Legislation Could Prohibit Evictions, Freeze Rents For Vacant UnitsJuly 30, 2015
In addition to prohibiting rent increases or evictions based on adding new roommates to an existing tenancy, even when an existing lease specifically disallows new occupants or specifies an associated increase in rent, a proposed change to San Francisco’s Administrative Code would also prohibit landlords from raising the rent for an apartment after certain vacancies and protect tenants in illegal units as well.
Under the proposed amendment working its way though the Board of Supervisors Land Use Committee, tenants would be required to make written requests to officially add a new occupant to an apartment and landlords could formally petition the Rent Board for a rent increase based on increased costs associated with the addition, but landlords would otherwise not be allowed to unreasonably refuse the request or increase the rent.
According to the amendment, a reasonable basis for refusing the request “includes, but is not limited to, the total number of occupants in the unit exceeding the lesser of: (1) two persons in a studio unit, three persons in a one-bedroom unit, four persons in a two-bedroom unit, six persons in a three-bedroom unit, or eight persons in a four bedroom-unit, or (2) the maximum number of persons allowed in the unit under state or local law.”
A landlord’s failure to respond to a written request within 14 days would be considered an approval.
And while landlords are already prohibited from raising the rent for an apartment following an Owner Move-In or Ellis Act eviction, the proposed legislation would disallow increasing the base rent for a vacant apartment when the vacancy follows a change in the terms to a month-to-month lease or if the landlord had terminated an agreement with a governmental agency that provided for a rent limitation to a qualified tenant (i.e., Section 8 housing).
Landlords would also be required to allow tenants to cure a violation of a subletting clause, or other minor violations, prior to initiating eviction proceedings. And tenants in illegal units would be protected from being evicted on the grounds that the unit is not authorized for residential occupancy by the City.
The intent of the proposed amendment is to reduce evictions which are based on technicalities in order to circumvent rent or eviction controls.
Comments from Plugged-In Readers
100% guaranteed that this will be challenged (and very likely the key provisions of it overturned) in superior court.
“the proposed legislation would disallow increasing the rent for a vacant apartment when the vacancy followed a change in terms to a month-to-month lease”
Far too vague. What is this in response to?
Vacancy rent control was actually rejected by San Francisco voters in the late 80’s and was subsequently prohibited by state law.
I used to rent a middle 2br flat in a 3-unit building with 1 roommate that had a formal living room that could be converted to a 3br, (no closet but was private due to pocket doors). My landlords only rented it to 2 people at below market rent specifically because they didn’t want a ton of people living above/below them. The lease was very specific that no new roommates could be added without explicit approval from the landlords which was perfectly reasonable. Sounds like this legislation means they would not be able to refuse the addition of 2-4 additional roommates, depending on whether it’s considered a 2br or 3br. Essentially, this legislation will incentivize my former landlords to sell the middle flat, removing it from the rental market completely.
This is absolutely stupid. This is akin to vacancy control. You are forced to add a tenant and then the original lessee leaves and you’re stuck with the added tenant.
I can relate to the desire for this sort of law, because as a tenant, I once moved my girlfriend into my studio apartment to live with me there, but I avoided informing the landlord for fear of being evicted.
The other thing about vacant units seems less reasonable, and I can foresee some problems with allowing tenants to legally occupy space that is not legally allowed for occupancy.
I can also imagine how allowing the chance to cure unauthorized subletting could potentially be abused … a lot.
Oh good grief… A change in terms to a month-to-month lease? That’s incredibly vague. I’ve posted this before, but on the two blocks where I live, 20+ units have been removed from the market over the last, say, 12 years. Some were legally merged. Others were just pulled from the market and sit vacant. One neighbor told me a few weeks ago she’d rather burn her house down than rent out her vacant unit. Another I spoke with just laughs and says, “Of course you can’t rent it out!” I’m waiting for activists to propose legislation that forces landlords to rent out vacant units… You know that’s coming.
“…tenants in illegal units would be protected from being evicted on the grounds that occupancy of the unit is not authorized for residential occupancy by the City.”
So if I’m living somewhere the city has deemed uninhabitable (illegal), they want to make sure I can keep living in that space? What?
From a legal perspective, how would this even be implemented? Would said illegal unit have to have an illegal kitchen? Is it simply any enclosed space that I chose to sleep in overnight? Could I start living in my cubicle and gain tenant protections?
Further – how about making certain “modifications” to your apartment, such that they no longer meet code? “Hey, City, this apartment isn’t legal (anymore)”! I can stop paying rent now, right?
