Rent Control and the Rent Board
Most San Francisco tenants enjoy the benefits of rent control, which keeps their rents affordable while they live in their apartment. Under rent control, a landlord can only raise the rent a certain small percentage each year and they can only evict a tenant for one of 16 just causes.
Below is a quick guide to the ordinance that governs rent control and the city agency, the Rent Stabilization and Arbitration Board (more commonly known simply as the Rent Board), which oversees the enforcement of that ordinance.
Rent Control was passed in San Francisco on June 13, 1979 (It’s similar to laws passed in many locations throughout the country in the 70’s to protect renters from unaffordable rent increases and to provide just cause eviction protections.
There is no vacancy control in San Francisco, so when a tenant moves out, a landlord can unfortunately raise the rent to market value.
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How to Know If You Are Covered by Rent Control
Basically, all buildings built before June, 1979 ((If you’re not sure when your building was constructed, check online at Property Information Map to check the date it was built) that have two units or more (and have no rent restrictions controlled by the Govt) are covered under rent control.
Some exceptions include:
Condo conversions: If the building was condo-converted once the original owner sells it, it loses rent control.
A single-family dwelling is under rent control only for tenants who moved in before January 1, 1996. Otherwise, Single Family homes are NOT covered (due to state law).
However, if you live in a single-family dwelling and there is an in-law unit attached to it, or a garage or basement apartment (whether or not this other unit is legal), then your building is considered to have two units and you are fully protected under rent control.
Also, if the landlord is renting out individual rooms in a single-family dwelling (each tenant has a separate agreement with the landlord and pays rent to them separately), then it’s under rent control.
Other Units NOT covered by rent control include:
Units or rooms in hospitals, convents, monasteries, extended care facilities, asylums, residential care facilities for the aged, and school dorms.
Live/work lofts.
Units that have undergone “substantial rehabilitation.” The unit must be older than 50 years and be condemned or not qualify for a certificate of occupancy. Landlord must file with the Rent Board.
Units or rooms in non profit cooperatives, owned and controlled by a majority of the residents.
Dwelling units solely owned by a nonprofit benefit corporation, the majority of whose board members are residents of the dwelling unit and where the bylaws require that rent increases be approved by a majority of the residents.
Units in project-based, government-assisted or regulated housing (e.g., HUD or SF Housing Authority). See here to learn about rent increase and eviction protections for these buildings.
About the Rent Board
The Rent Board, the body charged with enforcing the rent ordinance and with hearing tenant and landlord complaints pursuant to the law, is governed by a six member commission (one appointed by the Mayor: two tenant advocates, two landlord advocates and one neutral). There are also five alternates to fill in for these folks when needed. These commissioners formulate the everyday policy of the board as well as hear appeals on cases that tenants and landlords file.
On a day-to-day basis, the Rent Board has counselors available to answer questions. Counselors cannot give legal advice nor can they take a side (either with tenants or landlords). That’s why they often refer tenants to the Housing Rights Committee or another tenant group in the City. They can give you the basic facts or recommend a petition for you to file to address your complaint.
Rent Increase Licenses
Check to see if your Landlord has an updated license here.
Lawful Rent Increases
The San Francisco rent ordinance limits rent increases for apartments covered under the ordinance, basically those built before June 13, 1979 in a building with more than one unit. (If you do not live in a rent-controlled apartment, there are no restrictions on rent increases other than those imposed by your lease or rental agreement. If you have a month-to-month lease, the landlord could raise the rent every month, though if it’s an increase of more than 10% they would have to give a 90-day notice to raise it.)
Some increases in rent-controlled apartments (i.e., pass-throughs that are not the normal allowable yearly rent increase) require Rent Board approval, others do not. It’s a good idea to check with the Rent Board to determine if your passthrough is legal.
Annual Allowable Rent Increase
Landlords of a rent-controlled building are allowed annual rent increases set by the Rent Board. On March 1st of every year, the Rent Board publishes the allowable rent increase for the following twelve months. Annual rent increases do not require Rent Board approval. However, a tenant must be given a written 30-day notice of a rent increase (unless it’s more than 10%, then it’s a 90-day notice). Here are the current annual allowable rent increase percentages.
Banked Rent Increases
Banking is when a landlord chooses not to impose a rent increase at the time it becomes due (on the tenant’s anniversary date), but instead imposes it at a later time, which could be years later. Increases can be banked back to the beginning of someone’s tenancy. A new landlord can charge banked increases that the previous landlord didn’t take. If the increase is more than 10%, then the landlord must give a 90-day notice, as per CA Civil Code 827 (3). 10% or less, it’s a 30-day notice.
To calculate the proper amount of a banked increase, it’s necessary to know the allowable rent increase for each year. When figuring out the banked increase, add up all the percentages for the years the landlord didn’t raise the rent and multiply that amount by your current rent (called the “base rent”) minus any passthroughs, and you have the amount of the new rent.
Utility, Operating & Bond Pass Through Rent Increases
You might receive a notice from your landlord saying that they are passing on the cost of utilities (in situations where he pays the utilities), of operating and maintenance, or of a bond that was passed by the voters at election time.
Utilities passthrough: the landlord must either file a petition (if they are using the last two utilities bills as justification for the increase) or, if not, fill out a work sheet on the Rent Board site and submit that to the tenant.
Operations and maintenance passthrough: the landlord must file a petition with the Rent Board for approval of the passthrough. The tenant does not have to pay for the increase unless it is approved, but the increase will be retroactive back to the date of the notice of the increase from the landlord.
Bond passthrough: the landlord has to serve a notice at the time of a rent increase that includes a worksheet. Bond passthroughs include general obligation and water bonds. For water, here is more info on that passthrough.
Hardship Petition: For all of the above passthroughs, except for the general bond passthrough, a tenant can file a hardship petition. Basically, a hardship is based on whether a tenant is already paying 1/3 of their income on rent or has excessive expenses, such as medical expenses. A tenant should qualify if they are on “means-tested public assistance, such as Social Security Supplemental Security Income (SSI), General Assistance (GA), Personal Assisted Employment Services (PAES), CalFresh (SNAP/Food Stamps) or California Work Opportunity & Responsibility to Kids (CalWORKS).” Quote is from the Rent Board website.
If a tenant does not pay utilities (it’s either in their lease or the practice in their tenancy) and the landlord suddenly wants them to, then the tenant can object on the grounds that it is a unilateral imposition of a change in terms of their lease and they are under no obligation to pay it, as the rent ordinance rules and regulations.
Capital Improvement Rent Increases
A landlord may petition the Rent Board to pass on to tenants the costs of renovations to the property. This includes work that prolongs the life of the building, such as roof replacement, exterior painting, seismic retrofitting, etc. Capital improvement rent increases cannot occur without the Rent Board’s approval. A landlord must provide proof of the cost of the project. Info on what work was done and to which tenant the increase applies must also be included.
The Rent Board then sets a hearing date and notifies affected tenants by mail at least 10 days prior to the hearing. The tenant may file a written response at any time before the hearing. Tenants have the opportunity at the hearing to argue against the petition.
It’s important that as many tenants in the building as possible attend the hearing. Information from both landlord and tenants and/or their representatives may be submitted. The Hearing Officer will question the landlord and review the documents, then open the record to tenant questions and evidence. The Hearing Officer will consider the past history of rent increases, as well as failure to perform ordinary repairs, and to comply with applicable state and local law.
At the hearing, a tenant can raise objections. Allowable objections to the landlord’s petitions include:
The work was not done at all, was shoddy, was done without permits, was done a long time ago, or was never completed.
The work was either necessary only because of deferred maintenance (the landlord neglected repairs), or was unnecessary and only undertaken for purposes of “gold plating.”
You moved in within six months of the landlord doing the work and therefore do not have to pay.
You objected to the work; it was not done in response to health or safety concerns or to reduce maintenance costs.
The landlord didn’t spend as much as they claim or got insurance money to cover the costs.
The work is overly luxurious or more costly than required.
Note: A landlord cannot pass on the cost of replacing appliances they own and that they charge a use fee for, e.g., coin-operated washers and dryers. Appliances may be amortized when part of a remodeled kitchen or if they are new services or appliances the tenant did not previously have. If the appliance is a replacement for a current one, the cost will not be amortized as a capital improvement, but will be considered part of operating and maintenance expenses, except for EPA-energy-star compliant appliances.
The Hearing Officer will write a decision within 30 days and send copies to all parties. Both sides have 15 days from the notice of the decision to appeal.
Capital Improvement Passthrough Rules
Buildings with 1 to 5 units
100% of the certified costs of capital improvements may be passed through to the tenants. Amortization (period over which payments are stretched) schedules are 10, 15 and 20 years. Capital improvement rent increases are limited to 5% of base rent at the time the petition was filed or $30, whichever is greater, in any 12-month period.
Buildings with 6 or more units
Only 50% of the costs of improvements can be passed through. Amortization schedules remain 7 and 10 years; rent increases are limited to 10% of the tenant’s base rent at the time the petition was filed or $30, whichever is greater, in any 12-month period. In place of the above, a tenant may elect to have 100% of the costs passed through to the tenant, with an annual limitation of 5% and a total limitation of 15% of the tenant’s base rent applicable to the capital improvement rent increases. (Note: This option may be chosen within 15 days after a decision on a 50% passthrough is mailed to the tenant.)
100% of the cost of energy conservation work approved by the Commission on the Environment may be passed through and there is no annual limit on the amount of the passthrough. (At present, EPA energy-star-compliant refrigerators are the only items approved for certification.)
All capital improvement petitions which request certification of more than $25,000 in costs must include copies of either competitive bids for the work or copies of time and materials billing for work performed by all contractors and subcontractors. Otherwise, the landlord must pay for an estimator hired by the Rent Board. Rent Board may not certify work required to correct code violations for which an NOV (Notice of Violation from the Dept. of Building Inspections) remained unabated for 90 days unless the landlord made timely good faith efforts to complete the work within the 90-day period.
Seismic Retrofit Pass Throughs
Currently, owners of soft story buildings are required to retrofit them against earthquakes. Unfortunately, 100% of the certified cost of seismic work required by law (and other work required by laws enacted after 11/14/02) may be passed through, subject to the 10%/$30 limit. Amortization schedule is 20 years. (Note: Seismic work not required by law follows the regular schedule according to building size).
A tenant can apply for a hardship once they receive the written notice of a rent increase.
Soft Shell Retrofit Pass Throughs
Building owners are required to seismically retrofit all “soft-story” buildings under Building Code 34B. These are generally wood frame buildings built before 1978 with at least 2 stories consisting of 5 or more units above the soft story (usually a garage or large commercial space). Many tenants will temporarily lose services such as parking or storage space. Because the work is mandatory, tenants cannot file a Decrease in Services for these losses. However, the landlord is required to provide some compensation and a 30-day written notice of the temporary loss of the service(s).
Which services apply (such as parking/garage) and how compensation is to be calculated is defined by SF Administrative Code 65A. Since these buildings should be under rent control, tenants get relocation money and a proper notice. If they don’t get relocated, they can file for a decrease in services for the noise and mess, especially if their apartments are directly affected. Landlords can pass on 100% of the cost, but low-income tenants can file for a hardship with the Rent Board.
