FILE NO. ORDINANCE NO. [Administrative Code - Short-Term Residential Rentals] Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 1 1 Ordinance amending the Administrative Code to revise the Residential Unit Conversion 2 Ordinance to: require Hosting Platforms verify that a Residential Unit is on the City 3 Registry prior to listing; require Hosting Platforms respond to notices and requests for 4 information; and provide for civil, administrative, and criminal penalties against 5 Hosting Platforms for violations of the Residential Unit Conversion Ordinance; and 6 affirming the Planning Department’s determination under the California Environmental 7 Quality Act. 8 9 10 11 NOTE: Unchanged Code text and uncodified text are in plain Arial font. Additions to Codes are in single-underline italics Times New Roman font. Deletions to Codes are in strikethrough italics Times New Roman font. Board amendment additions are in double-underlined Arial font. Board amendment deletions are in strikethrough Arial font. Asterisks (* * * *) indicate the omission of unchanged Code subsections or parts of tables. 12 13 Be it ordained by the People of the City and County of San Francisco: 14 15 Section 1. Environmental Findings. The Planning Department has determined that the 16 actions contemplated in this ordinance comply with the California Environmental Quality Act 17 (California Public Resources Code Sections 21000 et seq.). Said determination is on file with 18 the Clerk of the Board of Supervisors in File No. _____________ and is incorporated herein 19 by reference. The Board affirms this determination. 20 21 22 Section 2. The Administrative Code is hereby amended by revising Sections 41A.4, 41A.5, 41A.6, and 41A.7, to read as follows: 23 SEC. 41A.4. DEFINITIONS. 24 Whenever used in this Chapter 41A, the following words and phrases shall have the 25 definitions provided in this Section: Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 2 1 * * * * 2 Short-Term Residential Rental Registry or Registry. A database of information 3 maintained by the Department that includes a unique registration number for each Short-Term 4 Residential Rental and information regarding Permanent Residents who are permitted to offer 5 Residential Units for Short-Term Residential Rental. Only one Permanent Resident per 6 Residential Unit may be included on the Registry at any given time. The Registry shall be 7 available for public review to the extent required by law, except that, to the extent permitted by 8 law, the Department shall redact any Permanent Resident names and street and unit numbers 9 from the records available for public review. 10 * * 11 SEC. 41A.5. UNLAWFUL CONVERSION; REMEDIES. 12 * 13 (d) Civil Action. 14 * * * * * * * * * (3) Civil Penalties. If the City is the prevailing party in any civil action under this 15 16 subsection (d): an Owner, Hosting Platform, or Business Entity in violation of this Chapter 41A 17 or a Hosting Platform in violation of subsection (g)(4)(A) may be liable for civil penalties of not 18 more than $1,000 per day for the period of the unlawful activity. Interested Parties other than 19 the City may not seek or obtain civil penalties. 20 * * * * 21 (e) Criminal Penalties. Any Owner or Business Entity who rents a Residential Unit for 22 Tourist or Transient Use in violation of this Chapter 41A, or any Hosting Platform that provides a 23 listing for a Residential Unit for Tourist or Transient Use in violation of this Chapter 41A, without 24 correcting or remedying the violation as provided for in subsection 41A.6(c)(6), shall be guilty 25 of a misdemeanor. Any person convicted of a misdemeanor hereunder shall be punishable by Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 3 1 a fine of not more than $1,000 or by imprisonment in the County Jail for a period of not more 2 than six months, or by both. Each Residential Unit rented for Tourist or Transient Use shall 3 constitute a separate offense. 4 * * * * 5 (g) Exception for Short-Term Residential Rental. 6 * 7 (4) Requirements for Hosting Platforms. 8 * * * (A) Notice to Users of Hosting Platform. All Hosting Platforms shall 9 provide the following information in a notice to any user listing a Residential Unit located 10 within the City and County of San Francisco through the Hosting Platform's service. The 11 notice shall be provided prior to the user listing the Residential Unit and shall include the 12 following information: that Administrative Code Chapters 37 and 41A regulate Short-Term 13 Rental of Residential Units; the requirements for Permanent Residency and registration of the 14 unit with the Department; and the transient occupancy tax obligations to the City. 15 (B) A Hosting Platform shall comply with the requirements of the 16 Business and Tax Regulations Code by, among any other applicable requirements, collecting 17 and remitting all required Transient Occupancy Taxes, and this provision shall not relieve a 18 Hosting Platform of liability related to an occupant's, resident's, Business Entity's, or Owner's 19 failure to comply with the requirements of the Business and Tax Regulations Code. A Hosting 20 Platform shall maintain a record demonstrating that the taxes have been remitted to the Tax 21 Collector and shall make this record available to the Tax Collector upon request. 