One anecdote pops to mind. Years and years ago, I rented out a unit and the tenant at some point moved in his girlfriend without telling me. I had no problem with this really, except she brought her cat. At first the cat was “just visiting.” I allowed for pets in the lease even though the initial tenant didn’t have one, so I thought it was a non-issue, but the cat, unbeknownst to me, did not like to use the litter box… I wont bore with details, but cat urine and feces and hard-wood floors are NOT a good combination… This type of scenario is one that could necessitate a change in a month-to-month lease.
It won’t pass. Its only Kim, Avalos, Campos and Mar in a typical state of overreach.
Some sups will not be happy until the strip property owners of all rights.
Unless I absolutely need the money, why would I ever rent out my apartments with all this BS? That is the cause for sky-high rents. As JR would say, that’s the reality so tough luck. Exactly why it is tough luck for all the chumps that move here. People like me, with nice properties, give the big middle finger to all the tenant activists and BOS. I don’t need to pickup pennies in front of a steamroller. If you support this, you are obviously a tenant so you get everything that will come your way as a result.
Incidentally, where does anyone with a brain think Ellis fits into this? There is little downside for Ellis if this passes.
AirBnB is LOVING this proposed legislation. Playing right into their hands.
Landlord: “This is official notice to stop your subleasing activities.”
Tenant: “Already stopped. The sublease ended this morning at 10:30. There will be another different sublease tonight though. You can officially notify me to stop that one tomorrow.”
Yup, Ellis them all. Forget ‘housing crisis’ – we have an ownership rights crisis.
Many owners who have units paid off will have no interest in either giving them away to tenants.
Owners who don’t have their units paid off will just not rent on the regular market.
Looks like the 32,000 vacant units in the City is just about to get higher.
What the super left supes don’t understand (and I’m on the left) is that all this activist coddling is going to turn the tide. In a few short years San Francisco will be stripped of it’s liberalism and be replaced by a younger and meaner Rudy Giuliani. Stop legislating us to death.
Sure, rent control is a good thing but what is being suggested here will absolutely have a negative overall effect. I’ve been a responsible home owner and investment property owner as well. I’ve played by the rules for 40 years but the deck is becoming so stacked against me. It seems my only option is to sell and avoid the politics.
Who is going to buy from you at the highest price? Do you deserve the highest price? The highest price will likely come from someone who will Ellis… still, someone will again cry foul when the Ellis hammer comes down on the tenants.
Yep! I tend to be liberal in most of my voting habits as well, but I will NEVER vote for the supervisors pandering to the tenant activists and I will actively work against them when they eventually attempt to seek higher office. Hopefully others remember their prior actions when they try to paint themselves as more moderate to appeal to a larger voting pool.
Why don’t we try…. LESS regulations? Hmm? Maybe ease up some of these restrictions that no other city seems to have (yet they all have cheaper median rents- yes, including Manhattan). I don’t think we can regulate our way out of this.
I couldn’t think of a faster way to Ellis out the Mission and flip them all to TIC’s. Careful what you wish for.
Oh, please please please!
At this point, the most reasonable course of action for any owner with below-market rents is to Ellis the building and re-sell the vacant units as TIC’s (which will fetch huge prices in this market) – and then 1031 exchange into rental property in a non-rent-controlled jurisdiction.
Or if they want to avoid the headache of the Ellis, sell to someone who will take on that headache – which will also fetch a good selling price right now.
Their immediate cash flow will increase, and their stress will decrease once they start managing rental property under sane laws, rather than the insane labyrinth we have in SF.
At this point JR will likely chime in and say that selling to someone who will Ellis is conspiracy to circumvent the rent control ordinance and just mentioning it on the internet is a violation of anti-trust.
Would your suggestion work for me when I own a two flat building? I live in one flat and rent the other. I bought before Prop. I and my current tenant has been in place for twenty years. I receive about 25% of current market rate for rent, but my property valuation is also very low. I really don’t want to leave the City. Thoughts?
First thought? Vacate your unit, rent it at market. Sell building to a buyer who will do an OMI on the other unit. I’m not an attorney and this ain’t legal advice.
No. Better to sell a duplex with one unit vacant to 2 partner buyers. One new owner moves in to vacant unit and the second owner does owner move in to rented unit. Wait one year and get no waiting list condo conversion for 2 instant condos.
There ya go folks….just turn over the keys to your property. Oh I mean its not “your” property…just turn over the keys, period.
