San Francisco legalized short term rentals on February 1st, 2015. The City had previously prohibited short term residential rentals in multi-unit buildings, thereby making most Airbnb rentals illegal. Short term rentals, however, are subject to a variety of limitations under the 2015 law. The following is a complete guideline for San Francisco’s short term rental regulations so that anyone can be a responsible host when using platforms like Airbnb, VRBO, and other similar services. This rundown should give you a good start in understanding your local laws.
Short Term Rental Eligibility Requirements
In the City of San Francisco, a short term residential rental is when property owners rent out all or part of their house for fewer than 30 days. Property owners or tenants who want to host short term rentals in San Francisco must meet all of the following eligibility conditions. All buildings with one or more residential units, including single-family dwellings, are subject to these standards.
- Only Permanent Residents are Eligible
Only permanent San Francisco residents are allowed to serve as short term hosts. Hosts must stay in their unit for at least 275 nights each year to be considered permanent residents. ‘Absentee owners’ who live in San Francisco for less than 275 days per year cannot operate short term rentals.
Permanent residents may rent out their primary dwellings. But they cannot rent out their second or holiday homes or locations where they do not live.
A multi-unit building owner can only register and rent the residential unit in which they live. They can, however, rent out and list bedrooms in the same unit separately.
Liability insurance with a minimum coverage of $500,000 is necessary for hosts. Alternatively, they might rent out their units through a hosting service that provides at least this level of coverage. Airbnb, for example, automatically provides $1 million in insurance to its hosts.
- Building Code
There may be no unresolved building, housing, or planning code complaints in a unit. Hosts can check this by using the San Francisco Property Information Map to look up their addresses. Hosts must also place a clearly printed sign inside the unit’s front door indicating the location of all fire extinguishers in the unit and building. It should also show the location of gas shutoff valves, pull fire alarms, and fire exits.
Short Term Rental Registration Requirements
Hosts must register with the Treasurer and Tax Collector and Office of Short Term Rentals (OSTR) in San Francisco as part of the short term rental regulations.
- Treasurer & Tax Collector
All hosts must register with the Treasurer and Tax Collector of San Francisco and get a Business Registration Number, or a BAN (Business Account Number). This type of registration is entirely free.
- Office of Short Term Rentals
Hosts must also register with the Office of Short Term Rentals and pay a $250 registration fee. They can register online, by mail, or in person. To complete this registration, hosts must have their BAN number. If the Office of Short Term Rentals has approved an application, they will issue the short term rental certificate by postal mail. The certificate is valid for a period of two years. The City registers and keeps track of all short term rentals in a registry.
Short Term Rental Ongoing Compliance
Hosts will have to keep up with the following ongoing compliance requirements once they have registered as a short term rental operator.
- 90-Day Rental Limit
Un-hosted Rentals (Rentals in which the host is not present in the STR) are limited to 90 days per year under San Francisco’s short term rental rule. Violators are subject to a daily fine of $484 for first-time offenders if they continue to rent out their units after the 90-day period has passed; and up to $968 for repeat offenders.
This limit does not apply to “hosted rentals,” which are rentals where the host is present in the apartment.
- Quarterly Reports
Hosts must maintain track of their rentals and self-report the number of days a unit is rented as an STR. Each calendar quarter, hosts must file this report with the Office of Short Term Rentals.
- Rent Control Laws
Hosts who live in rent-controlled units are not allowed to charge their visitors more rent than they pay to their landlord in any given month. Hosts who break this rule may be fined up to $1,000 per day. They could also have their units de-listed from the market.
- Business Certificate Renewal
Hosts must renew their Business Registration Certificate every year with the Treasurer & Tax collector. Renewals are due on May 31st of each year and can be submitted online.
- OSTR Certificate Renewal Biannually
Every two years, hosts must renew their certificate from the Office of Short Term Rentals (OSTR). They must also pay a $250 renewal fee.
Business Personal Property Tax
Hosts must provide an inventory of their business personal property and pay a tax on that property annually. They must submit Form 571-STR to the Accessors Office of the City of San Francisco. Hosts might not need to re-submit Form 571-STR for hosting services if their personal property is less than $50,000 in value.
Transient Occupancy Tax (TOT)
STR operators must collect the 14% Transient Occupancy Tax from renters and pay it to the City of San Francisco. Hosts who list their rental through an online hosting platform do not have to collect or remit this tax; the rental platform does it for them. Airbnb is now the only qualified website that collects and pays such taxes on behalf of its hosts. Hosts who do not rent through a qualified online hosting platform are responsible for collecting and remitting this tax themselves. Hosts who earn more than $40,000 per year must get a Certificate of Authority from the Treasurer & Tax Collector to collect taxes and pay the tax monthly; others may pay the tax annually.
As a responsible host, you must comprehend and abide by other vacation rental rules and regulations that bind you. These include leases, community rules, HOA rules, or other guidelines set up by tenant associations. Feel free to reach out to your landlord, housing authority, or community council to find out more. To get more information about other regulations, you can also visit San Francisco’s official website or contact us.