Urban environments tend to be trickier for vacation rental owners. In San Francisco, city administrators are pressed to protect the tight rental market for residents of varying income levels while recognizing the new reality of short-term rentals.

The fact that Airbnb is headquartered in San Francisco has made it a heated political issue.

Technically, short-term rentals in San Francisco are illegal as spelled out in Administrative Code 41A, which includes corporate rentals. Enforcement, however, is passive; and last year the city decided to apply the 14% transient occupancy tax (also called hotel tax) to vacation rentals (defined in San Francisco as occupancy of less than 30 days). In addition to the hotel tax, you must remit a 1% or 1.5% tourism fee depending on your zone.

In theory you can become a licensed operator by obtaining a B&B permit, but it’s reportedly a lengthy (years) and expensive (thousands of dollars) process that isn’t guaranteed to result in success.

If you do get reported, you will be asked to discontinue renting before any legal action is taken. If you don’t stop, and you are found in violation, fines are $1,000 per rental day plus legal fees.

The debate rages on, though, so stay tuned. The board of supervisors recently amended the code so that nonprofits that protect housing rights can initiate proceedings against short-term rentals and keep the fines. This could increase the number of complaints being filed unless other agreements are reached to protect the number of affordable long-term rentals.

For more information, visit the San Francisco Office of Short-Term Rentals website.

The information above is intended for informational purposes only; it is not legal advice and should not be relied upon as such. If you need legal advice, you should consult a licensed attorney in your area.