Airbnb impact on condo values?

[Michaela G.]

So, I've been watching the battle in SF a little bit in regards to airbnb and reading the comments on how much tenants hate when neighboring apartments use it to have a constant flow of unknown people coming and going.

I think that's a very valid point and I wonder if it will be something that the use of neighboring condos need to get researched before you invest in one? Yes, it's another time-consuming step, but I think it can influence on how potential tenants or buyers feel about your property and thus could influence your value.

Agree? Disagree? I've never bought a condo and am not interested in investing in any, but I think it's something worth thinking about

[Justin Ashton]

I think the new SF ordinance on short-term rentals (Airbnb law) that went into effect on Feb 1, 2015 will limit the impact that Airbnb will have on condo/apt prices in SF going forward. The very poor growth of supply of new housing in SF and new *highly* paid young workers moving to SF in the tens of thousands are the real drivers of price increases. 

Here's a long-winded rundown since I just looked into the new Airbnb law:

The new law designed is to specifically prevent out-of-city investors from buying a multi-family unit or building to offer short-term rentals. SFH seems to be excluded from the new law, but clearly perform your own due diligence.

The old SF Airbnb ordinance was an effective ban on short-term rental units in a multi-family or apartment building, although you're right that many people (including my friends) ignored the ban and rented units without any oversight. The money was too good. Investors were scooping up units to rent on Airbnb. Its an extremely risky idea to do so now.

While the new law allows "permanent-resident" owners to offer short-term lease and ("p-r" tenants to sublet) a unit in a multifamily (assuming HOA bylaws or tenant lease allows it), all Airbnb hosts must register with the city and get a proper business license. Only primary residences may be rented. Hosts not "present" in their unit during a guest's stay can only rent the unit a maximum of 90 days per year. Owners who cannot show proof of residence in that unit (Drivers License, utility bill, etc) will not be allowed to register for a permit.

Not registering a short-term rental unit will incur large fines and you can expect that the city will be tracking Airbnb listings very closely to their registration list because this is such a high-profile issue in SF and a *lot* of new tax money at stake. You must register with the city in person. There are also new taxes (14% hotel tax) to collect/pay, insurance requirements, and the new "business income" from renting will need to be properly accounted for in taxes (probably a bigger issue for tenants who sublet without reporting income).

I think the creative investment for Airbnb rentals in SF is prob dead, unless you live there 275 days and rent out your own house the remainder to offset your mortgage (or are crazy enough to try to break the laws hoping you wont get caught).