22 (C) Prior to listing a Residential Unit within the City to be rented for Tourist or 23 Transient Use, a Hosting Platform shall verify with the Office of Short-Term Residential Rental 24 Administration and Enforcement that the Residential Unit is listed on the Registry and has a valid 25 registration number. Hosting Platforms shall comply with this subsection (g)(4)(C) by: Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 4 (i) Providing the verified registration number on each listing in the area 1 2 of the listing dedicated to information verified or compiled by the Hosting Platform about the host, 3 such as host response rate, host ratings time, and date of joining the platform; or (ii) Ensuring that the host has included a Hosting Platform-verified 4 5 registration number within the listing and that the number is visible to all users of the Hosting 6 Platform; or 7 (iii) Sending the verified registration number, Residential Unit street 8 address (including any unit number), and host name to the Office of Short-Term Residential Rental 9 Administration and Enforcement by electronic mail prior to posting the listing on the platform. 10 (C D) Any violation of a Hosting Platform's responsibilities under 11 subsections (g)(4)(A), (B), or (C), or 41A.7(b) shall subject the Hosting Platform to the 12 administrative penalties and enforcement provisions of this Chapter 41A, including but not 13 limited to payment of civil penalties of up to $1,000 per day for the period of the failure to 14 comply, with the exception that any violation related to failure to comply with the requirements 15 of the Business and Tax Regulations Code shall be enforced by the Treasurer/Tax Collector 16 under that Code. 17 (5) The exception set forth in this subsection (g) provides an exception only to 18 the requirements of this Chapter 41A. It does not confer a right to lease, sublease, or 19 otherwise offer a residential unit for Short-Term Residential Use where such use is not 20 otherwise allowed by law, a homeowners association agreement or requirements, any 21 applicable covenant, condition, and restriction, a rental agreement, or any other restriction, 22 requirement, or enforceable agreement. All Owners and residents are required to comply with 23 the requirements of Administrative Code Chapter 37, the Residential Rent Stabilization and 24 Arbitration Ordinance, including but not limited to the requirements of Section 37.3(c). 25 Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 5 1 (6) Department Contact Person. The Department shall designate a contact 2 person for members of the public who wish to file Complaints under this Chapter 41A or who 3 otherwise seek information regarding this Chapter or Short-Term Residential Rentals. This 4 contact person shall also provide information to the public upon request regarding quality of 5 life issues, including, for example, noise violations, vandalism, or illegal dumping, and shall 6 direct the member of the public and/or forward any such Complaints to the appropriate City 7 department. 8 (7) Notwithstanding any other provision of this Chapter 41A, nothing in this 9 Chapter shall relieve an individual, Business Entity, or Hosting Platform of the obligations 10 imposed by any and all applicable provisions of state law and the San Francisco Municipal 11 Code including but not limited to those obligations imposed by the Business and Tax 12 Regulations Code. Further, nothing in this Chapter shall be construed to limit any remedies 13 available under any and all applicable provisions of state law and the San Francisco Municipal 14 Code including but not limited to the Business and Tax Regulations Code. (8) Annual Department Reporting Requirement. Within one year of the effective date of 15 16 this ordinance and annually thereafter, the Department shall provide a report to the Board of 17 Supervisors regarding the Department's administration and enforcement of the Short-Term Residential 18 Rental program. The study shall make recommendations regarding proposed amendments to this 19 Chapter 41A necessary to reduce any adverse effects of the Short-Term Residential Rental program. 