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(a) Base Rent.
(1) That rent which is charged a tenant upon initial occupancy plus any rent increase allowable and imposed under this Chapter; provided, however, that;
(A) Base rent shall not include increases imposed pursuant to Section 37.7.
(C) Base rent for tenants of RAP rental units in areas designated on or after July 1, 1977, shall be that rent which was established pursuant to Section 32.73-1 of the San Francisco Administrative Code. Rent increases attributable to the City Administrator's amortization of an RAP loan in an area designated on or after July 1, 1977, shall not be included in the base rent.
(D) Good Samaritan Status. As of February 8, 2011 and after, Good Samaritan occupancy status occurs when a landlord and new tenant agree in writing for the tenant to commence temporary occupancy following an emergency such as fire, earthquake, landslide, or similar emergency situation, that required unexpected vacation of the tenant's previous unit, and the agreement includes a reduced rent rate for the replacement unit for a specified period of time up to twelve (12) months ("Original Good Samaritan Status Period"). "Reduced rent rate" means the base rent the tenant was paying for the previous unit at the time of the emergency or an amount up to ten (10) percent above that amount, except that if the owner of the previous unit is the same as the owner of the replacement unit then "reduced rent rate" means the rent the tenant was paying for the previous unit at the time of the emergency. For Good Samaritan Status to exist, the written agreement as referenced in this Subsection must include a statement that the agreement is temporary in nature, must refer to this Subsection, and must state that the tenant has been displaced from his or her previous unit as certified in Subsection (iii), below.
(i) The landlord and tenant may agree, in writing, to extend the reduced rent rate for a period of time beyond the Original Good Samaritan Status Period, up to a total of twenty-four (24) months from the beginning to the end of all Good Samaritan Status ("Extended Good Samaritan Status Period").
(ii) By accepting occupancy in Good Samaritan Status, a tenant does not waive any right to compensation or any right to return to the tenant's previous unit that he or she otherwise may have under Chapter 37 or other source of law, based on the emergency vacation of the tenant's previous unit.
(iii) Good Samaritan Status may only be utilized upon certification in writing by one of the following officials, or his or her designee, that as a result of fire, earthquake, landslide, or similar emergency situation, the tenant's previous unit is in such condition that, as a matter of public health and safety and as a matter of habitability, the tenant cannot or should not reside there until the unit has been appropriately repaired:
Mayor;
Fire Chief;
Director of the Department of Building Inspection;
Director of the Department of Public Health; or
Other Official as authorized by law.
The Rent Board shall make a form available, that the Official may use for this purpose.
(iv) The tenant's rent increase anniversary date for a Good Samaritan occupancy shall be the date the tenancy commenced; the first annual allowable increase shall take effect no less than one year from the anniversary date, but when imposed after one year, shall set a new anniversary date for the imposition of future rent increases. The base rent used for calculation of the annual allowable increase pursuant to Section 37.3(a)(1) during a Good Samaritan occupancy, shall be the reduced rent rate in effect on the day the Good Samaritan occupancy commences.
(v) The landlord may serve a notice of termination of tenancy under Section 37.9(a)(16) within 60 days after expiration of the Original and any Extended Good Samaritan Status Period. Alternatively, within sixty (60) days after expiration of the Original and any Extended Good Samaritan Status Period, if the Good Samaritan rental agreement states the dollar amount of the tenant's initial base rent that can be imposed after expiration of the Original and any Extended Good Samaritan Status Period, the landlord may give legal notice of the rent increase to the tenant and then increase the tenant's rent from the temporary reduced rent rate to the previously agreed upon initial base rent for the unit.
(vi) The Rent Board shall make a form available that explains the temporary nature of tenant occupancy in Good Samaritan Status, and describes the other provisions of Section 37.2(a)(1)(D)(v).
The Good Samaritan landlord shall provide the tenant with this disclosure form prior to commencement of the Good Samaritan tenancy. However, failure by the landlord to provide the tenant with such disclosure form:
• Will not prevent the landlord from serving a notice of termination of tenancy under Section 37.9(a)(16) within sixty (60) days after expiration of the Original and any Extended Good Samaritan Status Period.
• Will not prevent the landlord from serving a notice of rent increase within sixty (60) days after expiration of the Original and any Extended Good Samaritan Status Period, to increase to the previously agreed upon initial base rent for the unit, as provided in Section 37.2(a)(1)(D)(v).
• Will not otherwise impact any rights that the landlord may have regarding the tenancy.
(2) From and after August 30, 1998, the base rent for tenants occupying rental units which have received certain tenant-based or project-based rental assistance shall be as follows:
(A) With respect to tenant-based rental assistance:
(i) For any tenant receiving tenant-based rental assistance as of August 30, 1998 under a program that does not establish the tenant's share of base rent as a fixed percentage of a tenant's income, such as in the Housing Choice Voucher Program or the Over-FMR Tenancy program, and continuing to receive such tenant-based rental assistance thereafter, the initial base rent for each unit occupied by such tenant shall be the rent payable for that unit under the Housing Assistance Payments contract, as amended, between the San Francisco Housing Authority or the Human Services Agency and the landlord (the "HAP contract") with respect to that unit immediately prior to August 30, 1998 (the "HAP contract rent").
(ii) For any tenant receiving tenant-based rental assistance under a program that does not establish the tenant's share of base rent as a fixed percentage of a tenant's income, such as in the Housing Choice Voucher Program or the Over-FMR Tenancy program, and commencing occupancy of a rental unit after August 30, 1998, the initial base rent for each unit occupied by such a tenant shall be the HAP contract rent in effect as of the date the tenant commences occupancy of such unit.
(iii) For any tenant receiving rental assistance under the HOPWA rental subsidy program as of May 17, 2016, and continuing to receive such assistance under the HOPWA rental subsidy program thereafter, the initial base rent for each unit occupied by such tenant shall be the HAP Contract Rent in effect as of May 17, 2016.
(iv) For any tenant receiving rental assistance under the HOPWA rental subsidy program who commenced occupancy of a rental unit after May 17, 2016, the initial base rent for each unit occupied by such tenant shall be the HAP Contract Rent in effect as of the date the tenant commences occupancy of such unit.
(v) For any tenant whose tenant-based rental assistance terminates or expires, for whatever reason, after August 30, 1998, the base rent for each such unit following expiration or termination shall be the HAP contract rent in effect for that unit immediately prior to the expiration or termination of the tenant-based rental assistance.
(B) For any tenant occupying a unit upon the expiration or termination, for whatever reason, of a project-based HAP contract under Section 8 of the United States Housing Act of 1937 (42 USC Section 1437f, as amended), the base rent for each such unit following expiration or termination shall be the "contract rent" in effect for that unit immediately prior to the expiration or termination of the project-based HAP contract.
(C) For any tenant occupying a unit upon the prepayment or expiration of any mortgage insured by the United States Department of Housing and Urban Development ("HUD"), including but not limited to mortgages provided under Sections 221(d)(3), 221(d)(4) and 236 of the National Housing Act (12 USC Section 1715z-1), the base rent for each such unit shall be the "basic rental charge" (described in 12 USC 1715z-1(f), or successor legislation) in effect for that unit immediately prior to the prepayment of the mortgage, which charge excludes the "interest reduction payment" attributable to that unit prior to the mortgage prepayment or expiration.
(b) Board. The Residential Rent Stabilization and Arbitration Board.
(c) Capital Improvements. Those improvements which materially add to the value of the property, appreciably prolong its useful life, or adapt it to new uses, and which may be amortized over the useful life of the improvement of the building.
(d) CPI. Consumer Price Index for all Urban Consumers for the San Francisco-Oakland Metropolitan Area, U.S. Department of Labor.
(e) Energy Conservation Improvements. Work performed pursuant to the requirements of Chapter 12 of the San Francisco Housing Code.
(f) Administrative Law Judge. A person, designated by the Board, who arbitrates and mediates rental increase disputes, and performs other duties as required pursuant to this Chapter 37.
(g) Housing Services. Services provided by the landlord connected with the use or occupancy of a rental unit including, but not limited to: quiet enjoyment of the premises, without harassment by the landlord as provided in Section 10B; repairs; replacement; maintenance; painting; light; heat; water; elevator service; laundry facilities and privileges; janitor service; refuse removal; furnishings; telephone; parking; rights permitted the tenant by agreement, including the right to have a specific number of occupants, whether express or implied, and whether or not the agreement prohibits subletting and/or assignment; and any other benefits, privileges or facilities.
(h) Landlord. An owner, lessor, sublessor, who receives or is entitled to receive rent for the use and occupancy of any residential rental unit or portion thereof in the City and County of San Francisco, and the agent, representative or successor of any of the foregoing.
(i) Member. A member of the Residential Rent Stabilization and Arbitration Board.
(j) Over FMR Tenancy Program. A regular certificate tenancy program whereby the base rent, together with a utility allowance in an amount determined by HUD, exceeds the fair market rent limitation for a particular unit size as determined by HUD.
(k) Payment Standard. An amount determined by the San Francisco Housing Authority that is used to determine the amount of assistance paid by the San Francisco Housing Authority on behalf of a tenant under the Housing Choice Voucher Program (24 CFR Part 982). The term "payment standard" shall also refer to the rent standard used to determine the amount of assistance paid by the Human Services Agency under the HOPWA rental subsidy program (24 C.F.R. Part 574).
(l) RAP. Residential Rehabilitation Loan Program (Chapter 32, San Francisco Administrative Code).
(m) RAP Rental Units. Residential dwelling units subject to RAP loans pursuant to Chapter 32, San Francisco Administrative Code.
(n) Real Estate Department. A city department in the City and County of San Francisco.
(o) Rehabilitation Work. Any rehabilitation or repair work done by the landlord with regard to a rental unit, or to the common areas of the structure containing the rental unit, which work was done in order to be in compliance with State or local law, or was done to repair damage resulting from fire, earthquake or other casualty or natural disaster.
(p) Rent. The consideration, including any bonus, benefits or gratuity, demanded or received by a landlord for or in connection with the use or occupancy of a rental unit, or the assignment of a lease for such a unit, including but not limited to monies demanded or paid for parking, furnishing, food service, housing services of any kind, or subletting.
(q) Rent Increases. Any additional monies demanded or paid for rent as defined in item (p) above, or any reduction in housing services without a corresponding reduction in the monies demanded or paid for rent; provided, however, that passthroughs of the following cost increases pursuant to this Chapter 37 do not constitute rent increases: (1) where the landlord has been paying the tenant’s utilities and the cost of those utilities increases; (2) where the landlord is passing through to the tenant the change in the landlord’s property tax attributable to a general obligation bond in accordance with Section 37.3(a)(6); and (3) where the landlord is passing through to the tenant water rate increases resulting from issuance of water revenue bonds authorized at the November 5, 2002 election in accordance with Section 37.3(a)(5)(B).
(r) Rental Units. All residential dwelling units in the City together with the land and appurtenant buildings thereto, and all housing services, privileges, furnishings, and facilities supplied in connection with the use or occupancy thereof, including garage and parking facilities.
Garage facilities, parking facilities, driveways, storage spaces, laundry rooms, decks, patios, or gardens on the same lot, or kitchen facilities or lobbies in single room occupancy (SRO) hotels, supplied in connection with the use or occupancy of a unit, may not be severed from the tenancy by the landlord without just cause as required by Section 37.9(a). Any severance, substantial reduction, or removal of a housing service, even if permitted under Section 37.9(a), shall be offset by a corresponding reduction in rent. Either a landlord or a tenant may file a petition with the Rent Board to determine the amount of the rent reduction. In addition, a tenant may petition the Rent Board for a determination on whether an Accessory Dwelling Unit proposed to be constructed under Planning Code Section 207.1 would sever, substantially reduce, or remove a housing service, pursuant to the procedures set forth in Section 207.1. The issuance of a permit for construction of an Accessory Dwelling Unit does not, in and of itself, constitute a just cause for the purpose of severing a housing service.
