Airbnb and San Francisco Meet Privately to Settle Bitter Lawsuit

The NBC Bay Area Investigative Unit has learned representatives from Airbnb and the city of San Francisco met privately in federal court Tuesday in hopes of settling a bitter lawsuit that has gone on for months.

The two sides were scheduled to discuss ideas for how home-sharing websites, like Airbnb, might be able to verify which of their users completed San Francisco’s mandatory registration process for hosts, which is required of anyone looking to rent out a home for less than 30 days at a time. The issue is of particular concern to home-sharing companies since pending legislation in San Francisco could leave websites vulnerable to hefty fines and criminal penalties if they allow unregistered hosts to post their rentals online.

As the Investigative Unit reported in June, San Francisco lawmakers passed legislation that would allow the city to begin issuing fines and criminal penalties to home-sharing companies. Airbnb, however, filed a lawsuit in June to block the new law.

By law, individuals wanting to rent out their San Francisco home on a short-term basis must remain the primary resident of that home and register with the city’s Office of Short-Term Rentals, which requires a $250 fee every two years.

In May, however, the Investigative Unit found that thousands of short-term rental hosts across the city continue to break the law. While homeowners can face hefty fines and misdemeanor penalties, the Investigative Unit discovered most violators are able to skirt any sort of punishment. Following the Investigative Unit report, lawmakers passed legislation to extend those penalties to the actual websites that are used to post the rentals online.

Two weeks ago, a federal judge ordered those penalties be put on hold until San Francisco and Airbnb can undergo mediation to develop a detailed enforcement plan. During that hearing, the judge requested an agreement be reached by mid-December. He instructed both sides to outline exactly how home-sharing companies, like Airbnb, would be able to check whether a rental is registered in order to purge illegal rentals from their websites.

The Investigative Unit has spent months looking into illegal rentals and the impact to communities across San Francisco. You can read and watch our series of reports by clicking the links below.