Short-term Rentals in San Francisco | What to Know

If you're intrigued by the idea of becoming a successful Airbnb property manager or host in San Francisco, you're in the right place. San Francisco's vibrant neighborhoods and iconic landmarks make it an ideal hub for short-term rentals. 

However, navigating the city's regulations and understanding the hosting requirements can be challenging. This guide aims to demystify everything you need to know to operate short-term rentals legally and successfully in San Francisco. 

Discover the Golden Gate City - San Francisco

San Francisco, nestled along the picturesque California coast, is not just a city but a cultural beacon drawing millions of tourists annually. Known for its historical sites like the Golden Gate Bridge and eclectic districts such as Chinatown, Fisherman's Wharf and the Mission District, it offers a vibrant backdrop for short-term rentals. 

Whether it's guests seeking the bustling energy of Union Square or the artistic vibe of the Castro, San Francisco's charm extends to its varied short-term rental offerings.

A Look at the Tourism Impact in San Francisco

Tourism drives San Francisco's economy, boosting restaurants, retail and cultural venues. In 2023, 23.1 million visitors spent $8.8 billion, with total spending reaching $9.3 billion. 

In 2024, 24 million visitors are expected to spend nearly $9.5 billion, including $5 billion from international guests. This underscores San Francisco's premier tourist status, with short-term rentals indispensable for accommodating diverse traveler needs affordably, boosting the city's vibrant hospitality sector.

Brief Overview of Short-Term Rentals in San Francisco

San Francisco's short-term rental market thrives with tourists and business travelers, drawn by its landmarks, culture and neighborhoods. 

According to AirDNA data, San Francisco's short-term rental market has a solid market score of 70 and a rental demand score of 66, reflecting steady interest driven by tourists and business travelers. 

As of June 2024, the following statistics show an overall positive trend, 

• Annual Revenue: $21.4K  (+3% past year)

• Occupancy Rate: 57%  +4% past year

• Average Daily Rate: $265.3  +3%past year

• RevPAR: $143.6 +6%past year

The investability score is low at 10 due to complex regulations and permits. Despite this, a high seasonality score of 97 indicates strong earnings potential during festivals and conferences. Moderate revenue growth at 50 shows steady earnings. 

Overall, San Francisco offers great opportunities for Airbnb hosts who can navigate regulations and maximize peak tourist seasons.

Airbnb Laws, Rules and Regulations in San Francisco

San Francisco's regulatory framework for short-term rentals is anchored in the short-term residential rental ordinance. In 2015, this ordinance was passed to balance the economic benefits of short-term rentals with the preservation of residential housing stock. This approach reflects the city's commitment to preventing short-term rentals from negatively impacting long-term housing availability.

Here’s How to Check for Eligibility

To host a short-term rental in San Francisco under Charter 41 of the City’s Administrative Code, you must meet the following conditions. 

Host conditions

• Permanent resident of San Francisco

• Owner or tenant of the unit

• Lived in the dwelling for at least 60 days before applying

• Plan to live in the unit for at least 275 nights per year

Dwelling conditions

• Must comply with all City codes

• Cannot be in The Presidio, Fort Mason or Treasure Island

• Cannot be a Single-Room-Occupancy (SRO) or dormitory

• Cannot be a Below-Market-Rate (BMR) or Public Housing unit

• Must be permitted and designed for residential use; commercial and industrial spaces are not allowed

• Cannot be subject to an Ellis Act eviction after November 2014

• No sleeping quarters in outdoor areas, including treehouses and vehicles

What is a Short-Term Rental in San Francisco?

A short-term rental in San Francisco is defined as renting a property for less than 30 consecutive nights. Each short-term rental must be registered with the city.

Can you become a legal host in San Francisco?

San Francisco allows short-term rentals, but hosts must follow several regulatory requirements to adhere to community standards and protect residential neighborhoods. 

Understanding the Rules

Here's an overview of the regulations you need to understand before applying to become a short-term rental host in San Francisco

Primary residence rule

San Francisco mandates that hosts can only rent out their primary residence for periods less than 30 nights per stay. This means the property must be the host's permanent home for at least 275 nights per year, ensuring that short-term rentals do not displace long-term residents or exacerbate housing shortages.

Hosted rental

No limit on the number of rentals per year if you are home overnight with your guests in the same unit.

Un-hosted rental

Limited to 90 nights per calendar year if you are not home overnight with your guests.