Notwithstanding the preceding paragraph, a landlord may temporarily sever one or more housing services listed in that paragraph in order to perform seismic work required by Building Code "Mandatory Earthquake Retrofit of Wood-Frame Buildings" ("mandatory seismic work") if: (1) the landlord has given the notice to temporarily sever as required by Administrative Code Section 65A.2; (2) the landlord has obtained all necessary permits on or before the date the notice to temporarily sever is given; (3) the housing service(s) will only be severed for the minimum time required to complete the mandatory seismic work and in no event for a longer period than provided by Building Code Section 106A.4.4, Table B; and (4) the temporarily severed housing service(s) will be fully restored immediately upon completion of the mandatory seismic work. For such temporary severance of one or more of the specified housing services due to mandatory seismic work required by Building Code , tenants will not be entitled to a reduction in rent, but tenants shall be entitled to either compensation or a substitute housing service as provided in Administrative Code Chapter 65A.
The term "rental units" shall not include:
(1) Housing accommodations in hotels, motels, inns, tourist houses, rooming and boarding houses, provided that at such time as an accommodation has been occupied by a tenant for 32 continuous days or more, such accommodation shall become a rental unit subject to the provisions of this Chapter; provided further, no landlord shall bring an action to recover possession of such unit in order to avoid having the unit come within the provisions of this Chapter. An eviction for a purpose not permitted under Section 37.9(a) shall be deemed to be an action to recover possession in order to avoid having a unit come within the provisions of this Chapter;
(2) Dwelling units in nonprofit cooperatives owned, occupied and controlled by a majority of the residents or dwelling units solely owned by a nonprofit public benefit corporation governed by a board of directors the majority of which are residents of the dwelling units and where it is required in the corporate by-laws that rent increases be approved by a majority of the residents;
(3) Housing accommodation in any hospital, convent, monastery, extended care facility, asylum, residential care or adult day health care facility for the elderly which must be operated pursuant to a license issued by the California Department of Social Services, as required by California Health and Safety Chapters 3.2 and 3.3; or in dormitories owned and operated by an institution of higher education, a high school, or an elementary school;
(4) Except as provided in subsections (A)-(D), dwelling units whose rents are controlled or regulated by any government unit, agency, or authority, excepting those unsubsidized and/or unassisted units which are insured by the United States Department of Housing and Urban Development; provided, however, that units in unreinforced masonry buildings which have undergone seismic strengthening in accordance with Building Code Chapters 16B and 16C shall remain subject to the Rent Ordinances to the extent that the ordinance is not in conflict with the seismic strengthening bond program or with the program's loan agreements or with any regulations promulgated thereunder;
(A) For purposes of Sections 37.2, 37.3(a)(10)(A), 37.4, 37.5, 37.6, 37.9, 37.9A, 37.10A, 37.11A and 37.13, and the arbitration provisions of Sections 37.8 and 37.8A applicable only to the provisions of Sections 37.3(a)(10)(A), the term "rental units" shall include units occupied by recipients of tenant-based rental assistance where the tenant-based rental assistance program does not establish the tenant's share of base rent as a fixed percentage of a tenant's income, such as in the Housing Choice Voucher Program and the Over-FMR Tenancy program, and shall also include units occupied by recipients of tenant-based rental assistance under the HOPWA rental subsidy program;
(B) For purposes of Sections 37.2, 37.3(a)(10)(B), 37.4, 37.5, 37.6, 37.9, 37.9A, 37.10A, 37.11A and 37.13, the term "rental units" shall include units occupied by recipients of tenant-based rental assistance where the rent payable by the tenant under the tenant-based rental assistance program is a fixed percentage of the tenant's income, such as in the Section 8 Certificate Program;
(C) The term “rental units” shall include units in a building for which either tax credits are reserved or obtained pursuant to the federal Low-Income Housing Tax Credit program under Section 42 of the Internal Revenue Code, 26 U.S.C. Section 42 (“LIHTC”), and/or tax-exempt multifamily revenue bonds are allocated or obtained pursuant to Section 142(d) of the Internal Revenue Code, 26 U.S.C. Section 142(d) (“Bonds”), and that were already tenant-occupied and subject to this Chapter 37 at the time the applicable LIHTC regulatory agreement and/or Bond regulatory agreement was recorded, as follows:
(i) If a tenant’s occupancy of the unit began before the applicable LIHTC regulatory agreement and/or Bond regulatory agreement was recorded, then subsection (C) shall apply to that unit so long as any of the occupants who resided in the unit at the time of the recording still permanently reside there. If the applicable regulatory agreement(s) were recorded on or after January 1, 2018, then the base rent as of the effective date of the ordinance in Board File No. 230770 shall be equal to the rent that was in effect as of the date the recording plus any annual rent increases that may have been allowed under Sections 37.3(a)(1)-(2).
(ii) The tenants in a unit described in subsection (C)(i) shall have a one-time option at any time to opt the unit out of subsection (C), and thereby subject the unit going forward to such rent controls and use restrictions as may apply under the applicable LIHTC and/or Bond regulatory agreement(s). All tenants residing in the unit at the time of the opt-out must consent to the opt-out in writing, on a form prepared by the Rent Board, that advises the tenants of the requirements under subsection (C) and that opt-outs may not be withdrawn. Once an opt-out has occurred in a unit, subsection (C) will not apply to that unit and the unit will be exempt from Chapter 37 for the remaining duration of the applicable regulatory agreement(s).
(iii) This exception for tenant-occupied units subject to LIHTC and/or Bond regulatory agreements is not intended to affect the application of Section 37.2(r)(4) to units where the rent is otherwise controlled or regulated by any use restrictions imposed by the City and County of San Francisco, the Office of Community Investment and Infrastructure, the Housing Authority of the City and County of San Francisco, the State of California Department of Housing and Community Development, or the United States Department of Housing and Urban Development.
(D) The term “rental units” shall include (i) Accessory Dwelling Units constructed pursuant to Section 207.1 of the Planning Code and that have received a complete or partial waiver of the density limits and the parking, rear yard, exposure, or open space standards from the Zoning Administrator pursuant to Planning Code Section 307(l); (ii) New Unit(s) constructed and funded pursuant to Administrative Code Chapter 85; (iii) new dwelling units created pursuant to the density exception set forth in Section 207(c)(8) of the Planning Code; (iv) new dwelling units created pursuant to the HOME-SF Program set forth in Section 206.3(c)(1)(B) of the Planning Code; (v) new dwelling units created pursuant to the density exception set forth in Section 249.94(d)(1) of the Planning Code; and (vi) dwelling units that obtain the exemption from the conditional use authorization set forth in Section 317(c)(10) of the Planning Code.
(s) Substantial Rehabilitation. The renovation, alteration or remodeling of residential units of 50 or more years of age which have been condemned or which do not qualify for certificates of occupancy or which require substantial renovation in order to conform the building to contemporary standards for decent, safe and sanitary housing. Substantial rehabilitation may vary in degree from gutting and extensive reconstruction to extensive improvements that cure substantial deferred maintenance. Cosmetic improvements alone such as painting, decorating and minor repairs, or other work which can be performed safely without having the unit vacated do not qualify as substantial rehabilitation.
(t) Tenant. A person entitled by written or oral agreement, sub-tenancy approved by the landlord, or by sufferance, to occupy a residential dwelling unit to the exclusion of others.
(u) Tenant-Based Rental Assistance. Rental assistance provided directly to a tenant or directly to a landlord on behalf of a particular tenant, which includes but shall not be limited to certificates, vouchers, and subsidies issued pursuant to Section 8 of the United States Housing Act of 1937, as amended (42 U.S.C. Section 1437f), or the HOPWA program (24 CFR Part 574).
(v) Utilities. The term "utilities" shall refer to gas and electricity exclusively.
(w) Victims of Domestic Violence, Sexual Assault, or Stalking.
(1) "Victim of domestic violence or sexual assault or stalking" means any person who has been, or is currently being, subjected to one or more of the following:
(A) "Domestic violence," as defined in Section 13700 of the Penal Code or Section 6211 of the Family Code;
(B) "Sexual assault'' as defined in Sections 261, 261.5, 262, 286, 288a, or 289 of the Penal Code; or
(C) "Stalking," as defined in Section 646.9 of the Penal Code or Section 1708.7 of the Civil Code.
(2) "Protective order" means a temporary restraining order or emergency protective order issued pursuant to Part 3 (commencing with Section 6240) or Part 4 (commencing with Section 6300) or Part 5 (commencing with Section 6400) of the Family Code, Section 136.2 of the Penal Code, Section 527.6 of the Code of Civil Procedure, or Section 213.5 of the Welfare and Institutions Code, that protects the tenant or household member from further domestic violence, sexual assault, or stalking.
(3) "Qualified third party" means a peace officer or victim advocate, employed by a state or local law enforcement agency, or Licensed Clinical Social Worker (LCSW) or Marriage and Family Therapist (MFT), acting in his or her official capacity;
(4) "Written documentation from a qualified third party " means a document signed and dated within the preceding 60 days by a qualified third party stating all of the following:
(A) That the tenant notified the qualified third party that he or she was a victim of domestic violence or sexual assault or stalking;
(B) The time, date, and location of the act or acts that constitute the domestic violence or sexual assault or stalking; and
(C) That the tenant informed the qualified third party of the name of the alleged perpetrator of the act or acts of domestic violence or sexual assault or stalking, if known to the victim.
(Amended by Ord. 193-86, App. 5/30/86; Ord. 221-92, App. 7/14/92; Ord. 233-93, App. 7/22/93; Proposition I, 11/8/94; Ord. 446-94, App. 12/30/94; Ord. 179-98, App. 5/29/98; Ord. 250-98, App. 7/31/98; Ord. 237-99, File No. 990168, App. 8/30/99; Ord. 347-99, File No. 992197, App. 12/30/99; Ord. 116-00, File No. 991315, App. 6/2/2000; Ord. 2-03, File No. 020716, App, 1/21/2003; Ord. 107-03, File No. 030689, App. 5/23/2003; Ord. 178-06, File No. 052025, App.; Ord. 252-06, File No. 061183, App. 10/11/2006; Ord. 281-06, File No. 061376, App. 11/20/2006; Ord. 92-07, File No. 061217, App. 4/27/2007; Proposition M, 11/4/2008; Ord. 28-09, File No. 080822, App. 2/20/2009; Ord. 60-10, File No. 10039, App. 3/25/2010; Ord. 72-11, File No. 110153, App. 4/27/2011, Eff. 5/27/2011; Ord. 49-14
, File No. 131063, App. 4/17/2014, Eff. 5/17/2014; Ord. 173-14
, File No. 140679, App. 7/31/2014, Eff. 8/30/2014; Ord. 161-15
, File No. 150804, App. 9/18/2015, Eff. 10/18/2015; Ord. 162-15
, File No. 150805, App. 9/18/2015, Eff. 10/18/2015; Ord. 119-16, File No. 160554, App. 7/1/2016, Eff. 7/31/2016; Ord. 162-16, File No. 160657, App. 8/4/2016, Eff. 9/3/2016; Ord. 296-19, File No. 191105, App. 12/20/2019, Eff. 1/20/2020; Ord. 213-20, File No. 200518, App. 10/30/2020, Eff. 11/30/2020; Ord. 208-21, File No. 210699, App. 11/12/2021, Eff. 12/13/2021; Ord. 172-22, File No. 211232, App. 8/4/2022, Eff. 9/4/2022; Ord. 210-22, File No. 210866, App. 10/28/2022, Eff. 11/28/2022; Ord. 91-23, File No. 221021, App. 5/26/2023, Eff. 6/26/2023; Ord. 160-23, File No. 230770, App. 7/28/2023, Eff. 8/28/2023; Ord. 195-23, File No. 230026, App. 9/15/2023, Eff. 10/16/2023; Ord. 62-24, File No. 230310, App. 3/28/2024, Eff. 4/28/2024; Ord. 64-24, File No. 231185, App. 3/28/2024, Eff. 4/28/2024; Ord. 92-24, File No. 240174, App. 5/10/2024, Eff. 6/10/2024, Oper. 7/1/2024)
(1) Annual Rent Increase. On March 1 of each year, the Board shall publish the increase in the CPI for the preceding 12 months, as made available by the U.S. Department of Labor. A landlord who has reported the required information about their rental unit to the Rent Board as set forth in Section 37.15 shall have a license to impose annually a rent increase which does not exceed a tenant’s base rent by more than 60% of said published increase. In no event, however, shall the allowable annual increase be greater than 7%.
