$2.25 Million Settlement For Renting SF Apartments On Airbnb

SAN FRANCISCO, CA — The city of San Francisco has reached a $2.25 million settlement with two property owners accused of illegally renting 14 apartments on Airbnb for nearly a year, City Attorney Dennis Herrera announced Monday.

In addition to paying a fine of $2.25 million, landlords Darren and Valerie Lee agreed to an amended injunction prohibiting them from renting out any of the more than 45 apartments in 17 buildings they own as short-term rentals until at least May 2025.

The settlement and amended injunction were filed in San Francisco Superior Court Monday. The Lees do not admit in the settlement to having engaged in any wrongdoing. Their lawyer was not immediately available for comment.

Herrera said, "This outcome frees up more homes for long-term tenants and stops unfair competition in the marketplace. The serious financial penalty is an important deterrent.

"Most importantly, we preserved more than 45 housing units to be used as homes, not hotel rooms," he said in a statement.

Under city law, homeowners can provide short-term rentals of less than 30 days, such as those made available through Airbnb, on only one housing unit and that unit must be the owner's own residence.

The case against the Lees stemmed from a lawsuit Herrera filed against the couple in 2014 for allegedly illegally converting a building on Clay Street to short-term rentals after using the Ellis Act to evict tenants.

That lawsuit ended in a settlement in 2015, in which the Lees agreed to pay $276,000 and to abide by an injunction prohibiting them from violating the city's short-term rental law on the buildings they own.

Herrera alleged in a filing in May of this year that between May 2015 and April 2016, the couple violated the law and the injunction by advertising short-term rentals on 14 units on Airbnb for 2,851 days and renting the units for 2,271 nights, for a profit of more than $700,000.

The city alleged the apartments were rented in the names of friends, relatives and associates of the Lees who were posing as the tenants for Airbnb hosts of the units.

It alleged the apartments were staged to appear as if tenants lived there, but every unit had the same staging with the same Costco food items scattered about, the same arrangement of breakfast dishes in the kitchen sink, the same collection of shoes and clothes in closets and the same house plants.

The filing originally sought a fine of $5.5 million, made up of $750 for each day each apartment was offered and $1,500 for each day an apartment was rented.

Herrera said the $2.25 million settlement will cover the costs of the investigation and fund future consumer protection enforcement, including enforcement of the short-term rental law.

The stipulated injunction filed today amends the original 2015 injunction.

(Get Patch real-time email alerts for the latest news from your California neighborhood. Also, download the free Patch iPhone app or free Patch Android app. Also, be sure to follow your local Patch on Facebook!)

Also See:

• Apple Has Over 600 Job Openings In The Bay Area Right Now
• $770 Million In Unclaimed Money Held By CA
• List Of All ‘Diners, Drive-Ins and Dives’ Restaurants In Northern California
• The 100 Best Places To Live In California Ranked 2018
• Please Don't Help My Kids

— Bay City News; Image via Shutterstock