Multi-unit building

Only the unit where you reside can be registered for short-term rentals.

Tenant guidelines

Tenants cannot earn more than their monthly rent from short-term rental fees.

Insurance

Hosts are required to maintain liability insurance with a minimum coverage typically set at $500,000. This insurance protects both hosts and guests against accidents, damages and other unforeseen incidents.

Building code compliance

Properties must adhere to San Francisco's rigorous building codes and safety regulations. This includes requirements for fire safety, accessibility and structural integrity to ensure the well-being of guests and residents alike.

Additional notes

• Short-term rental rates for units under rent control are restricted.

• Property owners will receive notification from the Office of Short-Term Rentals upon your application.

• Residents in properties governed by a Homeowner’s Association (HOA), Condominium Association or tenancy-in-common (TIC) ownership should note the following, 

Certification of your unit with the Office of Short-Term Rentals does not supersede lease agreements, HOA bylaws, Covenants, Conditions & Restrictions (CC&Rs) or any other private agreements prohibiting subletting or short-term rentals (These agreements are not enforced by the City and County of San Francisco).

How to Register as a Host in San Francisco 

To register your hosting business for short-term residential rentals in San Francisco, follow these steps:

Earning income from short-term rentals qualifies as a business activity, requiring you to obtain a Business Registration Number (BAN) from the Treasurer & Tax Collector's Office. Start by registering your hosting business with them before proceeding to register with the Office of Short-Term Rentals.

Registration requirements

Hosts must complete several steps to comply with city regulations and legally operate a short-term rental in San Francisco 

Office of Short-Term Rentals (OSTR)

Hosts must obtain a Short-Term Residential Rental Certificate from the OSTR. This certificate confirms that the property meets all local regulations and that the host is authorized to rent it out on a short-term basis.

Treasurer & Tax Collector

Hosts must also secure a Business Registration Certificate from the San Francisco Treasurer & Tax Collector's Office. This certificate is necessary for collecting and remitting Transient Occupancy Tax (TOT) from guests staying less than 30 consecutive days.

Ensure you update your Business Registration if you already have another type of business registered in San Francisco. Choose the industry type "Accommodations" when updating your account.

Failure to obtain registration numbers from both offices can lead to substantial fines and penalties. For more detailed guidance and resources, visit:

• Treasurer & Tax Collector's Office Registration

• San Francisco Business Registration Update

Requirements to Apply for Short-Term Rental 

To apply for certification as a short-term rental host with the Office of Short-Term Rentals in San Francisco, you'll need the following items:

1. Office of Short-Term Rentals Application Form

Apply online at: Office of Short-Term Rentals Application

2. Business registration certificate

Include your Business Registration Certificate issued by the San Francisco Office of the Treasurer & Tax Collector. A receipt of a pending application is acceptable to start the certification process.

3. Proof of property-liability insurance

If your hosting platform does not provide insurance, submit proof of property-liability insurance. Some platforms like Airbnb or VRBO offer this coverage. Proof is not required if using these platforms.

4. Application fee

The application fee is $750. The application fee is non-refundable, even if your application is denied.

5. Proof of residency

Provide two of the following documents to confirm your primary residence matches the unit you wish to certify:

• California Driver's License

• SF City ID Card (SF City ID Card)

• Vehicle Registration Card (California DMV) with the unit address

• Homeowner's Tax Exemption

• Original utility bill (SFPUC, Recology, or PG&E) with payment stub

• Voter Registration Card or Certificate from San Francisco Department of Elections

Upon receiving your complete application and fee, the Office of Short-Term Rentals will review your eligibility. If approved, you'll receive a short-term rental certificate via email, valid for two years. If denied, you'll be notified via email with reasons for the denial.

Side Note: Tenants in rent-controlled units must ensure their hosting revenue does not exceed their monthly rent payment.

Compliance and Operational Guidelines

Rent control laws

San Francisco's rent control laws are among the strictest in the country and impact short-term rental operations, particularly in rent-controlled units. These laws aim to protect tenants from excessive rent increases and ensure housing stability for long-term residents. Hosts must familiarize themselves with these regulations to avoid legal pitfalls and maintain compliance.

1. Quarterly reporting

   • Report your Short-Term Rental stays quarterly using the Quarterly Report from the Office of Short-Term Rentals.

   • Access and submit the report online at Office of Short-Term Rentals.

