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tv   [untitled]    May 19, 2015 6:30am-7:01am PDT

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development; is that right. >> yes. that's right. >> good afternoon, everyone. supervisor cowen and supervisors ted from the office of confirmation analysis we've issued an economic impact i'll be happy to answer any questions i'll start on page of much of the background of the other presenters have shared with you but on page 6 we list what i think is the best data available on the extent of the san francisco housing stock this is a question that the consensus bureau asked annually in 2006.
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when the american company sent to an address and unrefund a consensus goes and determines why if it is vacant because a resident is not coming up it and that's where this data comes from it indicates it tourism is not new it is from 990 there were 4 thousand units recorded in san francisco button certainly grown if in the 2030 to 2012 period such by 2012 we were be looking at 12 thousand units in the city used for tourism purchase that number dropped in 2013 back to a level in 2006 it is very important to point out that this use of housing stock for tourism is not matt haney housing units are taken
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off the market it didn't mean that it is permanently lost to the housing stock but we think it is important to provide that context i want to talk about the benefits of the short-term rentals and also to the potential costs short-term rentals provide 3 source of benefits additional income to the host that list them and those hosts owe hotel tax a create a benefit for others fiscal picture for the road to economy and by hosting additional visitors given how occupied our hometowns are it increases the spending in san francisco bans the travel research that the budget analyst relied on we've estimated that the total value of including multiplier effects of the visitor and hotel spends worked out to $276 per hosting day a
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it's a per day as a unit a full unit is occupied in san francisco on the other side the cost associated with the risk of higher housing our report is taken starts with the priemgsz from the planning department that the current ordinance on enforceable and this creates an incentive in our view for a unit to be taken off the market entirely for short-term rental on a full-time basis if that is the case a unit is teen off the horse trailer the loss to the city's economy is 2 hundred and 50 thoitsdz thoughts were unit because of the higher rents everyone is paying and also the indirect loss
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associated with that we see both sides of the economic benefits of the accommodating more short-term rental to get the hosts to spend the hotel tax traded off migrants romantic risk that a cap is too high could create an incentive to take a rental office the market if the incentive exists to take that it is negative of used for a short-term rental everyday of the year before you talk about the methodology of the work i want to make a point of enforcement we're basically assuming that the annual cap in each marines ordinance is enforceable we don't have data or be able to evaluate the proposal we're only looking at the effectiveness of the different caps in the two
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ordinances maximizing the chance for of a economic okay for the city we're starting we don't believe there is day on the actual number of the hounts handing out we don't there there is data because we can't study people's bother we have a study the incentives that condition their behavior the way we do that is look at the related responsibility of putting a vacant unit for rental rent by looking at was it bedroom rents on craigslist and looking at how much a host who took a vacant unit and put it on airbnb would make doing the same activity we would then is how many days
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per year of short-term rentals would on around host need to conditional equal the income annually from craigslist that's our trade off we look the budget analyst report relied upon a scrape of the airbnb website from december 2014 and relied on the scrape throughout 2014 of krltd website and received that from the planning department this is what our relating result was we only included the neighborhoods that had a decent data this is a selection for neighborhoods more than 20 of both airbnb in 2014 and craigslist throughout the year this slide shows the average craigslist rent and the airbnb
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average price were one thing i'll stress it is important to compare the market rents and the not medium rents that are inclusive of people from rent control the trade off that a possessor and owner of a handing out i have a vacant unit do you want to rent it out to do a vacant on the short-term rental market those are the two best indicators of our income of doing we took those and made assumptions about the income with the assumption that an owner of a united or a tenant in the unit for that matter takes the option that provides the highest income during the year this is the slide that provides the relative of this analyze it shows for the neighborhood i've shown we estimate their annual income renting out a 2 bedroom
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apartment in those neighborhoods and their average income with airbnb prices for two bedrooms in that neighborhood and finally, the number of days they'll are so operate as a result short-term rental to get to this break even period this is the first column divided by the second column the number of days to get to an vvnt equal income if the cap is blow and it's enforced effectively no incentive for someone to take the housing off the marketed and pursue it as a short-term rental for a number of days below that path numbers vary by hundred and 23 days of short-term rental in refraining up to a maximize of hundred and 20 days in the inner
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sunset to break even i think a couple of points first of all, if you have a vacant unit and have a contention to treat is it as a full-time short-term rental treat is it as a hotel then you could probably achieve the maximum occupancy that a hotel would dhouf which is 85 to 90 percent of the year you can't go hive because you can't get our customers consumers - if we allowed people to bill 3 hundred plus this creates a risk the market will not find the right solution we need a cap, however it further suggests the caps discussed in those legislation the 060 day cap in supervisor campos and hundred and 20 day cap in supervisor farrell and
