San Francisco and Airbnb Reach Agreement to Settle Lawsuit

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San Francisco City Attorney Dennis Herrera announces a settlement in a lawsuit filed against the city by Airbnb and HomeAway. (Eli Wirtschafter/KQED)

San Francisco and Airbnb have reached an agreement to settle the short-term rental company's lawsuit against its home city.

The settlement ends a court battle over a San Francisco ordinance that holds short-term rental companies liable for listings that are not registered with the city, as required by law. Under the settlement, hosts will be able to register with the city on the Airbnb or HomeAway platforms.

"That goes to our desire to have certainty, for hosts to have visibility and a clear understanding of what they're supposed to do to comply with the existing regulatory structure in San Francisco," said Chris Lehane, head of global policy and communications for Airbnb.

Currently, San Francisco residents hoping to rent out their homes or apartments on a short-term rental website are required to register in person with the city. Encouraging and enforcing registration has remained a challenge for the city, and estimates show that less than a quarter of San Francisco hosts have actually signed up.

Hoping to push short-term rental platforms to become more involved in overseeing registration, San Francisco supervisors passed an ordinance holding platforms criminally liable if they posted bookings from unregistered hosts. Airbnb and HomeAway challenged that law in federal court last June.

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Under the agreement announced Monday, hosts will have to post their city registration number before listing a home, and HomeAway and Airbnb will send the city a monthly update of all San Francisco listings, to ensure that the hosts have registered.

"This settlement ensures that the two largest rental platforms in San Francisco will only include legal listings, and that the city has the tools for quick and effective enforcement," City Attorney Dennis Herrera said.

Airbnb says the new registration system should be up and running early next year. The settlement still needs approval from the Board of Supervisors and Mayor Ed Lee, who signaled approval of the settlement in a statement Monday, calling it a "significant leap forward for enforcement of our short-term rental laws."