20 21 22 23 24 25 SEC. 41A.6. ADMINISTRATIVE ENFORCEMENT PROCEDURES. * * * * (d) Administrative Penalties for Violations and Enforcement Costs. (1) Administrative Penalties. Administrative penalties shall be assessed as follows: Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 6 (A) For the initial violation, not more than four times the standard hourly 1 2 administrative rate of $121.00 for each unlawfully converted unit, or for each identified failure 3 of a Hosting Platform to comply with the requirements of subsections 41A.5(g)(4)(A), (B), (C), 4 or 41A.7(b), per day from the notice of violation until such time as the unlawful activity 5 terminates; (B) For the second violation by the same Owner(s), Business Entity, or 6 7 Hosting Platform, not more than eight times the standard hourly administrative rate of $121.00 8 for each unlawfully converted unit, or for each identified failure of a Hosting Platform to comply 9 with the requirements of subsections 41A.5(g)(4)(A), (B), (C), or 41A.7(b), per day from the day 10 the unlawful activity commenced until such time as the unlawful activity terminates; and (C) For the third and any subsequent violation by the same Owner(s), 11 12 Business Entity, or Hosting Platform, not more than 12 twelve times the standard hourly 13 administrative rate of $121.00 for each unlawfully converted unit or for each identified failure of 14 a Hosting Platform to comply with the requirements of subsections 41A.5(g)(4)(A), (B), (C), or 15 41A.7(b), per day from the day the unlawful activity commenced until such time as the unlawful 16 activity terminates. 17 (2) Prohibition on Registration and Listing Unit(s) on Any Housing 18 Platform. In the event of multiple violations, the Department shall remove the Residential 19 Unit(s) from the Registry for one year and include the Residential Unit(s) on a list maintained 20 by the Department of Residential Units that may not be listed on any Hosting Platform until 21 compliance. Any Owner, or Business Entity or Hosting Platform who continues to list a 22 Residential Unit in violation of this Section 41A.6 shall be liable for additional administrative 23 penalties and civil penalties of up to $1,000 per day of unlawful inclusion. 24 25 (e) Notice of Violation and Imposition of Penalties. The Director shall notify the Owner or Hosting Platform by certified mail of the violation and that administrative penalties Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 7 1 shall be imposed pursuant to this Chapter 41A. The notice shall state the time of the existence 2 of the violation and the resulting imposition of penalties. Payment of the administrative 3 penalties and enforcement costs shall be made within 30 days of the certified mailed notice to 4 the Owner or Hosting Platform. If the administrative penalties and enforcement costs are not 5 paid, the Director shall refer the matter to the Treasurer/Tax Collector and/or initiate lien 6 procedures to secure the amount of the penalties and costs against the real property that is 7 subject to this Chapter, under Article XX of Chapter 10 of the Administrative Code to make the 8 penalty, plus accrued interest, a lien against the real property regulated under this Chapter. 9 Except for the release of the lien recording fee authorized by Administrative Code Section 10 10.237, all sums collected by the Tax Collector pursuant to this ordinance shall be deposited 11 as set forth in subsection (f) below. 12 (f) Deposit of Penalties. Any fees and penalties collected pursuant to this Chapter 13 41A shall be deposited in the Housing Trust Fund for use by the Small Sites ProgramDepartment, 14 which shall reimburse City departments and agencies, including the Department and the City 15 Attorney's Office, for all costs and fees incurred in the enforcement of this Chapter 41A. 16 * 17 SEC. 41A.7. OFFICE OF SHORT-TERM RESIDENTIAL RENTAL ADMINISTRATION 18 19 * * * AND ENFORCEMENT. (a) The Mayor shall establish an Office of Short-Term Residential Rental 20 Administration and Enforcement, which shall provide a single location to receive and process 21 applications for the Registry and Complaints regarding violations of this Chapter 41A. This 22 office shall be staffed by the Department and other departments as appropriate, with 23 participation from the Department of Building Inspection, the Treasurer/Tax Collector's Office, 24 and other departments as needed, to process applications for the Registry and enforce the 25 requirements of this Chapter 41A in a timely and efficient manner. It is the intent of this Board Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 8 1 of Supervisors in directing the establishment of this office to streamline both the process of 2 administering the Registry and enforcing the requirements of this Chapter 41A to protect 3 residential housing from unlawful conversion