Category Archives: SF Legislative Update

San Francisco Legislative Update (2018): San Francisco No Longer Allows Increased Debt Service and Property Tax Passthrough Rent Increases

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San Francisco has passed Supervisor Fewer’s proposal to eliminate “debt servicing” passthroughs to tenant’s rental rates. In general, a landlord can only increase the rent for tenants in rent-controlled apartments by a limited amount (which, in San Francisco, is a 60% of the increase in the consumer price index, as published by the US Dept. of Labor, in the preceding year). As of this post, for instance, this “annual allowable increase” is 1.6% of the tenant’s “base rent”.

To avoid confiscatory results of price controls, however, the Rent Ordinance has allowed additional increases based on things like utilities, taxes, capital improvements and… debt servicing. However, Supervisor Fewer aimed to close a perceived loophole in this rule, where owners would load a property with debt for the specific purpose of increasing the rental rate.

Ordinance 132-18 amends Rent Ordinance Section 37.8 (“Arbitration of Rental Rate Adjustments”) to prohibit rent increases based on increased debt.

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Supervisors Peskin and Fewer Introduce Legislation Supporting CA Prop. 10 – the Repeal of the Costa-Hawkins Rental Housing Act

Supervisors Peskin and Fewer have introduced legislation for San Francisco to “support for full repeal of the Costa-Hawkins Rental Housing Act, which would enable policymakers across the State to confront the housing affordability crisis by expanding rent control, enacting and implementing vacancy control, and taking other critical steps to stabilize neighborhoods and communities across the State of California”.

Currently, local governments are permitted to set price controls for rent, with some exceptions for single family homes and condominiums, new construction, and most vacant rental units (unless a landlord has performed a “non-fault” eviction, like an Ellis Act withdrawal or owner move-in eviction). A repeal of Costa-Hawkins would remove those exceptions, allowing regulations like “vacancy control”.

The Costa-Hawkins repeal effort will appear on the November ballot as Proposition 10.

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San Francisco Election Update: Proposition F (2018) – “No Eviction Without Representation Act of 2018”

Referencing Gideon v. Wainwright (the landmark U.S. Supreme Court case finding a constitutional right to criminal defense counsel) and the City’s 2012 declaration as a “Right to Civil Counsel City”, Proposition F seeks to provide defense counsel to tenants in unlawful detainer cases.

According to 2014 statistics from the Budget and Legislative Analyst, 80 to 90% of tenants face evictions without representation. If passed by a simple majority in June, the “No Eviction Without Representation Act of 2018” would add Section 58.4 to the SF Admin Code, providing full representation for residential tenants in eviction lawsuits (with an exemption for owners or master tenants evicting roommates).

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Legislative Watch: AB 2343 (2018): Amendment to Unlawful Detainer Statutes To Extend Breach Cure Period and Tenants’ Time To Respond to Complaint

AB 2343 (2018), introduced by Assemblymember Chiu, seeks to significantly alter the the timing involved in unlawful detainer actions.

Unlawful detainers (often referred to as an “eviction lawsuit”) are unique among civil actions for their summary character. This is because, unlike other civil actions, they proceed on a five-day summons (instead of thirty), and most of their discovery and law & motion procedures are condensed as well. (Because of this, there have also been consequences for failure to “strictly comply” with the unlawful detainer statutes, in that a landlord must properly plead why she has standing for an unlawful detainer case (as opposed to, say, a breach of contract and ejectment lawsuit), as other causes of action and cross-complaints are generally not allowed. This also means that a landlord has served, e.g., a “three-day notice to cure or quit” that has expired prior to commencing the eviction lawsuit.
Continue reading Legislative Watch: AB 2343 (2018): Amendment to Unlawful Detainer Statutes To Extend Breach Cure Period and Tenants’ Time To Respond to Complaint

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San Francisco Election Update (Archives): Proposition I (1994) – Removing Four-Unit Owner-Occupied Building Exemption from Rent Ordinance

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On November 8, 1994, San Francisco voters passed Proposition I, which removed the provision of the Rent Ordinance exempting owner-occupied buildings with four or fewer units from the Rent Ordinance. That provision of (former) Section 37.2(p)(5) defined “rental units” to exclude “owner occupied buildings containing four (4) residential units or less, wherein owner has resided for at least six continuous months”.

Proposition I rolled back rents to their May 1, 1994 levels and it applied eviction control provisions to these rental units. The Rent Board also amended its Rules & Regulations to apply the new changes.