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the mayors legislation those are moot the vast majority of neighborhoods this would do- remove an incentive to take a unit off the market entirely because of the mayor and supervisor farrell's legislation allows four short-term rental we allow the protection of the housing stock it has a positive economic impact we can't quantify because of the limitations i'll speak to a couple of indicate yots this analysis only covers 2 bedrooms unit this is only because craigslist didn't talk about the difference between studios there are more 2 bedroom units that fit our purpose, and, secondly this is an important part of the debate we only look at the
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vacant unit not comparing to the rent you got on get on the private list on craigslist if you are looking for a full-time rental this is complicated because it is noted simply an either or indecision decision that you have a rental you'll rent it out full-time or short term but if you have a spare bedroom you may want the space the consensus says over 20 percent of the space in san francisco it has more are a vacant space at least one vacant bedroom and what's interesting for our trend is that despite the growth in rent in existence 2010 and despite it increased since 2010 that percentage has
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not moved that percentage people preference to have vacant bedrooms in their house didn't seem to particularly incentive to what we do on a should recall playroom or looking for a roommate so for that reason we don't have the analysts we believe if a given cap is executive for a 1r57b9d unit that will not be effective taking the vacant bedrooms off the market for a roommate finally to committed this amongst our impact reports we've had less data we want to make the point in the future the city will have more data it is likely we'll do more analysis we have a more robust confliction than
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that now and summarize our approach that's no data on how many housing units are being removed if you stop the housing units short-term rental is good if you cannot stop them from being taken off the market that's the risk of a negative impact we find that a cap is necessary given the relative income i could make short-term rental on a full-time basis versus the part time but bans what is happening in the neighborhoods across the city both proposed caps are more than adequate to reduce the green voter of risk of vacant housing units being taken off the market and for that reason the larger of the caps will allow more of the benefits of short-term rental and have a more positive
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economic impact that concludes my presentation. i'll be happy to answer any questions >> supervisor campos. >> thank you very much madam chair and mr. egg on for our work i haven't reviewed the final draft i went over the prior draft you shared with us just a couple of questions your analysis is based on certain assumptions it some of the simulations are not correct what does that do to the analysis does that led to a different conclusion. >> well, the analysis relies on assumptions in if the assumptions change the data is not correct a. >> there is perfect enforcement in terms of that law. >> ; is that correct. >> i don't know if we use the wordperfect we said it will be
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enforceable so. >> if one the conclusions navigate that is an incorrect assumption the law is not enforceable that changes the result of our analysis. >> we're analyzing both the proposed ordinances that have their own 0 impoverishment we don't feel we have the confidence as an agency that didn't do enforcement saying this is more effective we simply have to leave that. >> that's what i financially the problem i have the enforceability and for us we believe in impoverishment can't happen await certain things that changes the analysis another question do you take into account as you analysis this allowing law c have i take into account the impact of the evictions like the mission.
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>> we haven't take into account the impact of evictions we considered whether a cap will have a different impact on evictions of the vacant unit i think we satisfied ourselves in the cap is effective if pertaining a vacant unit it will be as effective as pretending evictions obviously rents are high residential residence there can be a motivation to evict someone that has nothing to do with to with the evictions so if people use a vacant unit for residential rent steadfast a short-term rental that cap will not make an additional motivation for environmental impact someone. >> it is impossible to have a true analysis of economic impact
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without looking at the evictions i want it end in our report it is page 8 you say that there are srntd harms associated with a unit is are removed from the housing unit can you explain that to us. >> sure when a unit is removed from the hyatt it the restricted and it makes the housing go up so people spend more money on housing and letting less to spend less in the city 80 so the consumers they may require we're talking about samuel effects but if it is large units if the housing gossips the labor costs go up and people need more
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earnings to earn in the city and that has other sellers impacts. >> do you have a quantifyable impact in removing one housing unit that quantitativelyable impact that's what we're saying. >> what is that. >> 2 hundred and 50. >> 2 hundred and 62 thousand. >> i think in the final draft 2 hundred and 62 is hard that is the research. >> if we conclude one housing units the economic impact is a loss of $206,000. >> yes. occupied i say shrm you get benefits but we found
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the net effect is still 2 hundred plus. >> did you review the budget analyst report. >> i read it before today's hearing i reviewed piece of it. >> in that report there was a projection of the number of units that are being lost to commercial short-term rentals did you see that. >> yes. i did. >> so based on our analysis if we lose 2 henry adams and 62 thousand which one housing unit is taken off the housing market if we include that x amount of units is removed from the housing market the economic interacting impact is 2 hundred and 62 thesis times and supervisor one the reasons we