(2) Banking. A landlord who refrains from imposing an annual rent increase or any portion thereof may accumulate said increase and, subject to Section 37.15, impose that amount on the tenant’s subsequent rent increase anniversary dates. A landlord who, between April 1, 1982, and February 29, 1984, has banked an annual 7% rent increase (or rent increases) or any portion thereof may impose the accumulated increase on the tenant’s subsequent rent increase anniversary dates.
(3) Capital Improvements, Rehabilitation, and Energy Conservation Improvements, and Renewable Energy Improvements. A landlord may impose rent increases based upon the cost of capital improvements, rehabilitation, energy conservation improvements, or renewable energy improvements, provided that such costs are certified pursuant to Sections 37.7 and 37.8B below; provided further that where a landlord has performed seismic strengthening in accordance with Building Code Chapters 16B and 16C, no increase for capital improvements (including but not limited to seismic strengthening) shall exceed, in any 12 month period, 10 percent of the tenant's base rent, subject to rules adopted by the Board to prevent landlord hardship and to permit landlords to continue to maintain their buildings in a decent, safe and sanitary condition. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to the 10 percent limitation. Nothing in this subsection shall be construed to supersede any Board rules or regulations with respect to limitations on increases based upon capital improvements whether performed separately or in conjunction with seismic strengthening improvements pursuant to Building Code Chapters 16B and 16C.
(4) Utilities. A landlord may impose increases based upon the cost of utilities as provided in Section 37.2(q) above.
(5) Water: Charges Related to Excess Water Use, and 50% Passthrough of Water Bill Charges Attributable to Water Rate Increases Resulting From Issuance of Water System Improvement Revenue Bonds Authorized at the November 2002 Election.
(A) Charges Related to Excess Water Use. A landlord may impose increases not to exceed 50 percent of the excess use charges (penalties) levied by the San Francisco Water Department on a building for use of water in excess of Water Department allocations under the following conditions:
(i) The landlord provides tenants with written certification that the following have been installed in all units: (1) permanently installed retrofit devices designed to reduce the amount of water used per flush or low-flow toilets (1.6 gallons per flush); (2) low-flow showerheads which allow a flow of no more than 2.5 gallons per minute; and (3) faucet aerators (where installation on current faucets is physically feasible); and
(ii) The landlord provides the tenants with written certification that no known plumbing leaks currently exist in the building and that any leaks reported by tenants in the future will be promptly repaired; and
(iii) The landlord provides the tenants with a copy of the water bill for the period in which the penalty was charged. Only penalties billed for a service period which begins after the effective date of the ordinance [April 20, 1991] may be passed through to tenants. Where penalties result from an allocation which does not reflect documented changes in occupancy which occurred after March 1, 1991, a landlord must, if requested in writing by a tenant, make a good-faith effort to appeal the allotment. Increases based upon penalties shall be prorated on a per-room basis provided that the tenancy existed during the time the penalty charges accrued. Such charges shall not become part of a tenant's base rent. Where a penalty in any given billing period reflects a 25 percent or more increase in consumption over the prior billing period, and where that increase does not appear to result from increased occupancy or any other known use, a landlord may not impose any increase based upon such penalty unless inspection by a licensed plumber or Water Department inspector fails to reveal a plumbing or other leak. If the inspection does reveal a leak, no increase based upon penalties may be imposed at any time for the period of the unrepaired leak.
(B) Fifty Percent (50%) Passthrough of Water Bill Charges Attributable to Water Increases Resulting From Issuance of Water System Improvement Revenue Bonds Authorized at the November 2002 Election. A landlord may pass through fifty percent (50%) of the water bill charges attributable to water rate increases resulting from issuance of Water System Improvement Revenue Bonds authorized at the November 2002 election (Proposition A), to any unit that is in compliance with any applicable laws requiring water conservation devices. The landlord is not required to file a petition with the Board for approval of such a cost passthrough. Such cost passthroughs are subject to the following:
(i) Affected tenants shall be given notice of any such passthrough as provided by applicable notice of rent increase provisions of this Chapter 37, including but not limited to Section 37.3(b)(3).
(ii) A tenant may file a hardship application with the Board, and be granted relief from all or part of such a cost passthrough.
(iii) If a tenant's hardship application is granted, the tenant's landlord may utilize any available Public Utilities Commission low-income rate discount program or similar program for water bill reduction, based on that tenant's hardship status.
(iv) A landlord shall not impose a passthrough pursuant to Section 37.3(a)(5)(B) if the landlord has filed for or received Board approval for a rent increase under Section 37.8(e)(4) for increased operating and maintenance expenses in which the same increase in water bill charges attributable to water rate increases resulting from issuance of any water revenue bonds authorized at the November 5, 2002 election was included in the comparison year cost totals.
(v) Where a tenant alleges that a landlord has imposed a water revenue bond passthrough that is not in compliance with Section 37.3(a)(5)(B), the tenant may petition for a hearing under the procedures provided by Section 37.8. In such a hearing the landlord shall have the burden of proving the accuracy of the calculation that is the basis for the increase. Any tenant petition challenging such a passthrough must be filed within one year of the effective date of the passthrough.
(vi) A tenant who has received a notice of passthrough or a passthrough under this Section 37.3(a)(5)(B) shall be entitled to receive a copy of the applicable water bill from the landlord upon request.
(vii) The amount of permissible passthrough per unit under this Section 37.3(a)(5)(B) shall be determined as follows:
(1) The San Francisco Public Utilities Commission will determine the charge per unit of water, if any, that is attributable to water rate increases resulting from issuance of water system improvement revenue bonds authorized at the November 5, 2002 election.
(2) The charge identified in Section 37.3(a)(5)(B)(vii)(1) shall be multiplied by the total units of water used by each customer, for each water bill. The result is the total dollar amount of the water bill that is attributable to water rate increases resulting from issuance of water system improvement revenue bonds authorized at the November 5, 2002 election. That charge shall be a separate line item on each customer's water bill.
(3) The dollar amount calculated under Section 37.3(a)(5)(B)(vii)(2) shall be divided by two (since a 50% passthrough is permitted), and then divided by the total number of units covered by the water bill, including commercial units. The resulting dollar figure shall be divided by the number of months covered by the water bill cycle (most are two-month bill cycles), to determine the amount of that water bill that may be passed through to each residential unit for each month covered by that bill.
(4) These passthroughs may be imposed on a monthly basis. These passthroughs shall not become part of a tenant's base rent. The amount of each passthrough may vary from month to month, depending on the amount calculated under Sections 37.3(a)(5)(B)(vii)(1) through (3).
(viii) The Board may amend its rules and regulations as necessary to implement this Section 37.3(a)(5)(B).
(6) Property Tax.
(A) Effective July 1, 2024, a landlord may impose increases based upon a 100% passthrough of the change in the landlord’s property tax resulting from the repayment of general obligation bonds of the City and County of San Francisco approved by the voters between November 1, 1996, and November 30, 1998; a 50% passthrough of the change in the landlord’s property tax resulting from the repayment of general obligation bonds of the City and County of San Francisco approved by the voters after November 14, 2002; and a 50% passthrough of the change in the landlord’s property tax resulting from the repayment of San Francisco Unified School District or San Francisco Community College District general obligation bonds approved by the voters after November 1, 2006, as provided in Section 37.2(q). General obligation bonds that meet the criteria set forth in the previous sentence are referred to herein as “Eligible Bonds;” provided, however, that a general obligation bond approved after December 20, 2000 may qualify as an Eligible Bond only if the passthrough was disclosed and approved by the voters. The City and County of San Francisco, San Francisco Unified School District, and San Francisco Community College District are referred to collectively as “the Issuing Entities.”
To pass through the change in property tax resulting from the repayment of Eligible Bonds, the landlord shall calculate said change relative to the amount that the property tax rate increased due to the repayment of Eligible Bonds since each tenancy commenced, or 2005, whichever is later (“the Base Year”), as set forth in subsection (a)(6)(B).
(B) The Controller will first determine the percentage of the property tax rate, if any, attributable to general obligation bonds of any of the Issuing Entities (“the General Obligation Bond Factor”) for each tax year. The passthrough rate for an individual tenant (the “Tenant Passthrough Rate”) shall be based on the amount that the General Obligation Bond Factor for the current year has increased since the tenant’s Base Year; and the degree to which said increase, if any, is attributable to Eligible Bonds, as measured by the ratio of debt service for the Eligible Bonds compared to the total debt service attributable to general obligation bonds of the Issuing Entities. The resulting figure shall then be discounted to reflect the specific percentage passthroughs for each of the Eligible Bonds as specified in subsection (A). The Controller shall prepare and annually update a form to help landlords and tenants calculate the Tenant Passthrough Rates. The Controller’s authority to interpret and administer this calculation shall be liberally construed to further the purposes of this subsection (a)(6).
(C) To calculate the amount of increased property tax that the landlord can pass through to a tenant in any given year, the landlord shall divide the total amount of the net taxable value as of November 1 of the applicable tax year by the total number of all units in the property, including commercial units; and shall multiply the resulting figure by the applicable Tenant Passthrough Rate. The result is the dollar amount of increased property taxes for that tax year for a particular property attributable to the repayment of Eligible Bonds that the landlord may pass through to the tenant.
(D) The dollar amount calculated under subsection (a)(6)(C) shall then be divided by the total number of months that the passthrough may apply pursuant to subsection (a)(6)(E)(i), to determine the monthly per unit costs for that tax year of the repayment of general obligation bonds.
(E) Landlords may pass through to each unit in a particular property the dollar amount calculated under subsections (a)(6)(A)–(D), as provided in this subsection (a)(6)(E).
(i) All passthroughs shall apply for the same number of months covered by the property tax bills used in the passthrough calculation, and the calculation may not be based on tax bills issued more than three years prior to the year in which the passthrough was imposed.
(ii) The landlord shall give affected tenants notice of the passthrough as provided by applicable notice of rent increase provisions of this Chapter 37, including but not limited to Section 37.3(b)(3). The passthroughs may be imposed at any time in the calendar year, provided that the landlord serves notice of such passthrough to be effective on the anniversary date of each tenant’s occupancy of the property. The passthroughs shall not become a part of a tenant’s base rent. The amount of each passthrough imposed pursuant to this subsection (a)(6) may vary from year-to-year, depending on the amount calculated by the Controller. A landlord may impose the passthroughs described in this subsection (a)(6) for a particular tax year only with respect to those tenants who were residents of a particular property on November 1 of the applicable tax year. A landlord shall not impose a passthrough pursuant to this subsection (a)(6) if the landlord has filed for or received Board approval for a rent increase under Section 37.8(e)(4) for increased operating and maintenance expenses in which the same increase in property taxes due to the repayment of general obligation bonds was included in the comparison year cost totals.
(F) A tenant who has received a passthrough under this subsection (a)(6) may file a financial hardship application with the Board, and the Board may grant the tenant complete or partial relief from the passthrough. The standards and procedures for the financial hardship application shall be as set forth in Sections 37.7(h)-(i).
(G) The Board will have available a form which explains how to calculate the passthrough. Landlords must provide to tenants, on or before the date that notice is served on the tenant of a passthrough permitted under this subsection (a)(6), a copy of the completed form. Landlords shall provide their tenants the completed forms in addition to the Notice of Rent Increase required under Section 37.3(b). Where a tenant alleges that a landlord has imposed a charge which exceeds the limitations set forth in this subsection (a)(6), the tenant may petition for a hearing under the procedures provided by Section 37.8. In such a hearing, the landlord shall have the burden of proving the accuracy of the calculation that is the basis for the increase. Any tenant petitions challenging such a passthrough must be filed within one year of the effective date of the passthrough.
(H) The Board and the Controller may amend their rules and regulations as necessary to implement this subsection (a)(6).
(7) RAP Loans. A landlord may impose rent increases attributable to the City Administrator's amortization of the RAP loan in an area designated on or after July 1, 1977, pursuant to Chapter 32 of the San Francisco Administrative Code.
(8) Additional Increases. A landlord who seeks to impose any rent increase which exceeds those permitted above shall petition for a rental arbitration hearing pursuant to Section 37.8 of this Chapter.
(9) A landlord may impose a rent increase to recover costs incurred for the remediation of lead hazards, as defined in San Francisco Health Code Article 11 or 26. Such increases may be based on changes in operating and maintenance expenses or for capital improvement expenditures as long as the costs which are the basis of the rent increase are a substantial portion of the work which abates or remediates a lead hazard, as defined in San Francisco Health Code Article 11 or 26, and provided further that such costs are approved for operating and maintenance expense increases pursuant to Section 37.8(e)(4)(A) and certified as capital improvements pursuant to Section 37.7 below.
When rent increases are authorized by this Subsection 37.3(a)(9), the total rent increase for both operating and maintenance expenses and capital improvements shall not exceed 10 percent in any 12 month period. If allowable rent increases due to the costs of lead remediation and abatement work exceed 10 percent in any 12 month period, an Administrative Law Judge shall apply a portion of such excess to approved operating and maintenance expenses for lead remediation work, and the balance, if any, to certified capital improvements, provided, however, that such increase shall not exceed 10 percent. A landlord may accumulate any approved or certified increase which exceeds this amount, subject to the 10 percent limit.
(10) With respect to units occupied by recipients of tenant-based rental assistance:
(A) If the tenant's share of the base rent is not calculated as a fixed percentage of the tenant's income, such as in the Housing Choice Voucher Program and the Over-FMR Tenancy Program, or if the tenant is receiving assistance under the HOPWA rental subsidy program, then:
(ii) If the base rent is less than the payment standard, the rent increase limitations of this Chapter shall not apply; provided, however, that any rent increase which would result in the base rent being equal to or greater than the payment standard shall not result in a new base rent that exceeds the payment standard plus the increase allowable under Section 37.3(a)(1).
(B) If the tenant's share of the base rent is calculated as a fixed percentage of the tenant's income, such as in the Section 8 Certificate Program, the rent increase limitations in Section 37.3(a)(1) and (2) shall not apply. In such circumstances, adjustments in rent shall be made solely according to the requirements of the tenant-based rental assistance program.
(11) Additional Occupants.
(A) Except as provided in Section 37.3(a)(11)(B), a landlord may not impose increases solely because a tenant has added an additional occupant to an existing tenancy, including, but not limited to, a newborn child or family member as defined in Section 401 of the Housing Code. The prohibition on increases mandated by this Subsection (A) shall apply notwithstanding a rental agreement or lease that specifically permits a rent increase for additional occupants.
(C) Rent increases otherwise permitted by the Costa-Hawkins Rental Housing Act, California Civil Code Section 1950 et seq. (as it may be amended from time to time) are not prohibited or limited by this Section 37.3(a)(11).
(b) Notice of Rent Increase for Tenants in Occupancy. On or before the date upon which a landlord gives a tenant legal notice of a rent increase, the landlord shall inform the tenant, in writing, of the following:
(1) Which portion of the rent increase reflects the annual increase, and/or a banked amount, if any;
(2) Which portion of the rent increase reflects costs for increased operating and maintenance expenses, rents for comparable units, and/or capital improvements, rehabilitation, energy conservation measures improvements, or renewable energy improvements certified pursuant to Section 37.7. Any rent increase certified due to increases in operating and maintenance costs shall not exceed seven percent;
(3) Which portion of the rent increase reflects the passthrough of charges for: gas and electricity; or the passthrough of increased water bill charges attributable to water rate increases resulting from issuance of water revenue bonds authorized at the November 2002 election as provided by Section 37.3(a)(5)(B), which charges and calculations of charges shall be explained in writing on a form provided by the Board; or the passthrough of general obligation bond measure costs as provided by Section 37.3(a)(6), which charges shall be explained in writing on a form provided by the Board as described in Section 37.3(a)(6)(E);
(4) Which portion of the rent increase reflects the amortization of the RAP loan, as described in Section 37.3(a)(7) above.
(5) Nonconforming Rent Increases. Any rent increase which does not conform with the provisions of this Section shall be null and void.
(6) With respect to rental units occupied by recipients of tenant-based rental assistance, the notice requirements of this Subsection (b) shall be required in addition to any notice required as part of the tenant-based rental assistance program.
(c) Initial Rent Limitation for Subtenants. A tenant who subleases his or her rental unit may charge no more rent upon initial occupancy of the subtenant or subtenants than that rent which the tenant is currently paying to the landlord.
(d) Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50. et seq.). Consistent with the Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50. et seq.) and regardless of whether otherwise provided under Chapter 37:
(1) Property Owner Rights to Establish Initial and All Subsequent Rental Rates for Separately Alienable Parcels.
(A) An owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit which is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision as specified in subdivision (b), (d), or (f) of Section 11004.5 of the California Business and Professions Code. The owner’s right to establish subsequent rental rates under this subsection (d)(1)(A) shall not apply to a dwelling or unit where either of the following apply:
(i) The unit is a condominium dwelling or unit that has not been sold separately by the subdivider to a bona fide purchaser for value; but subsection (d)(1)(A) shall apply to a single unsold condominium dwelling or unit, if all the other condominium dwellings or units have been sold separately by the subdivider to bona fide purchasers for value, and the subdivider has occupied the remaining unsold condominium dwelling or unit as their principal residence for at least one year after the subdivision occurred.
(ii) The preceding tenancy has been terminated by the owner by notice pursuant to California Civil Code Section 1946 or has been terminated upon a change in the terms of the tenancy noticed pursuant to California Civil Code Section 827; in such instances, the rent increase limitation provisions of Chapter 37 shall continue to apply for the duration of the new tenancy in that dwelling or unit.
(C) An owner's right to establish subsequent rental rates under Subsection 37.3(d)(1) shall not apply to a dwelling or unit which contains serious health, safety, fire or building code violations, excluding those caused by disasters, for which a citation has been issued by the appropriate governmental agency and which has remained unabated for six months or longer preceding the vacancy.
(D) An owner’s right to establish subsequent rental rates under subsection 37.3(d)(1) shall not apply to a dwelling or unit that is a new dwelling unit created pursuant to the Code provisions specified in subsection 37.2(r)(4)(D), or a dwelling unit that utilizes the Code provisions specified in subsection 37.2(r)(4)(D).
(2) Conditions for Establishing the Initial Rental Rate Upon Sublet or Assignment. Except as identified in this Subsection 37.3
(d)(2), nothing in this Subsection or any other provision of law of the City and County of San Francisco shall be construed to preclude express establishment in a lease or rental agreement of the rental rates to be applicable in the event the rental unit subject thereto is sublet, and nothing in this Subsection shall be construed to impair the obligations of contracts entered into prior to January 1, 1996, subject to the following:
(A) Where the original occupant or occupants who took possession of the dwelling or unit pursuant to the rental agreement with the owner no longer permanently reside there, an owner may increase the rent by any amount allowed by this Subsection to a lawful sublessee or assignee who did not reside at the dwelling or unit prior to January 1, 1996. However, such a rent increase shall not be permitted while:
(i) The dwelling or unit has been cited in an inspection report by the appropriate governmental agency as containing serious health, safety, fire, or building code violations, as defined by Section 17920.3 of the California Health and Safety Code, excluding any violation caused by a disaster; and,
(ii) The citation was issued at least 60 days prior to the date of the vacancy: and,
(iii) The cited violation had not been abated when the prior tenant vacated and had remained unabated for 60 days or for a longer period of time. However, the 60-day time period may be extended by the appropriate governmental agency that issued the citation.
(B) This Subsection 37.3(d)(2) shall not apply to partial changes in occupancy of a dwelling or unit where one or more of the occupants of the premises, pursuant to the agreement with the owner provided for above (37.3(d)(2)), remains an occupant in lawful possession of the dwellings or unit, or where a lawful sublessee or assignee who resided at the dwelling or unit prior to January 1, 1996, remains in possession of the dwelling or unit. Nothing contained in this Subsection 37.3(d)(2) shall be construed to enlarge or diminish an owner's right to withhold consent to a sublease or assignment.
(C) Acceptance of rent by the owner shall not operate as a waiver or otherwise prevent enforcement of a covenant prohibiting sublease or assignment or as a waiver of an owner's rights to establish the initial rental rate unless the owner has received written notice from the tenant that is party to the agreement and thereafter accepted rent.
(3) Termination or Nonrenewal of a Contract or Recorded Agreement with a Government Agency Limiting Rent. An owner who terminates or fails to renew a contract or recorded agreement with a governmental agency that provides for a rent limitation to a qualified tenant, shall be subject to the following:
(A) The tenant(s) who were beneficiaries of the contract or recorded agreement shall be given at least 90 days' written notice of the effective date of the termination and shall not be obligated to pay more than the tenant's portion of the rent, as calculated under that contract or recorded agreement, for 90 days following receipt of the notice of termination or nonrenewal.
(B) The owner shall not be eligible to set an initial rent for three years following the date of the termination or nonrenewal of the contract or agreement.
(C) The rental rate for any new tenancy established during the three-year period in that vacated dwelling or unit shall be at the same rate as the rent under the terminated or nonrenewed contract or recorded agreement, plus any increases authorized under this Chapter 37 after the date of termination/non renewal.
(D) The provisions of Subsections 37.3(d)(3)(B) and (C) shall not apply to any new tenancy of 12 months or more duration established after January 1, 2000, pursuant to the owner's contract or recorded agreement with a governmental agency that provides for a rent limitation to a qualified tenant unless the prior vacancy in that dwelling or unit was pursuant to a nonrenewed or canceled contract or recorded agreement with a governmental agency that provides for a rent limitation to a qualified tenant.
(4) Subsection 37.3(d) does not affect the authority of the City and County of San Francisco to regulate or monitor the basis or grounds for eviction.
(5) This Subsection 37.3(d) is intended to be and shall be construed to be consistent with the Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50 et seq.).
(e) Effect of Deferred Maintenance on Passthroughs for Lead Remediation Techniques.
(1) When lead hazards are remediated or abated pursuant to San Francisco Health Code Articles 11 or 26, are violations of State or local housing health and safety laws, there shall be a rebuttable presumption that the lead hazards are caused or created by deferred maintenance as defined herein of the current or previous landlord. If the landlord fails to rebut the presumption, the costs of such work shall not be passed through to tenants as either a capital improvement or an operating and maintenance expense. If the landlord rebuts the presumption, he or she shall be entitled to a rent increase if otherwise justified by the standards set forth in this Chapter.
(2) For purposes of the evaluation of petitions for rent increases for lead remediation work, maintenance is deferred if a reasonable landlord under the circumstances would have performed, on a regular basis, the maintenance work required to keep the premises from being in violation of housing safety and habitability standards set forth in California Civil Code Section 1941 and the San Francisco Municipal Code. In order to prevail on a deferred maintenance defense, a tenant must show that the level of repair or remediation currently required would have been lessened had maintenance been performed in a more timely manner.
(f) Costa-Hawkins Vacancy Control. Where a landlord has terminated the previous tenancy as stated in either subsection (1), (2) or (3) below, for the next five years from the termination, the initial base rent for the subsequent tenancy shall be a rent not greater than the lawful rent in effect at the time the previous tenancy was terminated, plus any annual rent increases available under this Chapter 37. This Section 37.3(f) is intended to be consistent with California Civil Code Section 1954.53(a)(1)(A)-(B).
(1) Where the previous tenancy was terminated by a notice of termination of tenancy issued under California Civil Code Section 1946.1 stating the ground for recovery of possession under Sections 37.9(a)(8), (9), (10), (11), or (14) of this Code. For purposes of the termination of tenancy under Section 37.9(a)(9), the initial rent for the unit may be set by a subsequent bona fide purchaser for value of the condominium.
(2) Where the previous tenancy was terminated upon a change in terms of tenancy noticed under California Civil Code Section 827, except a change in rent permitted by law. Within 10 days after serving the notice of termination based upon a change in terms of tenancy under Civil Code Section 827, the landlord shall notify the Board in writing of the monthly rent the tenant was paying when the landlord gave the notice to the tenant, and provide a copy of the notice to the Board to the tenant.