It’s been a hoot reading this legislation. Looks like it’s written by a 7th grader for debate class.
Yes – Kim tried to squeeze about 100 new laws against owners, all in one swoop.
We’re just removed another 4 listings form the market, but that’s what the Supervisors want ‘a perceived housing shortage’. THERE IS NO HOUSING SHORTAGE – just owners who don’t want to rent.
This will end up in court if it ever gets out of the Land Use Committee.
Tell Wiener & Cohen not to pass or re-write it this.
Jane Kim does not even have the legal occupancy # correct, she forgot about the plus one on two bedrooms and up which if a landlord did would be considered discrimination. There is no end to [her] failures. Jane please leave your office, hang head in shame and admit failure.
“A landlord’s failure to respond to a written request within 14 days would be considered an approval.”
WHAT??? That’s insane.
I almost hope this passes just to sit back with my popcorn and watch as much of the city’s rental stock gets Ellised out and sold. I truly think this might well be the proverbial “straw that broke the camel’s back” that would be the impetus for many owners to get out of the insane business of trying to be a landlord in San Francisco. When are Jane Kim and her ilk going to realize that their continued efforts to transfer property rights from owners to tenants has reached a point where every additional attempt merely harms renters by causing the removal of additional housing units from the rental stock (as well as displacement of their residents?)
The only real solution to the whole mess – and i’m not betting it will ever happen – would be to scrap rent control and replace it with a needs-tested voucher program — sort of a local version of Section 8. Those who need help would get it. Those who don’t, wouldn’t (somebody tell me the justification for why someone earning a healthy six-figure income should be entitled to live in an apartment that their landlord is required to subsidize for the rest of the tenant’s life and possibly beyond?) Bad landlords would become essentially extinct over time, because a tenant who was dissatisfied with their building or landlord could take their subsidy and go rent someplace different. In a world where everything is market rate, the quality of rental housing rises and tenants have greater choice.
There would be zero incentive for landlords to evict anyone who was paying their rent and not being a nuisance to others. The only ones who would lose are the landlord and tenants’ attorneys, whose business would significantly diminish. And perhaps some of those often-wealthy attorneys who are living in way-cheap rent controlled apartments.
Gee, can you even imagine a system better designed to create acrimony and legal challenges than our current system? Often seems as if it was designed just for that purpose by the lawyers.
^Hysteria without a basis in reality.
This amendment would prevent far more evictions than it would ever cause. It would make it harder for speculators and unscrupulous landlords trying to selectively remove long-term tenants and re-rent at higher rates. Ellis Act isn’t an option for these players as it precludes operating as an ongoing rental.
For most landlords that want to remain landlords, this amendment wouldn’t change a thing. For landlords who really don’t want to be landlords, they’re probably going to Ellis Act anyway.
This post is so removed from reality it sums up the problem in just 2 paragraphs.
You are calling the landlords you do not like “speculators” or “unscrupulous”. I guess the only landlord you like is the landlord that gives you cheap rent forever. This is typical of what rent controlled tenants have become: self-centered entitled brats who have been isolated from reality.
Landlords are people with families, bills, constraints, desires. Treating them like sub-human beings who arr solely there to provide you with cheap housing against their own interest is what has led to this crisis.
As a landlord, these rules that keep rolling from the Gang Of Four are what are pushing me NOT to rent on the regular market. Airbnb corporate is the way for me.
I’m sure you’re struggling.
It’s one thing to be ahead today, but it is key to still be ahead in 5, 10 or 20 years. Ask anyone renting out in 1985. They were collecting great rent! Fast forward to 2015: $700 for 3BRs with rent control.
By the way, the implication of your post is that someone who owns assets doesn’t need any compassion. I started with negative equity 20 years ago and built what I have on my own, without any inheritance or handout from anyone.
On the other hand, the rent controlled crowd keeps giving themselves handouts, and want to punish landlords for any attempts to make a living at managing their hard earned assets.
Want to stop being “oppressed” by the greedy landlord? Buy your own place and be your own master. Living in someone else’s place and making outlandish demands to that same person is a higher form of hypocrisy.
Generally agree with these points and it describes my situation as well.
But, of course, the implication of your post about the 1985 lease is that by entering into a lawful lease of a rent-controlled apartment, and then continuing to reside there per the terms of the lease and the law, the tenant (who made a very good deal) is somehow a bad guy while the landlord (who made a very bad deal) is somehow deserving of being bailed out from his bad deal.
