City considers lifting restrictions on short-term rentals while practice abounds

Daniel Chang/Staff
The Rent Stabilization Board has previously discussed the issue of short-term rentals.

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A month into summer break, those staying in Berkeley for the summer can still find scores of sublet listings on Craigslist and Airbnb.

In March, rising UC Berkeley sophomore Aradhana Sachdev posted on Craigslist to sublet her room in a shared house for the summer. After several offers fell through, a friend suggested that Sachdev put a listing on Airbnb. Sachdev had one woman stay for a week and another for an entire month. In June, Sachdev was still looking for a subletter for the month of July.

“I’ve been looking for a subletter since the time I got the house in March,” she said. “It’s really hard to find a subletter.”

Airbnb, FlipKey and other short-term rental sites are some of the many strategies Berkeley residents use to find short-term leases. While some use short-term subletting to make a profit, others are just trying to cover costs — a matter that has become especially prominent as the city considers whether to change regulations on short-term subletting.

According to the Berkeley Municipal Code, it is illegal to rent out rooms and apartments for fewer than 14 days on websites such as Airbnb. Igor Tregub, the vice chair of the Berkeley Housing Advisory Committee, said this is because units rented out on a very short-term basis are operating as hotels without paying a hotel occupancy tax and can go against the goals of rent control by taking affordable housing units off the market.

Rent control ordinances place a mandated rent ceiling on certain housing units. This prevents the property owner from raising the rent as long as the original tenant’s name is on the lease. When the last original tenant moves out or removes his or her name from the lease, the property owner can raise the rent to market value.

“The more affordable the unit is, the more incentive the (owners) have to rent them out for short-term leases through platforms like Airbnb,” Tregub said. “They can gain significantly more profits doing that than renting units under rent control.

Berkeley City Council is considering changing this ordinance to allow rentals of fewer than 14 days, with some restrictions. According to Tregub, the city rarely enforces the law partly because of a lack of reporting.

While some use Airbnb to make large profits, other property owners, especially single-family homeowners, use the site to supplement their own income to make ends meet, Tregub said. While Tregub acknowledges that there are problems with having such a large “black market” of rentals taking affordable housing off the market, he said he hopes to find a solution that allows people who need subletting to supplement their rent to stay in Berkeley.

Sachdev said that the money she’s receiving from her Airbnb subletters is less than her monthly rent but that she knows several people who have tried to make a profit through Airbnb by charging more than the rent they pay to their landlord.

For instance, rising UC Berkeley sophomore Jackie Tarsitano, who is renting a room in a house for the summer for what she thinks is a fair price, said she almost overpaid for a different place by $200. Tarsitano realized this when she discovered that the tenant was planning to charge a friend $200 less for the same place.

“I think people try to earn a profit,” she said. “I was very naive going into it. I waited and realized that he was going to charge her so much less. People will try to take advantage of you, so you have to look around.”

Sid Lakireddy, president of the Berkeley Property Owners Association, said he doesn’t think the use of Airbnb among tenants is widespread. Lakireddy believes that property owners should be allowed to use Airbnb, but not tenants.

“It’s a lot of work for a property owner to do Airbnb, and if they feel like they can make more doing it, I don’t think we should stop them,” he said. “If a tenant is doing it, that’s wrong because they’re using somebody else’s property to make a profit.”

At its June 9 meeting, City Council heard various arguments for and against the idea of legalizing short-term leases of fewer than 14 days. About 27 public commenters were lined up to speak. The meeting ended, however, before the council could take action. The council will resume the discussion at its upcoming Tuesday meeting, where it will potentially decide whether to move forward with the proposal.

Contact Sonja Hutson at [email protected].