San Francisco creates Airbnb law to allow short-term rentals

SAN FRANCISCO, Oct. 8 (UPI) -- The San Francisco Board of Supervisors voted Tuesday to legalize short-term rentals to pave the way for businesses like Airbnb.

The new law loosens the current restriction barring residential rentals shorter than 30 days. Permanent residents of San Francisco will be allowed to offer short-term rentals if they register with the city as hosts, pay hotel tax, limit entire-home rentals to 90 days per year and hold $500,000 in liability insurance.

Airbnb is a 6-year-old startup based in San Francisco. The company has had trouble getting sanctioned as a business in most cities. Its unconventional format of letting people rent out rooms and homes for a lower rate than hotels has escaped regulation and angered traditional hotel and rental accommodation services.

"The status quo isn't working; we have seen an explosion in short-term rentals," Board President David Chiu said.

Despite the bans on services like Airbnb, there has been very little enforcement as it is a difficult practice to regulate. Allowing the business to be legal and taxable is expected to raise the city $11 million per year.