The San Francisco Board of Supervisors voted Tuesday to legalize the growing trend of turning homes into ad-hoc hotels by passing the “Airbnb law,” which places some restrictions on the controversial practice.

“The status quo isn’t working; we have seen an explosion in short-term rentals,” Board President David Chiu said in introducing the law he spent more than two years crafting.

San Francisco has long barred residential rentals of less than 30 days. The new legislation now allows them, with several caveats.

The law allows only permanent residents to offer short-term rentals, establishes a new city registry for hosts, mandates the collection of hotel tax, limits entire-home rentals to 90 days per year, requires each listing to carry $500,000 in liability insurance, and establishes guidelines for enforcement by the Planning Department. The measure, which passed 7-4, is slated to take effect in February.

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