue a single notice of violation in those cases, which the law at that time required before a lawsuit could be filed.

If Prop. F passes,“The only people who will be pursued are bad actors who are violating the statute,” Tobener said. “It’s expensive to file these claims; you have to hire an investigator and have proof.”

Tobener said potentially large damages are necessary to make it possible for attorneys to invest the time and money in such suits. The city’s penalties for wrongful evictions and illegal rent increases are much higher.

“If you ask an attorney to take a risk on a contingency case, there has to be enough value for them to do that,” he said. Even if those suing prevailed in court against hosts, actual damages would be small for such inconveniences as a few noisy nights or some parking being blocked. San Francisco Superior Court can deny attorney fees if there are no or minimal damages.

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid