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City to Airbnb: Crack down or pay up

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Lawmakers level $1,000 daily fines for outlaw STRs

Tough year for Airbnb at San Francisco City Hall. First we found out that more than three quarters of San Francisco short-term rentals are flouting registration laws. Now the city has approved fines of up to $1,000 a day for outlaw listings on the site or its competitors.

With thousands of listings still unregistered that could take a big weekly bite out of even a company valued at roughly $25 billion. It remains to be seen exactly how hard the San Francisco-based rental platform will actually be pinched, and what measures the company might take to mitigate the damage.

A straight 10-0 vote yesterday—District Two’s Mark Farrell sat the vote out, citing conflicts with his business interests—makes the law veto proof and set to kick in automatically in 30 days.

District Nine’s Davis Campos introduced the measure back in April, arguing that regulation is useless if there are essentially no consequences for breaking the laws. Airbnb maintains that the system for registering is too difficult and argues that it can’t devote disproportionate resources to policing homeowners in just one of the 34,000 cities it operates in (all of which of course have different laws).

The rules naturally also apply to Airbnb competitors like HomeStay and FlipKey, but Airbnb gets the bulk of the attention from lawmakers, partly because it’s Airbnb and partly because most homeowners who host on competing sites are on Airbnb as well, making it something of a depot by default for STR scofflaws.

In the past, short-term rental companies have hinted that they suspect laws like this violate federal provisions shielding web platforms from being penalized for the misbehaviors of users. City lawmakers insist that they’re giving companies plenty of options to avoid violations and that failure to comply is a misstep by the company rather than users.