Not in SF. If you don't occupy the place you short-term rent, during the time you rent it, you may only legally rent it for 90 days per year. What's more, if the place you rent is covered by rent stabilization, it is illegal to make more in rent per month than you pay to your landlord each month. That is to say that you can only legally cover rent through short-term rentals; you may not turn a profit.
> However, in an earthquake-zone (which I recall California is), isn't it risky to build skyscrapers and other large structures?
The Transamerica Pyramid [0] (and every other skyscraper in FiDi) survived the 1989 earthquake. So, I'mma say "No, not significantly more risky." :)
For a more recent example, the Salesforce Tower [1] is (reportedly) well under way to completion.