   • Only hosts with approved certificates need to submit Quarterly Reports.

   • While your application is pending, Quarterly Reports are not required.

   • The Office of Short-Term Rentals will email reminders about Quarterly Reporting deadlines.

2. Annual business certificate renewal

   • Renew your business registration certificate annually with the Treasurer & Tax Collector's Office.

   • Renewals are due by May 31st each year.

   • Renew online at Treasurer & Tax Collector's Office.

3. Transient occupancy tax (TOT)

   • Collect a 14% Transient Occupancy Tax (TOT) on short-term rental earnings for stays fewer than 30 days in San Francisco.

   • Learn more about TOT and its requirements at Transient Occupancy Tax (TOT) Resource.

   • For tax-related inquiries, visit the Treasurer & Tax Collector’s website or call 311.

4. Business personal property tax

   • File and potentially pay Business Personal Property Tax annually.

   • Submit Form 571-STR to the San Francisco Assessor-Recorder's Office.

   • Learn more about requirements at the Assessor-Recorder's Office.

5. Maintaining legal operation

   • After certification, ensure ongoing compliance with Short-Term Residential Rental laws.

   • Review requirements regularly at the Office of Short-Term Rentals website.

Note: Tenants in rent-controlled units must not exceed their monthly rent from hosting revenues.

Prohibited Spaces for Short-Term Rentals

Certain spaces in San Francisco, such as Below-Market-Rate (BMR) units, long-term residential properties and Single-Room Occupancy (SRO) buildings are strictly off-limits for short-term rentals. 

Other prohibited areas include industrial spaces, vehicles, permanent residential sleeping quarters, unsuitable outdoor areas and properties in special status locations like The Presidio, Fort Mason, and Treasure Island. 

Landlords must comply with lease restrictions in multi-unit buildings and exceeding limits on un-hosted short-term stays is not allowed to prevent residential properties from being used as hotels.

Special Regulations for Certain Districts

Various San Francisco districts have specific regulations that exceed city-wide rules for short-term rentals. These may include caps on rental days per unit or requirements for hosting platforms to verify valid registrations before listing. 

Legal short-term rentals must demonstrate consistent primary residence occupancy, typically verified through utility bills or similar documentation. San Francisco's strict regulations aim to balance community integrity with the demands of tourism effectively.

Thriving in San Francisco's Short-Term Rental Market

Mastering San Francisco's short-term rental scene requires a deep grasp of local regulations and a steadfast commitment to compliance. Platforms like Hostaway offer indispensable tools for efficient listing management and legal conformity. 

Success hinges on both legal adherence and delivering outstanding guest service. Whether you're a seasoned host or just starting out, making compliance and guest satisfaction your top priorities will pave the way to thriving in this bustling cityscape.

FAQ’s 

1. What is considered a short-term rental in San Francisco?

In San Francisco, a short-term rental is defined as renting out a property for less than 30 consecutive nights. Each short-term rental must be registered with the city's Office of Short-Term Rentals to operate legally.

2. What are the requirements to become a legal short-term rental host in San Francisco?

To become a legal host, you must:

• Be a permanent resident of San Francisco.

• Own or be a tenant of the unit.

• Have lived in the unit for at least 60 days before applying.

• Plan to live in the unit for at least 275 nights per year.

• Ensure the unit complies with all city codes and is not located in prohibited areas like The Presidio, Fort Mason, or Treasure Island.

3. Are there any limits on how many nights I can rent my property as a short-term rental?

Yes, there are limits:

• If you are present overnight with your guests (hosted rental), there is no limit on the number of rental nights.

• If you are not present overnight (un-hosted rental), you can rent your property for up to 90 nights per calendar year.

4. What permits and registrations are required to operate a short-term rental in San Francisco?

You need to obtain:

• A Short-Term Residential Rental Certificate from the Office of Short-Term Rentals.

• A Business Registration Certificate from the San Francisco Treasurer & Tax Collector's Office.

• Additionally, you must maintain liability insurance with a minimum coverage of $500,000 and comply with all building and safety codes.

5. What are the penalties for non-compliance with short-term rental regulations in San Francisco?

Failure to comply with the short-term rental regulations can result in substantial fines and penalties. This includes not registering the rental, exceeding the permitted number of rental nights, or not maintaining the required insurance. Non-compliance can also lead to the revocation of your rental certificate and business registration.