I’m with you on the bad policy of rent control – but I have [no] sympathy for a landlord who made a bad deal and now wants to be rescued from that bad decision.
To JR – Prop I in 1994, and many other subsequent new laws, turned that owner’s 1985 “good” deal into a “bad deal” in any 2-4 unit building. Hard to blame the owner for that.
I know many people who bought 2-4 units in the early 90’s – penciling out their investment as starting with negative cash flow, but eventually getting a decent ROI. They found themselves with permanent negative cash flows in exchange for their 20-30% down payment (often their life’s savings). Many had to walk away from it, or sell at a loss, all because of the “entitlement” mentality of the tenant majority in SF, and the politicians and activists who nurtured that sense of entitlement.
The people who lost by these changes know EXACTLY who bankrupted them – and it wasn’t themselves.
Yeah, yeah – I know. Prop I was 21 years ago. Rent control on bigger buildings was put in place 37 years ago. We’ve had this discussion many times. Sure, there is some very small percentage of rent-controlled units in which the tenancy started more than 21/37 years ago and then switched to RC. I agree those landlords got screwed. But those buildings have appreciated in value by millions or tens of millions of dollars. Rather than belly-ache, those “bankrupt” landlords would be better served to sell and live it up – crazy not to do so imho.
For the 90-plus% of current rent-controlled tenancies that began less than 21/37 years ago, complaining landlords just want out of their bad deal, a bailout. Sorry, it ain’t coming.
Put a repeal-rent-control ordinance on the ballot, I’ll vote for it (and watch it go down in flames). But current landlords who rented to a tenant with the rent control regime in place (i.e. pretty close to all of them), who them saw the tenant stay a very long time, have nobody to blame for their predicament but themselves.
JR, again with the ever debunked “but they knew what they were getting into”? I thought we had outgrown this already? You do know perfectly well that the balance of power is in favor of the tenant lobby who keeps moving the posts.
And yet you keep reposting it, hoping that it will stick. But you are choosing the non-antagonistic approach, appearing as the voice of reason, when actually you are not, when the real substance of your posts is combed through carefully.
I recall one poster I kept butting heads with, who did use the “they knew what they were getting into”, “landlords bellyaching”.
Are you Brahma?
Yes, any landlord who entered into a lease more recently than 37 years ago (larger buildings) or 21 years ago (2-4 unit buildings) knew what they were getting into. They would not be able to raise rents beyond the RC limits for – at the tenant’s option – the life of the tenant. Are you seriously disputing this?
The simple fact that we are discussing this again and again almost every week is the proof that conditions keep changing at a very fast pace. Every few week a new legislation is proposed to limit what a landlord can do with his property. It sometimes sticks and whenever this happens the landlords loses one more degree of freedom (in the mechanical sense).
Of course the goal is to leave only one degree of freedom that is acceptable by rent controlled tenants and their sycophants: rent to them, and for cheap.
It’s not 21 years or 36. The rules change from under our feet every few weeks.
Dr do bs- what the hell is this “the landlord made a bad deal” if the tenant he rented to decides to milk his RC unit for many years? Can the LL ask on the application, “so tenant, do you plan to rent here forever or do you plan to move out in 2,3,4 years?” A LL has no idea how long a tenant will stay. It’s usually a crap shoot. So, given the the oppressive RC environment, landlords have devised all kinds of clever ways to deal with RC to help them gain control of their properties. guess that’s ok by you too.
“A LL has no idea how long a tenant will stay”
Precisely. But for 37 (or 21) years, SF landlords have known that a tenant CAN stay for life at the tenant’s option (with an out via Ellis). If the landlord rented to the tenant anyway at a specified rent, and the landlord is now complaining about the rent he is receiving, he simply made a bad deal and gets no sympathy from me.
And no, I have no problem with landlords using “all kinds of clever ways to deal with RC” as long as its not illegal. Lots of legal avenues though – avoid 30+ day rentals, Ellis, sell, etc.
In other news: since Saturday rental rates in Paris are now fully controlled. A standard rate has been defined for each neighborhood. You can charge less (by 20%) or more (by 10%) than a pre-determined price point. The official rate has to be on a lease so that a tenant can have grounds for an adjustment.
I think this would be the Gang Of Four’s wet dream: the setting of rates by committee. Let’s put something on the ballot right now so that we see the little closeted commies show their true colors and jump all over themselves against the free markets?
Richmond too…on the cusp of adopting RC. Yikes!
