San Francisco got little right with their Airbnb-legalizing legislation. The home-renting startup has been accused of illegally lobbying to get the bill passed. Airbnb also helped regulators write portions of the law. Now HomeAway, the Airbnb competitor that runs VRBO, is suing to get the law overturned because it was designed with only one company in mind.
HomeAway claims the law, which was supposed to update antiquated rules to allow for home rental startups, instead "stifles opportunity in such a discriminatory manner." According to the San Francisco Chronicle, the company believes it is being unfairly punished with the law's requirement that short-term rental owners live in the city.
The new law says only permanent residents of San Francisco can rent their homes to short-term travelers. But most of the 1,200 San Francisco listings on HomeAway and its subsidiary VRBO are second homes, whose owners don't live here year-round. HomeAway wants the permanent resident requirement tossed.
"This company (HomeAway) wants to continue to be able to turn housing for San Franciscans into full-time vacation rentals with impunity," he said. "The requirement that only permanent residents of San Francisco can engage in short-term rentals is the linchpin of the legislation because it ensures that housing units for San Franciscans will not become full-time hotels."
The law also says that vacation-rental platforms have to collect and remit San Francisco's 14 percent hotel tax, something that Airbnb started doing in October, although it's been mum about any plans to pay an estimated $25 million in back taxes. But HomeAway and VRBO function differently than Airbnb, acting as classified-listing services rather than middlemen, which means they don't have the ability to collect the hotel tax — or even to know when homes were rented out via their sites.
In a statement, HomeAway's co-founder expressed disappointment that the legislation was not "thought-leading public policy." Had the law favored HomeAway and punished Airbnb, we're sure the company would have found the bill much more 'visionary.'