Purpose and Findings. | |
Definitions. | |
Temporary Eviction Protections. | |
Shutdowns Due to Health Orders. | |
Severability. | |
Sunset Provision. |
(a) The City and County of San Francisco is facing an unprecedented public health and economic crisis due to the COVID-19 pandemic. The Mayor declared a state of emergency on February 25, 2020, and on March 16, 2020, the Governor issued Executive Order N-28-20 (E.O. N-28-20), which found that the COVID-19 pandemic is having severe impacts throughout the State, and which recognized that local jurisdictions must take measures based on their particular needs to prevent displacements and to protect public health and mitigate the economic effects of the pandemic. Paragraph 2 of E.O. N-28-20 initially allowed local governments to enact measures to protect commercial tenants impacted by COVID-19 from being evicted due to non-payment through May 31, 2020. Through a series of follow-up orders (Executive Orders N-66-20, N-71-20, N-80-20, N-03-21, and most recently Executive Order 08-21 1
), the Governor has ordered that the protections of paragraph 2 of E.O. N-28-20 will remain in effect through September 30, 2021, unless the Governor orders otherwise.
(b) On March 19, 2020, the Mayor issued a Fourth Supplement to the February 25 emergency proclamation (and the Mayor later issued an Eighth Supplement to clarify the intent of the Fourth Supplement), and a Twenty-Eighth Supplement to extend its terms, to protect certain commercial businesses in the City from eviction, based on the severe financial impacts of the pandemic and the public health risks that may result from such impacts. These measures have protected many tenants from being evicted, but would allow some evictions to resume as soon as December 1, 2020.
(c) The Board of Supervisors hereby finds that the findings in the orders and directives referenced in subsections (a) and (b) remain valid and compelling, requiring the further extension of commercial eviction controls for certain commercial tenants who could not pay rent that came due under the Executive Orders. An extension is necessary to prevent businesses from displacement, mitigate broader economic harms, and address the public health risks that may otherwise result.
(d) Mindful that restricting evictions for non-payment may burden landlords, the Board of Supervisors has endeavored to prioritize tenants and landlords most in need of protection. It is reasonable to prioritize tenants based on the number of employees, as a tenant with more employees will, generally speaking, be likely to have greater ability to pay rent and a greater ability to absorb financial losses as compared to a business with fewer employees. It is also reasonable to exclude for-profit tenants occupying office space; the City cannot afford to lose commercial tenants, but as more office employers transition to remote work, and given the resilience of the industries that have typically occupied office space in the City, this exclusion is appropriate. Likewise, it is reasonable to grant a hardship exception to smaller landlords, as larger landlords are relatively more likely to be able to withstand any financial impact that the pandemic and these eviction restrictions may impose on them.
(e) The protections of this Chapter 37C shall only apply to rent payments that came due between March 16, 2020 and September 30, 2021, inclusive (or if the Governor extends the effective period of paragraph 2 of E.O. N-28-20 past September 30, 2021, through the date of extension).
CODIFICATION NOTE
“Covered Commercial Tenant” means a tenant or subtenant registered to do business in San Francisco under Article 12 of the Business and Tax Regulations Code with combined worldwide gross receipts for tax year 2019 for purposes of Article 12-A-1 of the Business and Tax Regulations Code equal to or below $25 million, which amount shall be prorated in the case of businesses that were not open for the entire 2019 tax year. However, “Covered Commercial Tenant” shall not include a tenant or subtenant that occupies property that is zoned or approved for use as Office Use (as defined in Section 102 of the Planning Code), unless such tenant or subtenant has established and maintains valid nonprofit status under Section 501(c)(3) of the United States Internal Revenue Code. “Covered Commercial Tenant” also shall not include a tenant or subtenant leasing property from the City and County of San Francisco.
“Financial Impact Related To COVID-19” means a substantial decrease in a Covered Commercial Tenant’s business income or substantial increase in its business expenses that arose due to illness or other disruption, reduced open hours, or reduced consumer demand, related to COVID-19. An example (without limitation) of financial impact would be if the tenant’s profit and loss statement showed that net income decreased by 25% or more in a given month as compared to the same month in 2019. A financial impact is related to COVID-19 if it was caused by the COVID-19 pandemic, or by any local, state, or federal government response to the COVID-19 pandemic, and is documented.
“Forbearance Period” means the time period by which a Covered Commercial Tenant that was unable to pay rent due to a Financial Impact Related to COVID-19 must pay the rent, as set forth in Section 37C.3(a)(1)-(5).
“Moratorium Period” means the period from March 16, 2020 until the expiration of paragraph 2 of E.O. N-28-20, as extended by Executive Orders N-66-20, N-71-20, N-80-20, N-03-21, and N-08-21, and as may be further extended by the Governor.
“Tier 1 Commercial Tenant” means a Covered Commercial Tenant that employs fewer than 10 full-time equivalent (“FTE”) employees as of November 1, 2020.
“Tier 2 Commercial Tenant” means a Covered Commercial Tenant that employs between 10 and 24 FTE employees, inclusive, as of November 1, 2020.
“Tier 3 Commercial Tenant” means a Covered Commercial Tenant that employs between 25 and 49 FTE employees, inclusive, as of November 1, 2020.
“Tier 4 Commercial Tenant” means a Covered Commercial Tenant that employs between 50 and 99 FTE employees, inclusive, as of November 1, 2020.
“Tier 5 Commercial Tenant” means a Covered Commercial Tenant that employs 100 or more FTE employees as of November 1, 2020.
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