San Francisco Airbnb landlords agree to pay $2.25 million for illegal renting

San Francisco: A San Francisco couple has paid $2.25 million to settle claims they ran an illegal hotel chain through the vacation rental platform Airbnb.

Landlords Darren and Valerie Lee agreed to pay the cash to cover fines and investigation costs after offering 14 apartments as short-term rentals instead of lawfully renting the units to residential tenants, according to City Attorney Dennis Herrera.

Herrera said the settlement and penalty were an ‘important deterrent and it sent a clear message to those looking to illegally profit off of San Francisco’s housing crisis’.

He said: “Don’t try it, we will catch you. Most importantly, we preserved more than 45 housing units to be used as homes, not hotel rooms. We are fighting back against San Francisco’s housing crisis.”

Critics say short-term rental services such as Airbnb have driven up rental prices and engendered affordable housing shortages in cities including San Francisco and New York City.

The high cost of housing in San Francisco has prompted tighter enforcement of vacation rental laws that took effect earlier this year. Those laws primarily prohibit property owners from offering multiple listings.

Furthermore, San Francisco citizens renting their homes through online sites such as Airbnb and HomeAway / VRBO are required to live in the unit for at least 275 nights a year and rent it out for no more than 90 days during that time.

Under the court-approved settlement, the couple in question will not be able to offer short-term rentals in any of 17 buildings in San Francisco that they own or manage for at least seven years. The couple reportedly paid $276,000 to settle a previous case in 2014 in which they evicted tenants to convert a property into short-term rentals.

Airbnb and competitor HomeAway are required to register all vacation-rental listings with the city, which conducts checks to make sure the hosts actually live in the rentals.