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Legislative Update San Francisco Ordinance 95-17 Expanding Use of Accessory Dwelling Unit Density Bonuses in Conjunction with Seismic Retrofit

San Francisco’s Ordinance 95-17 expands the use of accessory dwelling units (“ADUs”) in existing structures from the previous ADU density bonus ordinance.
Continue reading Legislative Update San Francisco Ordinance 95-17 Expanding Use of Accessory Dwelling Unit Density Bonuses in Conjunction with Seismic Retrofit

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San Francisco Legislative Update (Archives): “Just Cause” Required To Sever Housing Services

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San Francisco Ordinance 178-06 amended the Rent Ordinance to require the same “just cause” for severing housing services as is required for evictions.

The Rent Ordinance defines housing services to include quiet enjoyment of the premises, 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, 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.

While some of these items seem inexorably intertwined with the rental unit itself, others – like access to a parking space – could previously have been “severed” by simply changing the terms of the tenancy to no longer include a parking space. The Board of Supervisors worried that this led to de facto evictions, where landlords gradually took away the amenities that tenants depended on, in an effort to urge them to vacate. By requiring “just cause” for severance, the City prevents these items from being removed piecemeal, where a landlord may only take away such housing services with sufficient cause (e.g., permitted work to convert garage space into an ADU unit).

The corollary of this concept is found in Rent Board Rules & Regulations §12.20, which provides that a tenant cannot generally be evicted for violating a unilaterally-imposed change to the term of their tenancy. (This was the subject of the 2015 opinion Foster v. Britton.)

You can read the full text of Ordinance 178-06 here.

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San Francisco Legislative Update (Archives): Leno Amendment Adding “Number of Occupants” to the List of “Housing Services” and Prohibiting Evictions for Subletting Where Landlord Unreasonably Withholds Consent

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The “Leno Amendment” to the Rent Ordinance (enacted through Ordinance 237-99 added to the list of “housing services” the 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 assignment and/or subletting.

It also limited evictions for breaches of lease covenants where the landlord has unreasonably withheld consent to sublet and the tenant has only made a one-for-one replacement of occupants.

You can read the full text of Ordinance 237-99 here.

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San Francisco Legislative Update (Archives): San Francisco Expands “Mitigation Payment” to All Tenants Displaced by the Ellis Act

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San Francisco Ordinance 21-05 expanded the scope of relocation assistance “mitigation payments” to all tenants displaced by the Ellis Act, regardless of whether they were “low income”.

Ordinance 21-05 provided for an inflation adjusted payment (roughly tracking first months’ rent, last month, and security deposit), which payment was upheld as “reasonable” in the case Pieri v. City & Cty. of San Francisco (2006) 137 Cal. App. 4th 886. However, the “Pieri reasonableness” standard was called into question in the case Coyne v. City & Cty. of San Francisco (2017) 9 Cal. App. 5th 1215, which measured the propriety of mitigation payments by whether they imposed a “prohibitive price” on a landlord’s exercise of his state law right to go out of the residential rental market.

You can read the full text of Ordinance 21-05 here.

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Board of Supervisors Passes Ordinance Amending Rent Ordinance To Address “Fraudulent Owner Move-In Evictions”

The San Francisco Board of Supervisors finally passed one of two competing bids to strengthen the “Owner Move-In” provision of the Rent Ordinance. The proposed changes followed an NBC Bay Area investigation into the occupancy status of dwelling units where the landlord had initiated an OMI eviction.

The NBC Bay Area investigation attempted to determine whether these dwelling units were, in fact, occupied by owners following the termination of the previous tenancies. It reviewed each of over 300 OMI notices filed with the Rent Board in 2014. After making contact with occupants of about 100 of these units, it found tenants paying higher rent, instead of owner-occupiers, in roughly a quarter of the units.

Existing law requires that a property own who invokes the OMI provisions move into the unit within 3 months, occupy it as their full-time residence for 36 months. A property owner must do all of this in good faith, and, while it is permissible to vacate earlier (e.g., if the owner relocates and moves out sooner than expected), and resume rental use, the property owner was required to re-offer the unit (1) at the former rental rate, and (2) to the displaced former tenant, for a period of three years following the service of the notice of termination.

In an effort to address these alleged “fraudulent OMIs”, the Board of Supervisors has been considering competing proposals, by Supervisor Farrell and Supervisor Peskin, for the last several months. Each would to enhance the constraints on re-rental of units recovered in OMI evictions (extending the timeframe to reoffer to the displaced former tenants from three to five years). The Board of Supervisors ultimately passed Farrell’s version, which also provided for misdemeanor liability.
Continue reading Board of Supervisors Passes Ordinance Amending Rent Ordinance To Address “Fraudulent Owner Move-In Evictions”

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