(3) Where the landlord terminated or did not renew a contract or recorded agreement with a governmental agency that provided for a rent limitation to a qualified tenant. When a landlord terminates a tenant-based rental assistance program, the landlord shall, within 10 days after giving the notice of termination of the program to the tenant, notify the Board in writing of the monthly rent the tenant was paying and the monthly rent paid by the program to the landlord on behalf of the tenant when the landlord gave notice to the tenant, and provide a copy of the notice to the Board to the tenant.
(g) New Construction and Substantial Rehabilitation.
(1) An owner of a residential dwelling or unit which is newly constructed and first received a certificate of occupancy after the effective date of Ordinance No. 276-79 (June 13, 1979), or which the Rent Board has certified has undergone a substantial rehabilitation, may establish the initial and all subsequent rental rates for that dwelling or unit, except where any of the following apply:
(B) Where the dwelling or unit is a replacement unit under Section 37.9A(b).
(C) As provided for certain categories of units under Section 37.2(r)(4)(D).
(D) As provided in a development agreement entered into by the City under Administrative Code Chapter 56.
(E) The Board of Supervisors acknowledges that at least through November 5, 2024, California Civil Code Sections 1954.52(a)(1)-(2) preclude the City from updating the June 13, 1979 new construction date specified in this subsection (g)(1). In the event State law is amended or repealed in this regard, said new construction date shall immediately cease to apply, and shall by operation of law pursuant to this subsection (g)(1)(E) be updated to reflect the latest date that State law may allow, up to and including June 13, 1994. The applicability of an updated new construction date under this subsection (g)(1)(E) shall not affect whether a unit is exempt under some other legal basis set forth in this Chapter 37. If no other exemption applies and a unit becomes covered by Chapter 37’s rent increase limitations by operation of this subsection (g)(1)(E), the initial base rent shall be the lawful rent that applied as of the date of coverage. If no rent was in effect as of the date of coverage, then the initial base rent shall be the first lawful rent in effect after that date.
(Added by Ord. 20-84, App. 1/19/84; amended by Ord. 338-87, App. 8/14/87; Ord. 102-91, App. 3/21/91; Ord. 127-91, App. 4/2/91; Ord. 221-92, App. 7/14/92; Proposition H, 11/3/92; Ord. 405-96, App. 10/21/96; Ord. 179-98, App. 5/29/98; Ord. 250-98, App. 7/31/98; Ord. 347-99, File No. 992197, App. 12/30/99; Ord. 116-00, File No. 991315, App. 6/2/2000; Proposition H, 12/2/2000; Ord. 2-03, File No. 020716, App, 1/21/2003; Ord. 107-03, File No. 030689, App. 5/23/2003; Ord. 99-04, File No. 031992, App. 6/4/2004; Ord. 252-06, File No. 061183, App. 10/11/2006; Ord. 171-15
, File No. 150646, Eff. 11/8/2015; Ord. 17-16
, File No. 151229, App. 2/18/2016, Eff. 3/19/2016; Ord. 119-16, File No. 160554, App. 7/1/2016, Eff. 7/31/2016; Ord. 250-19, File No. 190843, App. 11/6/2019, Eff. 12/7/2019; Ord. 296-19, File No. 191105, App. 12/20/2019, Eff. 1/20/2020; Ord. 265-20, File No. 201262, App. 12/18/2020, Eff. 1/18/2021, Oper. 7/1/2022; Ord. 172-22, File No. 211232, App. 8/4/2022, Eff. 9/4/2022; Ord. 210-22, File No. 210866, App. 10/28/2022, Eff. 11/28/2022; Ord. 91-23, File No. 221021, App. 5/26/2023, Eff. 6/26/2023; Ord. 195-23, File No. 230026, App. 9/15/2023, Eff. 10/16/2023; Ord. 64-24, File No. 231185, App. 3/28/2024, Eff. 4/28/2024; Ord. 92-24, File No. 240174, App. 5/10/2024, Eff. 6/10/2024, Oper. 7/1/2024; Ord. 248-24, File No. 240880, App. 10/24/2024, Eff. 11/24/2024)
(a) There is hereby established a board to be known as the San Francisco Residential Rent Stabilization and Arbitration Board (hereinafter called "Board"), consisting of five members. Regular members, each of whom shall have a specific alternate having the same qualifications as the regular member, shall serve at the pleasure of the Mayor. All regular members and alternate members shall be appointed by the Mayor.
(b) The Board shall consist of two landlords, two tenants, and one person who is neither a landlord nor a tenant and who owns no residential rental property; and an alternate for each specific member. All members shall be residents of the City and County of San Francisco. If one of the two regular landlord members is unavailable to vote, that regular member's specific alternate shall be seated and vote, and if that regular member's specific alternate is also unavailable to vote, the other landlord alternate shall (if available) be seated and vote as a substitute alternate. If one of the two regular tenant members is unavailable to vote, that regular member's specific alternate shall be seated and vote, and if that regular member's specific alternate is also unavailable to vote, the other tenant alternate shall (if available) be seated and vote as a substitute alternate.
(c) In accordance with applicable State law, all members shall disclose all present holdings and interests in real property, including interests in corporations, trusts or other entities with real property holdings.
(d) All members shall be appointed by the Mayor to serve 48-month terms. All vacancies occurring during a term shall be filled for the unexpired term.
(e) The Board shall elect a Chairman and Vice-Chairman from among its regular members.
(f) The position of Executive Director shall be established pursuant to and subject to Charter Sections 3.500 and 8.200. The person occupying the position of Executive Director shall be appointed by the Chairman of the Board with the approval of a majority of the members. All staff personnel shall be under the immediate direction and supervision of the Executive Director.
(g) Pursuant to the budgetary and fiscal pro-visions of the Charter, the Board of Supervisors shall provide funds to pay for staff personnel, services and facilities as may be reasonably necessary to enable the Board to exercise its powers and perform its duties under this Chapter. A special fund to be known as the Residential Rent Stabilization and Arbitration Fund shall be established under the supervision and direction of the Board for the receipt of fees under this Chapter, such fees to be appropriated by the Board of Supervisors for the operation of the Board.
(h) Subject to the budgetary and fiscal limitations of the Charter, each member shall be paid $75 per Commission meeting attended if the meeting lasts for six hours or more in a single 24-hour period. The Commission shall adopt rules to allow for payment of an equitable portion of this per diem if a meeting lasts less than six hours. The total per diem shall not exceed $750 per month. In addition, each member may receive reimbursement for actual expenses incurred in the course and scope of the member's duties.
(Amended by Ord. 435-86, App. 11/10/86; Ord. 162-93, App. 5/28/93; Ord. 222-03, File No. 031213, App. 9/5/2003)
(a) Time and Place of Meetings. The Board shall meet as often as necessary to stay current with the workload but in no event less than once a month. The time and place of meetings shall be determined by rules adopted by the Board. The first meeting shall be held within 15 days of the appointment of the first Board. The matter of establishing standards for the selection of Administrative Law Judges shall be considered at the first meeting.
(b) Quorum. A quorum for the transaction of official business shall consist of a majority of the total Board members. No action may be taken by the Board at any meeting attended by less than the quorum. A decision by the Board shall require a majority of all of the members of the Board.
(c) Special Meetings. The Board may hold special meetings in accordance with Charter Section 3.500.
(d) Meetings Open and Public. All meetings of the Board shall be open and public in accordance with the Charter and applicable State law.
(Added by Ord. 276-79, App. 6/12/79; amended by Ord. 347-99, File No. 992197, App. 12/30/99)
In addition to other powers and duties set forth in this Chapter 37, and in addition to powers under the Charter and under other City Codes, including powers and duties under Administrative Code Chapter 49 ("Interest Rates on Security Deposits"), the Board shall have the power to:
(a) Promulgate policies, rules, and regulations to effectuate the purposes of this Chapter 37, and of Administrative Code Chapters 37B and 41D;
(b) Hire such staff, including Administrative Law Judges, as may be reasonably necessary to perform its functions, and promulgate standards for all such staff, subject to the Civil Service provisions of the Charter;
(c) Conduct rental arbitration hearings and residential hotel visitor policy hearings, and administer oaths and affirmations in connection with such hearings, with respect to rental units covered by this Chapter 37 as well as Midtown Park Apartments units as set forth in Administrative Code Chapter 37B;
(d) Publish, on March 1st of each year, the increase in the CPI for the preceding 12 months, as made available by the U.S. Department of Labor;
(e) Make studies and surveys and conduct such hearings as necessary to perform its functions;
(f) Report biannually to the Mayor and the Board of Supervisors on its activities and on progress made towards the achievement of the purposes of the Chapter;
(g) Make available to the public, on request, policies, rules and regulations, reports and surveys in accordance with applicable State law;
(h) Issue rules and regulations for the conduct of its own affairs;
(i) Be empowered to request and, if granted, to receive funds appropriated by the Board of Supervisors through the Mayor;
(j) Maintain, on at least a monthly basis, statistics on the number of notices to vacate filed with the Board pursuant to Section 37.9(c) and statistics on the causes given in such notices or in any additional written documents as provided in Section 37.9(c). Statistics shall include available data on evictions involving school-age (kindergarten through grade twelve) children, including data on whether the evictions occurred during the school term. Said statistics shall be published in a report on March 1st every year, and copies of the report shall be submitted to the Mayor and Board of Supervisors;
(k) On a monthly basis starting January 1, 2018, compile copies at random of 10% of all statements of occupancy filed with the Rent Board pursuant to Section 37.9(a)(8)(vii), and compile a list of all units for which the required statement of occupancy was not filed with the Rent Board. Said copies and said list shall be transmitted to the District Attorney on a monthly basis for investigation. In cases where the District Attorney determines that Section 37.9(a)(8) has been violated, the District Attorney shall take whatever action he or she deems appropriate under this Chapter 37 or under State law.
(l) Periodically review the Uniform Visitor Policy for Residential Hotels and determine amendments as appropriate; and hear and determine hotel operator petitions for Supplemental Visitor Policies, consistent with Administrative Code Chapter 41D (Residential Hotel Visitor Policies).
(m) Hear and decide petitions from residential hotel occupants (whether or not an occupant qualifies as a "tenant" under this Chapter 37) who allege violation of Administrative Code Chapter 41D, including alleged violations of the Uniform Visitor Policy or any approved Supplemental Visitor Policy. Current or former hotel occupants may file such petitions. These petitions may require a determination whether, and to what extent, a residential hotel's policies are in compliance with Administrative Code Chapter 41D, including compliance with the Uniform Visitor Policy.
(n) As provided by Administrative Code Chapter 39, utilize Administrative Law Judges to review relocation claims from Current Households related to a Public Housing Development Project, and make advisory recommendations thereon to the San Francisco Housing Authority for its final determination.
(o) As provided by Administrative Code Chapter 47, utilize Administrative Law Judges to hear and decide petitions from persons who dispute the Mayor's Office of Housing and Community Development's determination that such person does not qualify as a "Displaced Tenant" or a "Neighborhood Resident" (each as defined in Administrative Code Chapter 47).
(Amended by Ord. 7-87, App. 1/15/87; Ord. 347-99, File No. 992197, App. 12/30/99; Ord. 62-02, File No. 020343, App. 5/3/2002; Ord. 107-02, File No. 020296, App. 7/5/2002; Ord. 251-06, File No. 061077, App. 10/11/2006; Ord. 227-12
, File No. 120812, App. 11/7/2012, Eff. 12/7/2012; Ord. 277-13
, File No. 130968, App. 12/18/2013, Eff. 1/17/2014; Ord. 204-15
, File No. 150622, App. 12/3/2015, Eff. 1/2/2016; Ord. 160-17, File No. 170349, App. 7/27/2017, Eff. 8/26/2017; Ord. 213-20, File No. 200518, App. 10/30/2020, Eff. 11/30/2020)
(a) Authority. In accordance with such guidelines as the Board shall establish, the Board and designated Administrative Law Judges shall have the authority to conduct hearings in order to certify rental increases to the extent necessary to amortize the cost of capital improvements, rehabilitations, energy conservation improvements, and renewable energy improvements. Costs determined to be attributable to such work and improvements shall be amortized over a period which is fair and reasonable for the type and the extent of the work and improvements, and which will provide an incentive to landlords to maintain, improve and renovate their properties while at the same time protecting tenants from excessive rent increases. Costs attributable to routine repair and maintenance, or any costs attributable to legalizing an existing dwelling unit under Section 207.3 of the Planning Code, shall not be certified.