Unlawful Rent Increases
A rent increase under a legal cause can still be wrongful and therefore challenged. Examples are if the landlord has miscalculated your base rent, or they are charging for “banked rent” that has already been charged, or the notice requirements have not been met. There are also reasons why a rent increase may outright violate the law however, including:
Rent Gouging
It is illegal under Rent Control for a Master Tenant to charge a subtenant more than the master tenant pays to the landlord. When a master tenant subleases the entire rental unit and does not share the rental unit with the subtenant(s), the master tenant may not charge a subtenant more rent than what the master tenant is currently paying to the landlord.
Above the Allowable Percentage
This is the most key rent increase protection. The amount your landlord raises your rent, must conform to what the Rent Board has determined is the percentage that it must be capped at for the year.
More Than One Rent Increase in a Year
Rent Control allows for an Annual limited rent increase only. This means that if your landlord has already issued you an increase that meets the percentage allowed for this year, they can not issue one again until the following year.
Submitting Petitions to the Rent Board
Challenging a Wrongful or Unlawful Rent Increase
If your landlord violates the rent ordinance by imposing an illegal rent increase, the Rent Board may be able to provide you with a remedy. You will need to file a petition under a specific category with them, and they will determine whether the rent increase is legal or not.
Petitions Tenants Can File With The Rent Board:
Rent Gouging (Subtenant Petition)
If you received a service (garage space, laundry room, etc.) when you moved in and it’s suddenly taken away, you can file for a reduction in rent to compensate you for the loss of that service. If your landlord is not doing repairs and you have requested them in writing and they either refuse to do them or ignore your repeated requests, you can file to have your rent reduced until they fix things. The administrative law judge may also grant you a reimbursement of a portion of your rent for the time that you have lived with the lack of repairs, but only if you can prove that the landlord knew about the problem. That’s why having copies of any correspondence with the landlord is important.
Failure to Repair and Maintain
If you received a notice of rent increase within the last 60 days and do not believe you should pay it because the landlord has failed to do requested repair and maintenance that is required by law.
If you receive an eviction notice that is not based on just cause or is not delivered or written up properly, then you can file this petition. The Rent Board cannot stop an eviction, it doesn’t have that power, but it can advise the landlord that an attempt appears to be illegal. That could be a useful tool in court.
Challenging a Passthrough Rent Increase
If a landlord suddenly wants you to pay for PG&E or water and you never paid for it before or they want to increase your share, this might be the petition for you.
For a rent increase above the allowable annual percentage, you will want to file this. The Rent Board can also check your rent and make sure it’s the right amount based on your initial rent and the allowable increases during your tenancy. Useful for determining if banked increases (when a landlord takes increases they didn’t take in previous years) are correct.
For all of the above passthroughs, except for the general bond passthrough, a tenant can file a hardship petition. Basically, a hardship is based on whether a tenant is already paying 1/3 of their income on rent or has excessive expenses, such as medical expenses. A tenant should qualify if they are on “means-tested public assistance, such as Social Security Supplemental Security Income (SSI), General Assistance (GA), Personal Assisted Employment Services (PAES), CalFresh (SNAP/Food Stamps) or California Work Opportunity & Responsibility to Kids (CalWORKS).”
Hearing Process
After a petition is filed, a hearing is set within 45-60 days or longer, depending on the back log. Tenants receive notice 10 days before the hearing. Some cases start with mediation, but a tenant can ask to go right to arbitration.
At the mediation, the tenant and the landlord present their cases. No attorney is necessary. Tenants can have legal or non-attorney representatives, if desired, and witnesses.
The Judge tries to negotiate a settlement. If that fails, arbitration is held, again with both sides presenting their cases and evidence. The Judge mails the decision to both parties weeks later. An appeal can be filed by either party within 15 calendar days. Rent Board Commissioners review the case within 30 days. If they accept the appeal, they “remand” it back to a judge or hear it themselves.
What’s Allowed at Hearing
You (the tenant) can do the following at your arbitration hearing:
Have witnesses and call them to testify on your behalf.
Cross-examine the other side’s witnesses. Landlords can cross-examine your witnesses, too. You can expose any contradictions of these witnesses.
