Memo to Supervisor Campos
May 13, 2015
Budget and Legislative Analyst
25
In 2013, the American Community Survey estimated a 5-year average of 8,438 units
as Vacant For Rent in San Francisco, or 3.5 percent of the 244,012 units defined as
the rental market at that time by the Census Bureau.
22
Based on the model
developed for this analysis and the 5-year average Vacant For Rent in 2013
reported by the American Community Survey, the 1,922 commercial hosts renting
entire units for over 58 days a year would reduce the San Francisco rental stock by
an amount equal to 14.8 percent of the 8,438 units Vacant For Rent Citywide in San
Francisco under the primary scenario assumptions. The range of this impact is
between 11.0 and 23.2 percent based on the lowest to highest impact scenario
assumptions. Rentals for private and shared rooms would reduce the available
rental stock even further.
While commercial short-term rental hosts appear to be beating the median rents
across the City in the data we examined, the Budget and Legislative Analyst also
compared short-term rental revenues to the median $3,750 rental market rate in
2014.
23
Comparing data to this market rate, there were a total of 508 units in
December 2014 beating the market rate—286 entire rooms, and 222 private
rooms.
There were also about 200 units that generated just slightly less revenue than the
median market rate. For example, a commercial entire home in the Castro which
earned an average of approximately $330 per night, and was booked an estimated
134 nights per year earned about $3,690 per month, or slightly less than the 2014
City-wide median rent of $3,750. However, if the unit was booked just three more
nights in the year or charged higher rates at other times of year, the short-term
rental listing would be more profitable than the long-term market rates. Thus, the
short-term rental market can offer similar financial compensation with an added
flexibility in living arrangements over the long-term rental market.
The data from December 2014 shows that over two-thirds of the hosts could have
potentially earned more by listing their units in the long-term rental market if their
unit could have commanded the then median market rate of $3,750.
24
However,
other factors affecting this calculation include:
22
The American Community Survey (ACS) is conducted annually by the U.S. Census Bureau. Compared to the
relatively comprehensive 10-year Census, the ACS is a “mandatory ongoing statistical survey that samples a small
percentage of the population every year.” The ACS selects approximately 1-in-480 addresses to mail 3.5 million
questionnaires annually. While this is a significant number of individuals and addresses surveyed, it still relies on
statistical assumptions, which result in a margin of error for every ACS estimate. The ACS Rental Vacancy figures
include all units listed for rent but currently not occupied and all units that are rented but have yet to be occupied
by the incoming tenant. The total number of units that are vacant but have incoming tenants is expected to be
small, but does somewhat inflate the size of the available rental units listed on the market.
24
Zillow.com, San Francisco Home Prices & Values. Accessed on May 10, 2015 at http://www.zillow.com/san-
francisco-ca/home-values/
24
Zillow.com, San Francisco Home Prices & Values. Accessed on May 10, 2015 at http://www.zillow.com/san-
francisco-ca/home-values/