Rent Control! Living in San Francisco, we all know at least one person who has an amazing apartment in San Francisco and is paying less than half what everyone else is. And what to what housing gods to they send thanks to for that? RENT CONTROL!
Rent control is a very hot topic when it comes to finding a place to stay in San Francisco, and other places in the Bay Area, however I found that few people really understand it. So I decided to do a little digging and find what I could on the topic. Important disclaimer though, this information is specific to San Francisco City only, and city ordinances on rent control can vary, so please check with your local city before taking action. Also, I’m not a lawyer, and if you feel like your landlord is violating any of these policies, please consult with an attorney, the San Francisco Tenants Union, or the San Francisco Rent Board for help.
First it’s important to understand what rent control really is. Rent control means landlords cannot raise rents for their buildings beyond a set amount that is tied to directly to inflation. The rate varies each. For the time period March 1, 2013 – February 28, 2014 it was 1.9%. This year (March 1, 2014 – February 28, 2015) it is set at 1%.
There are four basic guidelines on when rent control doesn’t apply:
The San Francisco Rent board has a comprehensive list of exempt property types, which you can find here, though the San Francisco Tenant’s Union highlights some cases where the law can be interpreted in favor of the tenant.
There are certain reasons why a landlord can increase rent beyond the set amount by the rent board. These reasons include any capitol improvements made to the building. “Capitol improvements” include a new roof, new windows, exterior paint jobs, new appliances, etc. In buildings with 5 or fewer units, the landlord can raise the rent up to 5% per year, until 100% of the cost is recaptured. In buildings with more than five units there are options, depending on a variety of factors.
In both cases, the landlord must do all the work ahead of time, and then submit request for a hearing to raise the rents. If the work was never done, tenants can appear at the hearings to contest the rent increase. Also, once the capital improvement rent increase is not permanent, and once the cost of the improvements has been recaptured, the rents must return to what they would be normally, (their standard base plus any normal rent increases).
Another reason a landlord can increase the rent beyond the rent set by rent control is higher costs in operating and maintenance. This would be caused by an increase in costs for a property management company, gardener, and general care and maintenance for the property. However, before the costs can be passed onto tenants the rate of increase must exceed the allowable increase set by the rent board. And rents cannot be increased by more than 7% for operation and maintenance reasons. Once again, these increases do not add to the overall base rent for your unit, and adjustments must happen after the landlord has incurred the additional cost.
Also there is a practice called banking rent. This is where a landlord can go back to the original date on your lease and apply each allowable rent increase per year to bring your current rent up to what it would be if they had raised your rent consistently each year. This is perfectly allowable as rent increases are not on a use it or lose it policy. You can find out what the yearly increase allowed by rent control has been by visiting the San Francisco Rent Board. They have a downloadable PDF on their home page.
Tl;dr – Rent control is awesome! And there are caveats to the protection offered by rent control. Stay informed!
I hope that this helps clear up and confusion related to rent control. If you have any questions, please reach out to us at firstname.lastname@example.org.