The new 'Airbnb law', a first of its kind, has formally been in effect in San Francisco since October 7, 2014. The law was passed at San Francisco's City Hall, legalizing previously illegal short term rentals in the city. Although some regulations have been placed on frequent users, both critics and supporters of home sharing are keen to see how the results will play out in the next year. What exactly does this new law entail? For one, only permanent San Francisco residents could participate in the practice and each property is required to hold at least $500,000 in liability insurance. Paying the city's 14% hotel tax will also cement its growth towards legalization. These limits aside, hosts now have the right to share their home in San Francisco, a practice they believe significantly impacts the community as well as the local economy.

Photo credit: Sam Wolson, SF Gate

What it means for vacation rental hosts and guests

Prior to the City Hall hearing, hosts, guests, leaders and supporters alike gathered in the Civic Center Plaza where they were able to share stories and voice their support for why home sharing made a huge difference in their lives.

Older hosts made a case that it has provided them an additional source of income to help pay off their mortgage, medical bills and other personal expenses. Legislators expressed concern around the legalities of home sharing, claiming it violates leases and removes scarce housing stock, contributing to the housing crisis.

What vacation rentals can do for the local economy

Business owners have also reasoned that the practice helps promote tourism in San Francisco, with home sharers becoming a growing target market for many local businesses. In other words, adventurous and open-minded travelers visiting San Francisco are likely to explore local restaurants, tour agencies and other events off the beaten path. Bringing guests into your home can foster economic growth in your city.

Critics worry that the practice will change the character of San Francisco's residential neighborhoods and will continue to do so across the world.

Services such as Uber, Lyft and even are some of the big names out there that encourage open communication and unique, social experiences. Home sharing has continued to lead in the sharing economy space with many vacationers keen to learn about a city through the eyes of a local host.

Only time will tell how the new “Airbnb law" will roll out in the months to come. But having already benefited home sharers, business owners and supporters in the past, there's no doubt vacation rentals and non-traditional accommodation will continue to play a vital role in tourism across the world.

Looking to book a short term rental in your city? There's an accommodation style and budget for everyone. To get the ultimate experience out of your stay, be sure to head to and choose from millions of vacation homes and temporary furnished apartments.