San Francisco's New "airbnb" Law is now in effect.

Beginning February 1, 2015, San Francisco's new "Air Bnb" law ( San Francisco Ordinance No. 218-14) that permits certain "qualified residents" (landlords or tenants) to rent out their permanent residence on a short-term basis, via websites such as Air BnB. However, there are certain steps and procedures to take before those qualified residents can take advantage of this new law.

Qualified residents need to apply for a Short-Term Residential Rental Number (STRR), through the city's new Registry. Qualified residents can start the application process now. In order to obtain a STRR Number, qualified residents need to meet the following conditions:

• Qualified resident must be the permanent resident of the unit he/she wishes to rent under this new law. "Permanent residence" means that the qualified resident must live in that unit for at least 275 nights in the year (75%), and the qualified resident must have lived in that unit for at least 60 consecutive days before starting the STRR application. This means, for each qualified resident, he/she can only designate ONE unit for STRR treatment. Below Market Rate units are not eligible.
• Qualified resident must have a San Francisco business registration certificate.
• Qualified residence must have liability insurance of at least $500,000 (or proof that the hosting platforms like AirBnB have sufficient coverage).
• The unit to be used for STRR must not have any outstanding building (or other city/state) code violations.
• If the qualified resident is a tenant, he/she must provide a copy of their lease agreement to the SF Planning Department as part of the application process. The SF Planning Department advises qualified residents who are tenants that applying for a STRR Number does not supersede the private lease agreements between the tenant and the landlord. Caveat emptor for qualified residents who are tenants.  Also, the SF Planning Department will notify the owner of the property that a tenant has started the STRR registration process.
• The application must be presented and submitted in person by the qualified resident. An appointment with the SF Planning Department is required.  A link to the application can be found here.
• Qualified resident must pay all applicable fees.

There are some restrictions of the new STRR law. One is that the qualified residents may not rent their unit (in its entirety or a portion of) as a short-term residential rental until they have a STRR Number. The Short-Term rentals cannot be more than 30 consecutive nights. If the qualified resident is not living there during the short-term rental period, there is a cap of 90 nights per year. However, if the qualified resident is only renting out a space/room while he/she is living there, then there is no limit on how many nights the short-term rentals can be. Finally, qualified residents who are tenants cannot charge more to the short-term guests that he/she pays to the landlord as rent. 

Due to the fact that applying for a STRR does not protect qualified residents who are tenants from the wrath of their landlords, those who are tenants should think twice about STRR-ing their unit. The landlords can easily point to a clause in the lease agreement that prohibits subleasing/assignments or that the unit cannot be used for commercial purposes (which an argument can be made that using AirBnB is like a business).  Also, for new tenancies, it is expected that new leases will include a new clause that is directly related to this new ordinance. It can be as simple as, "Tenant may not sub-lease/assign the unit in any short-term rental platforms like AirBnB." 

This new ordinance is designed to keep the City in-line with the existing/up-coming advances in technologies and the social dynamics of its residences. While there is some good to this new ordinance, enforcement to curb abuses will be difficult. I suspect not a lot of people will apply (unless AirBnB forces hosts to have a STRR Number), and if they do, it will mostly be landlords.