SF ponders what to do with corporate rentals like Sonder

Corporate rentals, which technically count as housing but in many cases operate more like hotels targeting deep-pocketed visitors, are now thrust into the spotlight in San Francisco after last week’s discovery that a development at 2100 Market Street is marketing itself as a “boutique living service” rather than traditional apartments.

Supervisor Rafael Mandelman, whose district includes 2100 Market Street in Duboce Triangle, complained about the new venture and called the move a bait-and-switch.

“San Francisco neighborhoods never signed up for corporate hotels masquerading as rental housing,” Mandelman wrote on Facebook. “Since learning about the developer’s plans to operate 2100 Market as an extended-stay hotel earlier this week, my office has been in contact with the Planning Department and the City Attorney’s office to determine whether these units are allowed under existing law. If they are, we need to change the law and close this loophole.”

The loophole in question specifies that the 2100 Market venture—part of the Sonder network of rentals—qualifies as housing because it demands that renters stay at least 30 days, which differentiates the building from short-term rentals like Airbnb or traditional hotels.

Many of the city’s single-room-occupancy hotels (SROs) operate the same way, advertising cheap rooms on the short but maintaining most of their tenancies via long-term renters who often stay for years. The difference is that SROs cater to some of the city’s poorest residents, but Sonder advertises units for nearly $400 per night in some of its SF locales.

At Thursday’s meeting of the San Francisco Planning Commission, Kelly Hill, a member of the neighborhood group United to Save the Mission, said that corporate rentals like Sonder have cropped up in new buildings all over his neighborhood.

“[This] goes against every person who has stood at this podium and tried to make a housing supply argument,” Hill said, urging commissioners to be vigilant against such developments in the future.

Planning Commissioner Dennis Richards told the San Francisco Examiner, “We are being played,” adding that the “whole idea that we are solving the housing crisis—really we are solving a hotel crisis.”

Although arguably duplicitous, there’s nothing illegal about this use of housing stock. Companies have done it for years. SF Corporate Rentals, a local Sonder competitor, presently advertises nearly 50 units around the city for month-to-month rentals, with rent prices up to $8,100.

Developer Brian Spiers—who leased the lot that formerly housed the Home restaurant for years next to the Church Street Muni station—calls the new Arquitectonica-designed Sonder building “a seven-story, 60-unit apartment building.”

But the Sonder site presents public branding interchangeable with most SF hotels, including ad copy promising value “whether your stay is two days, two months, or two years.”

A Sonder spokesperson tells Curbed that “the leases at this location will average in length from six months to a year” and objects to any use of the term “short-term rental” in regards to the property.