(b) Requirements for Certification. The Board and designated Administrative Law Judges may only certify the costs of capital improvements, rehabilitation, energy conservation improvements, and renewable energy improvements, where the following criteria are met:
(1) The landlord completed capital improvements or rehabilitation on or after April 15, 1979, or the landlord completed installation of energy conservation measures on or after July 24, 1982, and has filed a proof of compliance with the Bureau of Building Inspection in accordance with the requirements of Section 1207(d) of the Housing Code;
(2) The landlord has not yet increased the rent or rents to reflect the cost of said work;
(3) The landlord has not been compensated for the work by insurance proceeds;
(4) The building is not subject to a RAP loan in a RAP area designated prior to July 1, 1977;
(5) The landlord files the certification petition no later than five years after the work has been completed;
(6) The cost is not for work required to correct a code violation for which a notice of violation has been issued and remained unabated for 90 days unless the landlord made timely good faith efforts within that 90-day period to commence and complete the work but was not successful in doing so because of the nature of the work or circumstances beyond the control of the landlord. The landlord’s failure to abate within the original 90-day period raises a rebuttable presumption that the landlord did not exercise timely good faith efforts. Any costs attributable to the landlord’s compliance with a Fire Life Safety Notice and Order issued by the Building Official under Sections 107A.16.1 et seq. of the Building Code or the fire code official under Sections et seq. of the Fire Code shall not be certified.
(c) Amortization and Cost Allocation. The Board shall establish amortization periods and cost allocation formulas, in accordance with this Section 37.7. Costs shall be allocated to each unit according to the benefit of the work and improvements attributable to such unit.
(1) Application Filed Before [May 1, 2002 or 60 Days Prior to Passage of This Ordinance on Second Reading, Whichever is Later]. The following provisions shall apply to all applications filed before [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later].
(A) Amortization Periods. Costs shall be amortized on a straight-line basis over a seven or ten-year period, depending upon which category described below most closely relates to the type of work or improvement and its estimated useful life.
(i) Schedule I – Seven-Year Amortization. The following shall be amortized over a seven-year period: Appliances, such as new stoves, disposals, washers, dryers and dishwashers; fixtures, such as garage door openers, locks, light fixtures, water heaters and blankets, shower heads, time clocks and hot water pumps; and other improvements, such as carpeting, linoleum, and exterior and interior painting of common areas. If the appliance is a replacement for which the tenant has already had the benefit, the cost will not be amortized as a capital improvement, but will be considered part of operating and maintenance expenses. Appliances may be amortized as capital improvements when: (1) part of a remodeled kitchen; (2) based upon an agreement between the tenant and landlord; and/or (3) it is a new service or appliance the tenant did not previously have.
(ii) Schedule II – Ten-Year Amortization. The following shall be amortized over a ten-year period: New foundation, new floor structure, new ceiling or walls-new sheetrock, new plumbing (new fixtures, or piping), weather stripping, ceiling insulation, seals and caulking, new furnaces and heaters, refrigerators, new electrical wiring, new stairs, new roof structure, new roof cover, new window, fire escapes, central smoke detection system, new wood or tile floor cover, new sprinkler system, boiler replacement, air conditioning-central system, exterior siding or stucco, elevator rebuild, elevator cables, additions such as patios or decks, central security system, new doors, new mail boxes, new kitchen or bathroom cabinets, and sinks.
(B) Allowable Increase. One hundred percent (100%) of the certified costs of capital improvements, rehabilitation, and energy conservation improvements may be passed through to the tenants who benefit from such work and improvements. However no increase under this Subsection 37.7(c)(1) shall exceed, in a twelve-month period, ten percent (10%) of the tenant's base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to this 10% or $30.00 limitation.
(2) Applications Filed On or After [May 1, 2002 or 60 Days Prior to Passage of This Ordinance on Second Reading, Whichever is Later], For Qualified Energy Conservation Improvements and Renewable Energy Improvements. For Applications filed on or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], the following provisions shall apply to certification of costs for qualified energy conservation improvements and renewable energy improvements.
(B) For purposes of this Subsection 37.7(c)(2), qualified energy conservation improvements and renewable energy improvements are:
(i) 100% of new EPA Energy-Star-compliant refrigerators where the refrigerator replaced is more than five years old and where the unit has separate metering, which costs shall be amortized on straight-line basis over a ten-year period; and,
(ii) Other improvements as may be approved by the Board of Supervisors upon recommendation of the Rent Board following hearings and recommendations by the Commission on the Environment in an Energy Conservation Improvements and Renewable Energy Improvements List (List), as follows:
(I) The Commission on the Environment shall hold hearings to develop a list of recommended energy conservation improvements and renewable energy improvements that demonstrably benefit tenants in units that have separate electrical and/or natural gas metering. Such recommendations shall include consideration of cost effectiveness for tenants, appropriate amortization schedules, and permissible passthrough amounts that will encourage landlords to make such improvements.
(II) The Commission shall also consider whether the certification for each such improvement should include the entire improvement, or only that portion of the improvement cost directly attributable to energy conservation or renewable energy.
(III) The List shall take into consideration the variety and conditions of housing in the City.
(IV) The Commission on the Environment shall adopt the List at a public meeting, and shall transmit the List to the Rent Board no later than [six months after the effective date of this Ordinance].
(V) The Commission on the Environment shall periodically review and amend the List as warranted by changes in technology or conditions in the electricity and natural gas markets. Any amended List shall be transmitted forthwith to the Rent Board.
(VI) The Rent Board shall consider any such List received from the Commission on the Environment, and recommend appropriate Subsection 37.7(c)(2) amendments to the Board of Supervisors.
(3) Applications Filed On or After [May 1, 2002 or 60 Days Prior to Passage of This Ordinance on Second Reading, Whichever is Later], For Seismic Work and Improvements Required by Law, and for Work and Improvements Required by Laws Enacted After [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later].
For applications filed on or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later]:
(A) This Subsection 37.7(c)(3) shall apply to certification of costs for seismic work and improvements required by law.
(B) This Subsection 37.7(c)(3) shall apply to certification of costs for capital improvement, rehabilitation, energy conservation, and renewable energy work and improvements required by federal, state, or local laws enacted on or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later].
(C) Amortization Periods. Costs shall be amortized on a straight-line basis over a twenty-year period.
(D) Allowable Increase. One hundred percent (100%) of the certified costs of capital improvement, rehabilitation, energy conservation, and renewable energy work and improvements required by law may be passed through to the tenants who benefit from such work and improvements. Any rent increases under this Section 37.7(c)(3) shall not exceed, in a twelve-month period, a total of ten percent (10%) of the tenant's base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to this 10% or $30.00 limitation.
(4) Applications Filed On or After [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], for Other Work and Improvements On Properties With Five Residential Units or Less. For applications filed on or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], the following provisions shall apply to certification of all work and improvements for properties containing five residential units or less, with the exception of work and improvements costs certified for passthrough under Subsections 37.7(c)(2) or (3):
(A) Amortization Periods. Costs shall be amortized on a straight-line basis over a ten, fifteen or twenty-year period, depending upon which category described below most closely relates to the type of work or improvement and its estimated useful life.
(i) Schedule I – Ten-Year Amortization. The following shall be amortized over a ten-year period: New roof structure, new roof cover, electrical heaters, central security system, telephone entry systems, new wood frame windows, new mailboxes, weather-stripping, ceiling insulation, seals and caulking, central smoke detection system, new doors and skylights; appliances, such as new stoves, disposals, refrigerators, washers, dryers and dishwashers; fixtures, such as garage door openers, locks, light fixtures, water heaters and blankets, shower heads, time clocks and hot water pumps; and other improvements, such as carpeting, linoleum, and exterior and interior painting of common areas. If the appliance is a replacement for which the tenant has already had the benefit, the cost will not be amortized as a capital improvement but will be considered part of operating and maintenance expenses. Appliances may be amortized as capital improvements when: (1) part of a remodeled kitchen; (2) based upon an agreement between the tenant and landlord; and/or (3) it is a new service or appliance the tenant did not previously have,
(ii) Schedule II – Fifteen-Year Amortization. The following shall be amortized over a fifteen-year period: New floor structure, new ceiling or walls-new sheetrock, wood decks, new stairs, new furnaces and gas heaters, new thermal pane windows, new wood or tile floor cover, new sprinkler systems, air conditioning-central system, exterior siding or stucco, elevator rebuild, elevator cables, new kitchen or bathroom cabinets, and sinks.
(iii) Schedule III – Twenty-Year Amortization. The following shall be amortized over a twenty-year period: New foundation, new plumbing (new fixtures or piping), boiler replacement, new electrical wiring, fire escapes, concrete patios, iron gates, sidewalk replacement and chimneys.
(B) Allowable Increase. One hundred percent (100%) of the certified costs of capital improvement, rehabilitation, and energy conservation work and improvements may be passed through to the tenants who benefit from such work and improvements. However, no increase under this Subsection 37.7(c)(4) shall exceed, in a twelve-month period, five percent (5%) the tenant's base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years subject to this 5% or $30.00 limitation.
(5) For Applications Filed On or After [May 1, 2002 or 60 Days Prior to Passage of This Ordinance on Second Reading, Whichever is Later], for Other Work and Improvements for Properties with Six or more Residential Units. For applications filed on or after [May 1, 2002 or 60 days prior to passage of this Ordinance on Second Reading, whichever is later], the following provisions shall apply to certification of all work and improvements for properties containing six residential units or more, with the exception of work and improvements certified under Subsections 37.7(c)(2) or (3):
(A) Amortization Periods. Costs shall be amortized on a straight-line basis over a seven or ten-year period, depending upon which category described below most closely relates to the type of work or improvement and its estimated useful life.
(i) Schedule I – Seven-Year Amortization. The following shall be amortized over a seven-year period: Appliances, such as new stoves, disposals, washers, dryers and dishwashers; fixtures, such as garage door openers, locks, light fixtures, water heaters and blankets, shower heads, time clocks and hot water pumps; and other improvements, such as carpeting, linoleum, and exterior and interior painting of common areas. If the appliance is a replacement for which the tenant has already had the benefit, the cost will not be amortized as a capital improvement, but will be considered part of operating and maintenance expenses. Appliances may be amortized as capital improvements when: (1) part of a remodeled kitchen; (2) based upon an agreement between the tenant and landlord; and/or (3) it is a new service or appliance the tenant did not previously have.
(ii) Schedule II – Ten-Year Amortization. The following shall be amortized over a ten year period: New foundation, new floor structure, new ceiling or walls sheetrock, new plumbing (new fixtures or piping), weather stripping, ceiling insulation, seals and caulking, new furnaces and heaters, refrigerators, new electrical wiring, new stairs, new roof structure, new roof cover; new window, fire escapes, central smoke detection system, new wood or tile floor cover, new sprinkler system, boiler replacement, air conditioning system, exterior siding or stucco, elevator rebuild, elevator cables, additions such as patios or decks, central security system, new doors, new mail boxes, new kitchen or bathroom cabinets, sinks, telephone entry system, skylights, iron gates, sidewalk replacement and chimneys.
(B) Allowable Increase.
(i) Only fifty percent (50%) of the costs certified under this Subsection 37.7(c)(5) may be passed through to the tenants who benefit from such work and improvements. However, no increase under this Subsection 37.7(c)(5) shall exceed, in a twelve-month period, ten percent (10%) of the tenant's base rent at the time the petition was filed or $30.00, whichever is greater. A landlord may accumulate any certified increase which exceeds this amount and impose the increase in subsequent years, subject to this 10% or $30.00 limitation.
(ii) In the alternative a tenant may elect to have one hundred percent (100%) of the costs certified under this Subsection 37.7(c)(5) passed through to the tenant. In that event no increase under this Subsection shall exceed, in a twelve-month period, five percent (5%) of the tenant's base rent at the time the application was filed, and over the life of the tenancy the total increase shall never exceed fifteen percent (15%) of the tenant's base rent at the time the application was filed. A tenant must elect this alternative by filing such an election with the Board on a form prescribed by the Board. An election may be filed at any time after the application is filed but no later than fifteen (15) calendar days after the Administrative Law Judge's decision on the application is mailed to the tenant. In a unit with multiple tenants, the election form must be signed by a majority (more than 50% ) in order for the election to be accepted. If a timely election is made after a decision has been issued, an addendum to the decision will be issued reflecting the tenant's election.