This city was built by speculating developers. All that lovely Victorian and Edwardian housing stock in the MIssion and Hayes Valley was built by developers on Spec. Very few houses are custom built for their owners.
Same for the Castro and Noe Valley. Anytime I visit friends in these neighborhoods, I find the very same layout, window placement, staircase to the right, with the option, or not, to have separate entrances. They all started from the same design for around 80% of the house. The backs are always different though, since people tended to gain space as they acquired washers, installed better bathrooms and kitchen or simply expanded to the back. I heard of one developer in particular who had 2000 of the very same house built. Now these cookie-cutter homes will sell for 1.5M, 2M, 3M and even more. Luxury moldy row houses!
Reason #273 I am staying away from the regular market.
The home sales market is pretty strong in SF. Most new buyers nowadays buy to either live in or flip, not to rent out. The whole business of buying a rent control property for rental/investment purposes is long gone. I actually prefer to see older rental property (usually run down) change hands, remodeled, and lived in by homeowners.
The whole business of buying a rent control property for rental/investment purposes is long gone
If you were on SS between 2009 and 2011 you would have seen a lot of math on there claiming precisely the opposite. Buying between 2009 and 2011 was penciling out as a rental investment in many areas, even the most expensive ones. In late 2011 you could purchase for instance this 2-unit building in NV with a great view for less than $1M. Each unit had a 2BR. One was rented. The top one was available. 60 to 80K in buyout would have bought you 2 units that can rent today for 4500 each (3000 at the time). This is some great ROI if you can keep up with market rents.
There were GREAT deals. But there were even more scared buyers. Today they’re running all over themselves to pay 60 to 80% more.
Excluding Noe Valley, the rest of the city with much lower market rents, but nonetheless, high sale price, would not pencil out. Take most rental stock in the Richmond or Sunset districts, $3K a month for a two bedroom place is really stretching it. At that price point, folks rather buy.
That would be changing the premise of your own statement.
You state “long gone”. Now you are quoting today’s conditions. Of course today’s conditions are NOT favorable to rental investments. At least not if you want to sleep soundly at night.
But 5 years ago prices were much lower. That is not “long” by Real Estate standards. The Richmond or Sunset were dirt cheap in 2009-2011, and ROIs were comparable to the example I quoted. A 2-unit building could sell for 600K or even less. Some distressed properties would sell for under 500K. Considering each unit would rent for 2000, you would reach more than 8% gross annual rent/price ratio. This was a great time to buy. And as I said earlier, if you could keep the rent current to market, you would be making a killing today. A few on SS did jump on the occasion.
Saying there haven’t been great recent opportunities for rental investment is just not accurate. Every generation sees at least 2 or 3 buying opportunities. A friend of mine who works at Google had been renting for his growing family for many years, and when the time was ripe, he was always “it’s too expensive, there will never be good times to buy”. He is still renting. His (non controlled) rent on the Peninsula has almost doubled since and his wife is not happy with this situation.
I think this is great. The same kind of reason that I will vote for a Moratorium on housing in the Mission if given the opportunity.
In the short term it inflates my San Francisco property values. In the long term it increases the likelihood that a reasonable person, (good lord, that reasonable PEOPLE) will be willing to run against one or more of our clown supervisors and go through the tarring and feathering of the electoral process. It’s as if we’ve headed into our DiBlasio chapter without ever having had our Bloomberg.
I think it’s very likely that Sonja Trauss could run against one of these people and have a tremendous amount of support.
Really anyone willing to call a fake a fake in terms of Board efforts to stifle housing in the city. I would rather have some well-funded ticked-off Mission District developers/landlords pushing an alternative candidate slate. The only way to get someone well funded to openly oppose the system is to put us even farther into crazy territory.
I’m happy to help our politicians to make a mockery of themselves with the end goal being better politicians. It’s like the NYT giving Donald Trump so much press/rope just to be sure he hangs himself (and/or splits the non Hilary vote).
I thought the Costa-Hawkins Act said that once the last original tenant has left, the landlord can charge the remaining subtenants/roommates market-rate rent. But if I’m understanding this legislation correctly, those later-arriving tenants could now just be added to the lease, preserving the rent control even after the original tenants are gone.
If that’s right, how could San Francisco trump a state law like Costa Hawkins?
It could not. Otherwise I would proclaim my own Republic on my lot, and pass a law invalidating San Francisco’s Rent Control Ordinance.
As stated in the first comment, this is a exercise in grandstanding and will be gutted in the courts if it ever were to pass.
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