Introduce exhibits into the record.
Disprove any evidence introduced by the other party.
Presenting Your Case
Don’t alienate the judge. Be polite and present your case reasonably.
Don’t be rude or obnoxious to your landlord, it won’t help your case.
Keep your testimony short and to the point. Make sure you answer questions from the judge.
As the person filing the petition, the tenant has the burden of proof so document everything. Bring photos, letters of complaint to the landlord, written testimony from witnesses who can’t be there, etc. If you need them, bring copies of legal documents such as property ownership, Department of Building Inspection violations, etc.
Appeals
If you’re appealing a decision of a Rent Board judge, it will go before the Rent Board Commission, which is composed of five persons: Two landlord reps, two tenant reps and one “neutral.”
You will not be able to testify at the Commissioners’ hearing. You must submit copies of all your documentation for the Commissioners (the appeal form specifies the number of copies). Since you won’t get to speak, what you submit must be convincing and thorough. If the Commissioners grant your appeal, a new hearing will be held within 45 days.
Meanwhile, the first decision is binding, except for any monetary matters (e.g., a proposed rent increase). After the appeals process at the Rent Board is exhausted, a tenant then heads for Small Claims or Superior Court.
How to Prepare for the Hearing
Be prepared. Think about what you want to say. Write it down.
Have a written history of your case: For example, in an illegal rent increase petition, have proof of all the rent you’ve paid, including all the increase notices, canceled checks and letters to and from your landlord regarding your rent increases.
Write down all the questions you want to ask the landlord.
Get together with all your witnesses (and with fellow tenants if you filed the case together) before the hearing to go over what you’re going to say and what papers you’re bringing to support your case.
Gather all the papers you need from every source in order to adequately present your case. Plan on your landlord denying your allegations, so be prepared to prove everything. Try to have all your papers organized when you go into the hearing so that you don’t look disorganized. Have copies for the judge and the landlord.
Rent Board Fee
Tenants and landlords in rent-controlled apartments split the annual Rent Board fee, which the city collects to fund the rent board. If a tenant does not pay it, the landlord cannot evict them (not a just cause). The landlord would have to go to Small Claims or deduct it from the yearly interest on their Rent Board fees since November 1, 1999 may be banked and collected in a later year. Fees for years prior to 99 cannot be banked. Here are the years and amounts that can be banked. The landlord must either deduct the fee from the tenant’s next security deposit interest payment or bill the tenant directly within 30 days of receipt of the bill from the Rent Board.
For all of the above passthroughs, except for the general bond passthrough, a tenant can file a hardship petition. Basically, a hardship is based on whether a tenant is already paying 1/3 of their income on rent or has excessive expenses, such as medical expenses. A tenant should qualify if they are on “means-tested public assistance, such as Social Security Supplemental Security Income (SSI), General Assistance (GA), Personal Assisted Employment Services (PAES), CalFresh (SNAP/Food Stamps) or California Work Opportunity & Responsibility to Kids (CalWORKS).” Quote is from the Rent Board website.
If a tenant does not pay utilities (it’s either in their lease or the practice in their tenancy) and the landlord suddenly wants them to, then the tenant can object on the grounds that it is a unilateral imposition of a change in terms of their lease and they are under no obligation to pay it, as the rent ordinance rules and regulations.
Rent Increases in Non Rent Controlled Housing
Even if you are not covered by rent control, you likely have some form of protection from arbitrary and/or extreme rent increases.
If you live in affordable housing, the programs have rules restricting rent increases (for instance rent must be capped at 30% of income in Section 8 and Public Housing). Other programs such as inclusionary zoning, Below Market Rate, Tax Credit housing also have limits. Consult program rules to see how much rent can be raised in these buildings.
If you live in Market Rate housing that is not covered by Rent Control (built after 1979 etc), rent increases can not exceed 8.8 percent annually, according to state law.