(6) Development of On-Line Programs. The Board, in conjunction with the Department of Telecommunications and Information Services, shall design and implement on-line programs by September 1, 2003 to allow landlords and tenants to perform calculations concerning allowable increases for capital improvement, rehabilitation, energy conservation, and renewable energy work, and to compare average costs for work certified in prior decisions.
(d) Estimator. The Board or its Executive Director may hire an estimator where an expert appraisal is required.
(e) Filing Fee. The Board shall establish a filing fee based upon the cost of the capital improvement, rehabilitation, energy conservation improvement, or renewable energy improvement being reviewed. Such fees will pay for the costs of an estimator. These fees shall be deposited in the Residential Rent Stabilization and Arbitration Fund pursuant to Section 10.117-88 of this Code.
(f) Application Procedures.
(1) Pre-Application Notice for Large Projects for Parcels or Buildings Containing Six or More Residential Units. If at any time prior to filing an application the landlord determines that the total cost of a project for a parcel or a building containing six or more residential units is reasonably expected to exceed $25,000 multiplied by the number of units on the parcel or in the building, the landlord shall immediately inform each tenant and the Rent Board in writing of the anticipated costs of the work. The landlord's notice must occur within 30 days after such determination by the landlord.
(2) Filing. Landlords who seek to pass through the costs of capital improvements, rehabilitation, energy conservation improvements, or renewable energy improvements, must file an application on a form prescribed by the Board. The application shall be accompanied by such supporting material as the Board shall prescribe. All applications must be submitted with the filing fee established by the Board.
For each petition totaling more than $25,000, in addition to the supporting material prescribed by the Board for all petitions, the applicant must either:
(A) Provide copies of competitive bids received for work and materials; or,
(B) Provide copies of time and materials billing for work performed by all contractors and subcontractors; or
(C) The applicant must pay the cost of an estimator hired by the Board.
(3) Filing Date. Applications must be filed prior to the mailing or delivery of legal notice of a rent increase to the tenants of units for which the landlord seeks certification and in no event more than five years after the work has been completed.
(4) Effect of Filing Application. Upon the filing of the application, the requested increase will be inoperative until such time as the Administrative Law Judge makes findings of fact at the conclusion of the certification hearing.
(5) Notice to Parties. The Board shall calendar the application for hearing before a designated Administrative Law Judge and shall give written notice of the date to the parties at least 10 days prior to the hearing.
(g) Certification Hearings.
(1) Time of Hearing. The hearing shall be held within 45 days of the filing of the application.
(2) Consolidation. To the greatest extent possible, certification hearings with respect to a given building shall be consolidated. Where a landlord and/or tenant has filed a petition for hearing based upon the grounds and under the procedure set forth in Section 37.8, the Board may, in its discretion, consolidate certification hearings with hearings on Section 37.8 petitions.
(3) Conduct of Hearing. The hearing shall be conducted by an Administrative Law Judge designated by the Board. Both parties may offer such documents, testimony, written declarations or other evidence as may be pertinent to the proceedings. Burden of proof is on the landlord. A record of the proceedings must be maintained for purposes of appeal.
(4) Determination of the Administrative Law Judge. In accordance with the Board's amortization schedules and cost allocation formulas, the Administrative Law Judge shall make findings as to whether or not the proposed rent increases are justified based upon the following considerations:
(A) The application and its supporting documentation.
(B) Evidence presented at the hearing establishing both the extent and the cost of the work performed.
(C) Estimator's report, where such report has been prepared.
(D) Any other such relevant factors as the Board shall specify in rules and regulations.
(5) Findings of Fact. The Administrative Law Judge shall make written findings of fact, copies of which shall be mailed within 30 days of the hearing.
(6) Payment or Refund of Rents to Implement Certification Decision. If the Administrative Law Judge finds that all or any portion of the heretofore inoperative rent increase is justified, the tenant shall be ordered to pay the landlord that amount. If the tenant has paid an amount to the landlord which the Administrative Law Judge finds unjustified, the Administrative Law Judge shall order the landlord to reimburse the tenant said amount.
(7) Finality of Administrative Law Judge's Decision. The decision of the Administrative Law Judge shall be final unless the Board vacates his or her decision on appeal.
(8) Appeals. Either party may file an appeal of the Administrative Law Judge's decision with the Board. Such appeals are governed by Section 37.8(f) below.
(h) Tenant Financial Hardship Applications.
(1) A tenant may file a hardship application at any time on grounds of financial hardship with respect to any rent increase based on certified costs of capital improvements, rehabilitation work, energy conservation improvements, or renewable energy improvements. Payment of such rent increases(s) set forth in the hardship application shall be stayed from the date of filing until a decision is made on the Tenant Financial Hardship Application.
(2) Hardship applications shall be available in multiple languages.
(3) Multilingual notice of hardship application procedures shall be mailed with each Administrative Law Judge or Board decision.
(4) Within six months after February 21, 2003 the Rent Board shall implement a process for direct outreach to landlords and tenants whose primary language is not English, regarding availability and use of the hardship application procedure. Within three months of implementation the Board shall provide a report to the Board of Supervisors regarding this outreach program, describing the implementation process and any known results.
(i) Tenant Financial Hardship Application Standards and Process.
(1) Standards for Establishing Financial Hardship. A tenant will qualify under Subsection 37.7(h) for relief from payment of a certified capital improvement passthrough, if the tenant demonstrates that one of the following financial hardship situations applies:
(A) Tenant is a recipient of means-tested public assistance, such as Social Security Supplemental Security Income (SSI), General Assistance (GA), Temporary Assistance for Needy Families (TANF), or California Work Opportunity and Responsibility to Kids (CalWORKS); or,
(B) Gross household income is less than 80% of the current Unadjusted Area Median Income (AMI) as published by the U.S. Department of Housing and Urban Development (HUD) for the "Metro Fair Market Rent Area" that includes San Francisco; and rent charged is greater than 33% of gross household income; and assets, excluding non-liquid assets and retirement accounts, do not exceed asset amounts permitted by the Mayor's Office of Housing when determining eligibility for below market rate (BMR) home ownership; or,
(C) Exceptional circumstances exist, such as excessive medical bills.
(2) Procedures for Filing. A Tenant Financial Hardship Application must be filed:
(A) By each occupant in the unit who is 18 years of age or older, except not by any subtenant who pays rent to the master tenant (the gross income of the master tenant must include the amount of the subtenant's rent payment);
(B) Under penalty of perjury, stating that the tenant qualifies under one of the standards in Subsection 37.7(i)(1)(A), (B), or (C);
(C) With documentation demonstrating the tenant's qualifications; and
(D) With an acknowledgment that the Rent Board will provide a copy of the Tenant Financial Hardship Application to the landlord.
(3) Stay of Payment. Payment of a certified capital improvement passthrough that is the subject of a Subsection 37.7(i)(1) Tenant Financial Hardship Application shall be stayed from the date of filing until a decision is made on the Tenant Financial Hardship Application.
(4) Hearing Options, Decision.
(A) A decision on the Application will be issued administratively by a Rent Board Administrative Law Judge unless a hearing is requested by the landlord within fifteen days of the date the completed Tenant Financial Hardship Application is mailed to the landlord by the Rent Board, or unless a Rent Board Administrative Law Judge otherwise determines, that a hearing is needed.
(B) Landlord Request for Hearing, Procedures.
(i) A landlord's request for a hearing on the Application shall specify the claim(s) in the Application that the landlord disputes, and attach any relevant documentation.
(ii) A Rent Board Administrative Law Judge will review any landlord request for hearing, to determine whether a hearing is necessary to resolve disputed facts.
(iii) If the landlord's request for a hearing is granted, it will be the landlord's burden to demonstrate that the tenant's financial hardship eligibility under Subsection 37.7(i)(1) criteria, as stated in the Application, has not been established.
(iv) If it is determined that a hearing as requested by the landlord is not needed to determine the facts, a decision on the Application will be issued administratively by a Rent Board Administrative Law Judge.
(5) Term of Relief. Relief from payment of a certified capital improvement passthrough may be for an indefinite period or for a limited period of time, all subject to the landlord's request to reopen the case if the landlord has information that the tenant is no longer eligible.
(6) Change in Tenant Eligibility Status. If a tenant is granted relief from payment of a certified capital improvement passthrough under Subsection 37.7(i)(1), and subsequently the tenant is no longer eligible for such relief:
(A) The tenant shall notify the Rent Board of this changed eligibility status in writing within 60 days, with a copy to the landlord.
(B) Whether or not the tenant notifies the Rent Board and landlord as provided in Subsection 37.7(i)(6)(A), the landlord may notify the Rent Board if the landlord has information that the tenant is no longer eligible, with a copy to the tenant.
(C) Upon receipt of notice under Subsection 37.7(i)(6)(A) or (B), a Rent Board Administrative Law Judge shall decide whether to grant or deny the previously granted relief. That decision may be made administratively by a Rent Board Administrative Law Judge without a hearing unless the Administrative Law Judge determines that a hearing is needed, or unless the landlord requests a hearing. Any such hearing shall be promptly scheduled.
(7) Any decision granting or denying the Tenant Financial Hardship Application, or any subsequent decision on a previously granted Tenant Financial Hardship Application, may be appealed to the Rent Board. The Rent Board's final decision will be subject to judicial review by writ of administrative mandamus in the San Francisco Superior Court.
(j) Notice to Tenants Regarding Tenant Financial Hardship Applications. The Rent Board shall provide written notice of the tenant financial hardship application procedures to each affected unit, with a copy of the landlord's petition for certification of capital improvement costs.
(Amended by Ord. 438-83, App. 9/2/83; Ord. 278-89, App. 8/2/89; Ord. 162-93, App. 5/28/93; Ord. 347-99, File No. 992197, App. 12/30/99; Ord. 2-03, File No. 020716, App, 1/21/2003; Ord. 203-13
, File No. 130706, App. 10/3/2013, Eff. 11/2/2013; Ord. 43-14
, File No. 131148, App. 4/17/2014, Eff. 5/17/2014; Ord. 267-18, File No. 180756, App. 11/9/2018, Eff. 12/10/2018)
(a) Authority of Board and Administrative Law Judge. In accordance with such guidelines as the Board shall establish, the Board and designated Administrative Law Judges shall have the authority to arbitrate rental increase adjustments, and to administer the rent increase protest procedures with respect to RAP rental units as set forth in Chapter 32 of the San Francisco Administrative Code.
(b) Request for Arbitration.
(1) Landlords. Landlords who seek to impose rent increases which exceed the limitations set forth in Section 37.3(a) above must request an arbitration hearing as set forth in this Section. The burden of proof is on the landlord. This Section 37.8(b)(1) applies, but is not limited, to Operating and Maintenance Expense petitions to increase base rent.
(A) Where a landlord Operating and Maintenance Expense petition to increase base rent is granted, based upon a petition pending or filed on or after October 28, 2003 for a property with six or more residential units, the same landlord shall not impose more than a total seven percent (7%) base rent increase on any unit in any five (5) year period due to increases in operating and maintenance costs.
(2) Tenants.
(A) Notwithstanding Section 37.3, tenants of non-RAP rental units and tenants of RAP rental units in areas designated on or after July 1, 1977, may request arbitration hearings where a landlord has substantially decreased services without a corresponding reduction in rent and/or has failed to perform ordinary repair and maintenance under State or local law and/or has failed to provide the tenant with a clear explanation of the current charges for gas and electricity or bond measure costs passed through to the tenant and/or imposed a nonconforming rent increase which is null and void. The burden of proof is on the tenant.