to Tourist or Transient Use. 4 (b) Monitor Hosting Platforms. In addition to the administrative enforcement duties 5 outlined in Section 41A.6, the Office of Short-Term Residential Rental Administration and Enforcement 6 shall actively monitor Hosting Platform listings to ensure that Hosting Platforms are only listing 7 Residential Units that are listed on the Registry. Within 15 business days of the Effective Date, the 8 Office of Short-Term Residential Rental Administration and Enforcement shall complete a 9 comprehensive review of active Hosting Platform listings and produce an inventory of non-compliant 10 listings discovered during the review. Subsequent reviews of Hosting Platform listings shall be 11 performed on at least a monthly basis. 12 (1) The Office of Short-Term Residential Rental Administration and Enforcement shall, 13 upon completion of a Hosting Platform review or discovery of a potentially non-compliant listing, 14 immediately provide notice to Hosting Platforms by electronic mail of all listings that do not have valid 15 registration numbers or are otherwise not in compliance with this Chapter 41A. These notices shall be 16 provided to the City Attorney’s Office. 17 (2) Hosting Platforms shall respond to each notice sent pursuant to subsection (b)(1) by 18 confirming, for each listing identified in the notice, that the listing has a valid registration number and 19 providing that number and any other requested information relevant to determining whether the listing 20 complies with the provisions of this Chapter 41A (including unit address and host information) to the 21 Office of Short-Term Residential Rental Administration and Enforcement. 22 (3) For each listing that a Hosting Platform fails to provide the requested information 23 within one City business day of the notice being sent by the Office of Short-Term Residential Rental 24 Administration and Enforcement, the Hosting Platform shall be subject to the administrative penalties 25 Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 9 1 and enforcement provisions of this Chapter 41A, including but not limited to payment of civil penalties 2 of up to $1,000 per day until the Hosting Platform complies with subsection (b)(2). 3 (c) Reporting to Board of Supervisors. (1) Annual Reports. The Office of Short-Term Residential Rental Administration and 4 5 Enforcement shall provide a report to the Board of Supervisors regarding the administration and 6 enforcement of the Short-Term Residential Rental program on an annual basis. The report shall make 7 recommendations regarding proposed amendments to this Chapter 41A necessary to reduce any 8 adverse effects of the Short-Term Residential Rental program. (2) Quarterly Reports. The Office of Short-Term Residential Rental Administration and 9 10 Enforcement shall provide quarterly reports to the Board of Supervisors summarizing the Host 11 Platform monitoring activities during the preceding quarter. The periods covered by the quarterly 12 reports shall commence on January 1, April 1, July 1, and October 1, respectively. At a minimum, each 13 report shall include the number of notices sent to Hosting Platforms, the total number of listings 14 included in those notices, the number of listings that were confirmed as non-compliant or otherwise 15 removed or modified by the Hosting Platforms in response to the notices, and the number and amount 16 of penalties imposed on Hosting Platforms for failing to respond to notices. Each report shall break 17 down information by zip code, supervisorial district, and any other criteria as may be requested by the 18 Board of Supervisors. 19 20 * * * * 21 Section 3. Effective Date. This ordinance shall become effective 30 days after 22 enactment. Enactment occurs when the Mayor signs the ordinance, the Mayor returns the 23 ordinance unsigned or does not sign the ordinance within ten days of receiving it, or the Board 24 of Supervisors overrides the Mayor’s veto of the ordinance. 25 Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 10 Section 4. Scope of Ordinance. In enacting this ordinance, the Board of Supervisors 1 2 intends to amend only those words, phrases, paragraphs, subsections, sections, articles, 3 numbers, punctuation marks, charts, diagrams, or any other constituent parts of the Municipal 4 Code that are explicitly shown in this ordinance as additions, deletions, Board amendment 5 additions, and Board amendment deletions in accordance with the “Note” that appears under 6 the official title of the ordinance. 7 8 9 10 11 APPROVED AS TO FORM: DENNIS J. HERRERA, City Attorney By: ROBB KAPLA Deputy City Attorney 12 13 n:\legana\as2016\1500663\01101023.docx 14 15 16 17 18 19 20 21 22 23 24 25 Supervisors Campos; Peskin; Avalos; Mar BOARD OF SUPERVISORS Page 11