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say many times in our report we don't have the day on the rent controls how many housing unit are permanently off the market we explicit do you want an approach to try to make an estimate we don't feel that is there that's why we are expressing if on a per unit basis. >> i think i'll end it with that, i think that is interesting that the one thing that is clearly delineated in that report is that if you have a loss of one affordable unit there's a clear negative impact on the city of 2 henry adams and $62,000 on anchorage if you extrapolate that in terms of the number one number of units removed from the housing unit if you take the numbers from the controller or the economic i
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thought the 9 hundred and 25 units to one thousand 9 hundreds and 62 units that's a total of times $200,672,000 that's $242 million to as high as $513 million thank you supervisor farrell. >> thank you, madam chair person so mr. egon i don't want to leave it there i appreciate supervisor campos comments and numbers but that is taking apples and oranges and municipal court them to get some other fruit he'd like to have (laughter) clapping)
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i don't mean that facetiouslyly i want to get to our comment i think the budget analyst report makes a lot of assumes and has conclusions and from my prospective are dangerous you took a different approach to say we don't have enough data to analyze it can you talk about that it is important to have it discussion to take something piece of information they're important trade in the media as facts as you supervisor tiejdz there's no day available to the city or public domain that says how many nights a year the units is on a short-term rental approach theres a there's a
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cleaver method how many the period duration over which the rates are taken that method we replicated is subject to error we know that subject are used over hundred and 50 percent of the time it is mathly bobble it is not necessarily the analysis has less arrow we they did this approach suppose you knew how many nights a year it is occupied you don't know if there is a situation of a full-time resident moving out that many times or the owner of a vacant unit bringing in that many guests one of the things i think is important to keep in mind if someone has a vacant unit and they have their intent to treat
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is it like a hotel you'd expect them to have an occupancy to a hotel 3 hundred and thirty nights a year the budget analyst circulated the incremental eye or a commercial hosting is much, much less like 60 to 90 days a year i don't understand why you assume that someone who only relents 90 days a year and leave their unit vacant the rest of the time that's what a property owner would do with their property it seems like if you want to be a commercial host you'll use it as much as possible. >> maybe they're being poor commercial yourself. >> you do have a well, let's pit it this way i prefer to study the real behavior but this
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is what we have to work with. >> thank you very much mr. egon. >> okay. so we've heard the reports thank you, mr. egging on. >> thank you colleagues are there any other future questions or comments supervisor campos. >> thank you. was telling supervisor farrell i'm okay you know being society with fruits there's nothing wrong that that (laughter) but i will say what's interesting interesting about this whole discussion others crux of the criticism of the budget and legislative budget analyst report there's all this data that's not under and the reason why the data is not there
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airbnb refuses to provide that so i wish that folks who or so concerned about that will actual address the question to the actual reason that's a problem airbnb and by the way, the reason why question focus on airbnb is because first of all let's be honest here mr. chow met with airbnb 66 times before airbnb started so airbnb had a lot to do what what writing the law so airbnb and their supporters show you we're picking on them they wrote the law they wrote the law and the thing about the idea of a lemon you know when i if i buy a lemon from a car dlaerl i'm not going
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to go back to the that dealership to buy the lemon we bought a lemon from airbnb it's conformance. it is common sense i look forward to hearing if the public >> supervisor wiener. >> thank you, madam chair so you know the budget i have a lot of respect for this budget analyst they've done extraordinarily work for me and they're really just terrific to work with and do a lot of great work it is not entirely fair for the basis of conclusions and for calculations and to really probe whether they were done in the right way or present a false
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conclusion or be a liar they're tough and we can have that public debate i happen to agree with supervisor farrell i judge don't think around the issue of vacant units the calculation was done in a way it should have been and gardened misleading headlines i'll say it not helpful to take potshots at supervisor david chiu up in sacramento represent our district. >> what air force the extremely member of that board is not here to defend themselves but i don't think that is a helpful way to conduct that debate. >> all right. supervisor farrell. >> let me say the comments about the budget analyst they're amazing to work with they've done great work and continue to
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do so from my prevention that is a more about the data that is available supervisor campos comments one the companies have has it day we prospective we need to look at this issue across san francisco and across every single platform and no other platform aside is from other than has this data i prefer for the city and county of san francisco to go take a holistic approach to the situation and to the area of short-term rentals and scapegoating one company is not the right approach whether they've within involved or not in drafting prior piece ofs legislation i've spoken and since i've spoken with the opponents and spoken with everyone and i'll say this
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they've been at the table talk and willing to share adhere points of view as i've been talking to a number of short-term rentals companies and this engagement is key bottom line from my prospective we created a framework our home sharers is a part of san francisco we have car sharing and parking lot sharing and sharing as an economy as residents in n this country it's a very, very young industry and we've entertained at the board of supervisors inside of city hall we'll have to be open to reinviting them angle a more frequent based on areas of the law i have no qualms with doing it here i want to thank the planning department and