(B) Tenants of RAP rental units in areas designated prior to July 1, 1977, may petition for a hearing where the landlord has noticed an increase which exceeds the limitations set forth in Section 32.73 of the San Francisco Administrative Code. After a vacancy has occurred in a RAP rental unit in said areas, a new tenant of said unit may petition for a hearing where the landlord has demanded and/or received a rent for that unit which exceeds the rent increase limitations set forth in Section 32.73 of the San Francisco Administrative Code. The burden of proof is on the landlord.
(c) Procedure for Landlord Petitioners.
(1) Filing. The request for arbitration must be filed on a petition form prescribed by the Board and shall be accompanied by such supporting material as the Board shall prescribe, including but not limited to, justification for the proposed rental increase.
(2) Filing Date. The petition must be filed prior to the mailing or delivering to the tenant or tenants legal notice of the rental increase exceeding the limitations as defined in Section 37.3.
(3) Effect of Timely Filing of Petition. Provided a completed petition is timely filed, that portion of the requested rental increase which exceeds the limitations set forth in Section 37.3 and has not been certified as a justifiable increase in accordance with Section 37.7 is inoperative until such time as the Administrative Law Judge makes findings of fact at the conclusion of the arbitration hearing.
(4) Notice to Parties. The Board shall calendar the petition for hearing before a designated Administrative Law Judge and shall give written notice of the date to the parties at least 10 days prior to the hearing.
(d) Procedure for Tenant Petitioners.
(1) Filing; Limitation. The request for arbitration must be filed on a petition form prescribed by the Board and must be accompanied by such supporting material as the Board shall prescribe, including but not limited to, a copy of the landlord's notice of rent increase. If the tenant petitioner has received certification findings regarding his rental unit in accordance with Section 37.7, such findings must accompany the petition. If the tenant petitioner has received a notification from the Chief Administrative Officer with respect to base rent and amortization of a RAP loan, such notification must accompany the petition. A tenant petition regarding a gas and electricity passthrough must be filed within one year of the effective date of the passthrough or within one year of the date the passthrough was required to be recalculated pursuant to rules and regulations promulgated by the Board. A tenant petition regarding a water revenue bond passthrough under Section 37.3(a)(5)(B) must be filed within one year of the effective date of the passthrough. A tenant petition regarding a general obligation bond cost passthrough under Section 37.3(a)(6) must be filed within one year of the effective date of the passthrough.
(2) Notice to Parties. The Board shall calendar the petition for hearing before a designated Administrative Law Judge and shall give written notice of the date to the parties at least 10 days prior to the hearing. Responses to a petition for hearing may be submitted in writing.
(e) Hearings.
(1) Time of Hearing. The hearing shall be held within 45 days of the filing of the petition. The level of housing services provided to tenants' rental units shall not be decreased during the period between the filing of the petition and the conclusion of the hearing.
(2) Consolidation. To the greatest extent possible, hearings with respect to a given building shall be consolidated.
(3) Conduct of Hearing. The hearing shall be conducted by an Administrative Law Judge designated by the Board. Both parties may offer such documents, testimony, written declarations or other evidence as may be pertinent to the proceedings. A record of the proceedings must be maintained for purposes of appeal.
(4) Determination of the Administrative Law Judge: Rental Units. Based upon the evidence presented at the hearing and upon such relevant factors as the Board shall determine, the Administrative Law Judge shall make findings as to whether the landlord’s proposed rental increase exceeding the limitations set forth in Section 37.3 is justified or whether the landlord has effected a rent increase through a reduction in services or has failed to perform ordinary repair and maintenance as required by State or local law; and provided further that, where a landlord has imposed a passthrough pursuant to this Chapter 37, the same costs shall not be included in the calculation of increased operating and maintenance expenses pursuant to this subsection (4). In making such findings, the Administrative Law Judge shall take into consideration the following factors:
(A) Increases or decreases in operating and maintenance expenses, including, but not limited to, water and sewer service charges; janitorial service; refuse removal; elevator service; security system; insurance for the property; debt service and real estate taxes as set forth in subsections (i) and (ii); reasonable and necessary management expenses as set forth in subsection (iii); and routine repairs and maintenance as set forth in subsection (iv).
(i) For petitions filed before December 11, 2017, the Rent Board may consider increased debt service and increased real estate taxes; provided, however, that if the property has been purchased within two years of the date of the previous purchase, consideration shall not be given to that portion of increased debt service which has resulted from a selling price which exceeds the seller’s purchase price by more than the percentage increase in the “Consumer Price Index for All Urban Consumers for the San Francisco-Oakland Metropolitan Area, U.S. Department of Labor” between the date of previous purchase and the date of the current sale, plus the cost of capital improvements or rehabilitation work made or performed by the seller.
(ii) For petitions filed on or after December 11, 2017, the Rent Board shall not consider any portion of increased debt service, or that portion of increased real estate taxes that has resulted from an increased assessment due to a change in ownership; provided, however, that the Rent Board may consider that portion of increased real estate taxes that has resulted from the completion of needed repairs or capital improvements with respect to any petition filed on or after December 11, 2017; and provided, further, that the Rent Board may consider increased debt service and increased real estate taxes in a petition filed on or after December 11, 2017 pursuant to Section 37.8(e)(4)(A)(i), if the landlord demonstrates that it had purchased the property on or before April 3, 2018 and that it had reasonably relied on its ability to pass through those costs at the time of the purchase.
(iii) For petitions filed on or after the effective date of the ordinance in Board of Supervisors File No. 180318, the Rent Board may consider management expenses only to the extent those expenses are reasonable and necessary, based on factors such as the need to provide day-to-day management of the building; the level of management services previously required for the building; the reasonable cost of the services in an arms-length transaction; whether any tenants have objected that the cost and quality of the services are not in keeping with the socioeconomic status of the building’s existing tenants; and other extraordinary circumstances.
(iv) The term routine repairs and maintenance shall not include any costs for installation or upgrade of a fire sprinkler system or fire alarm and/or detection system attributable to the landlord’s compliance with a Fire Life Safety Notice and Order issued by the Building Official under Sections .16.1 et seq. of the Building Code or the fire code official under Sections et seq. of the Fire Code.
(B) The past history of increases in the rent for the unit and the comparison of the rent for the unit with rents for comparable units in the same general area.
(C) Any findings which have been made pursuant to Section 37.7 with respect to the unit.
(D) Failure to perform ordinary repair, replacement, and maintenance in compliance with applicable State and local law.
(E) Any other such relevant factors as the Board shall specify in rules and regulations.
(5) Determination of the Administrative Law Judge: RAP Rental Units.
(A) RAP Rental Units in RAP Areas Designated Prior to July 1, 1977. The Administrative Law Judge shall make findings as to whether or not the noticed or proposed rental increase exceeds the rent increase limitations set forth in Section 32.73 of the San Francisco Administrative Code. In making such findings, the Administrative Law Judge shall apply the rent increase limitations set forth in Chapter 32 of the San Francisco Administrative Code and all rules and regulations promulgated pursuant thereto. The Administrative Law Judge shall consider the evidence presented at the hearing. The burden of proof shall be on the landlord.
(B) RAP Rental Units in RAP Areas Designated On or After July 1, 1977. The Administrative Law Judge shall make findings with respect to rent increases exceeding the limitations as set forth in Section 37.3 of this Chapter. In making such findings, the Administrative Law Judge shall take into consideration the factors set forth in Subsection (4) above and shall consider evidence presented at the hearing. The burden of proof is on the landlord.
(6) Findings of Fact. The Administrative Law Judge shall make written findings of fact, copies of which shall be mailed to the parties within 30 days of the hearing.
(7) Payment or Refund of Rents to Implement Arbitration Decision. Upon finding that all or any portion of the rent increase is or is not justified, or that any nonconforming rent increase is null and void, the Administrative Law Judge may order payment or refund of all or a portion of that cumulative amount within 15 days of the mailing of the findings of fact or may order the amount added to or offset against future rents; provided, however, that any such order shall be stayed if an appeal is timely filed by the aggrieved party. The Administrative Law Judge may order refunds of rent overpayments resulting from rent increases which are null and void for no more than the three-year period preceding the month of the filing of a landlord or tenant petition, plus the period between the month of filing and the date of the Administrative Law Judge's decision. In any case, calculation of rent overpayments and re-setting of the lawful base rent shall be based on a determination of the validity of all rent increases imposed since April 1, 1982, in accordance with Sections 37.3(b)(5) and 37.3(a)(2) above.
(8) Finality of Administrative Law Judge's Decision. The decision of the Administrative Law Judge shall be final unless the Board vacates his decision on appeal.
(f) Appeals.
(1) Time and Manner. Any appeal to the Board from the determination of the Administrative Law Judge must be made within 15 calendar days of the mailing of the findings of fact unless such time limit is extended by the Board upon a showing of good cause. If the fifteenth day falls on a Saturday, Sunday or legal holiday, the appeal may be filed with the Board on the next business day. The appeal shall be in writing and must state why appellant believes there was either error or abuse of discretion on the part of the Administrative Law Judge. The filing of an appeal will stay only that portion of any Administrative Law Judge's decision which permits payment, refund, offsetting or adding rent.
(2) Record on Appeal. Upon receipt of an appeal, the entire administrative record of the matter, including the appeal, shall be filed with the Board.
(3) Appeals. The Board shall, in its discretion, hear appeals. In deciding whether or not to hear a given appeal, the Board shall consider, among other factors, fairness to the parties, hardship to either party, and promoting the policies and purposes of this Chapter, in addition to any written comments submitted by the Administrative Law Judge whose decision is being challenged. The Board may also review other material from the administrative record of the matter as it deems necessary. A vote of three members shall be required in order for an appeal to be heard.
(4) Remand to Administrative Law Judge Without Appeal Hearing. In those cases where the Board is able to determine on the basis of the documents before it that the Administrative Law Judge has erred, the Board may remand the case for further hearing in accordance with its instructions without conducting an appeal hearing. Both parties shall be notified as to the time of the re-hearing, which shall be conducted within 30 days of remanding by the Board. In those cases where the Board is able to determine on the basis of the documents before it that the Administrative Law Judge's findings contain numerical or clerical inaccuracies, or require clarification, the Board may continue the hearing for purposes of re-referring the case to said Administrative Law Judge in order to correct the findings.
(5) Time of Appeal Hearing; Notice to Parties. Appeals accepted by the Board shall be heard within 45 days of the filing of an appeal. Within 30 days of the filing of an appeal, both parties shall be notified in writing as to whether or not the appeal has been accepted. If the appeal has been accepted, the notice shall state the time of the hearing and the nature of the hearing. Such notice must be mailed at least 10 days prior to the hearing.
(6) Appeal Hearing; Decision of the Board. At the appeal hearing, both appellant and respondent shall have an opportunity to present oral testimony and written documents in support of their positions. After such hearing and after any further investigation which the Board may deem necessary the Board may, upon hearing the appeal, affirm, reverse or modify the Administrative Law Judge's decision or may remand the case for further hearing in accordance with its findings. The Board's decision must be rendered within 45 days of the hearing and the parties must be notified of such decision.
(7) Notification of the Parties. In accordance with item (6) above, parties shall receive written notice of the decision. The notice shall state that this decision is final.
(8) Effective Date of Appeal Decisions. Appeal decisions are effective on the date mailed to the parties; provided, however, that that portion of any decision which orders payment, refund, offsetting or adding rent shall become effective 30 calendar days after it is mailed to the parties unless a stay of execution is granted by a court of competent jurisdiction.
(9) Limitation of Actions. A landlord or tenant aggrieved by any decision of the Board must seek judicial review within 90 calendar days of the date of mailing of the decision.
(Amended by Ord. 435-86, App. 11/10/86; Ord. 278-89, App. 8/2/89; Ord. 127-91, App. 4/2/91; Ord. 132-92, App. 5/21/92; Ord. 179-92, App. 6/22/92; Ord. 162-93, App. 5/28/93; Ord. 363-93, App. 11/18/93; Ord. 179-98, App. 5/29/98; Ord. 347-99, File No. 992197, App. 12/30/99; Ord. 107-03, File No. 030689, App. 5/23/2003; Ord. 5-04, File No. 031792, App. 1/16/2004; Ord. 132-18, File No. 180318, App. 6/14/2018, Eff. 7/15/2018; Ord. 267-18, File No. 180756, App. 11/9/2018, Eff. 12/10/2018)
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