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Rent Increases


The Rent Board (415-252-4602) is the administrative body responsible for administering the Rent Ordinance and arbitrating fair rents in San Francisco. The San Francisco Rent Ordinance limits rent increases for apartments covered under the Ordinance. As of November 1994, all apartments built in San Francisco before June 15, 1979 are covered under rent control. Units which are exempt from the Ordinance are those units subsidized by the government, non-profit buildings, and institutional properties. Tenants who reside in residential hotels are covered by the Rent Ordinance after residing in the same unit for 32 days. Tenants in single-family homes and condos, in certain cases, lost rent control on January 1, 1999. For more information call us at 703 - 8644. Persons renting TICs (tenancies in common) should also call us for info on whether they are covered by rent control.

If you do not live in a rent-controlled apartment, there are no restrictions on rent increases other than those imposed by your lease or rental agreement.

Some increases (i.e., pass-throughs that are not the normal allowable yearly rent increase) require Rent Board approval, others do not. It is a good idea to check with The Housing Rights Committee or the Rent Board to determine if your increase is legal. Since there are some statutes of limitations, it may be difficult for you to rectify an improper increase later.

Landlords are allowed annual rent increases set by the Rent Board. On March 1st of every year, the Rent Board publishes the allowable rent increase for the following twelve months. Annual rent increases do not require Rent Board approval. However, a tenant must be given a written 30-day notice of a rent increase (unless it's more than 10%, then it's a 60-day notice).

BANKING

Banking is when a landlord chooses not to impose a rent increase at the time it comes due, but instead imposes it in a later year. Increases can be banked back to 1982. Remember, if the increase is 10% or more, then the landlord must give a 60-day notice.

To calculate the proper amount of a banked increase, it is necessary to know the allowable rent increase for each year. When figuring out the banked increase, add up all the percentages for the years, for example, .8 + .6 = 1.4%. Multiply the 1.4% by the base rent and you have the amount the rent can be raised.

Until March 1, 1984 the allowable increase was 7.0%.
March 1, 1984 and Dec. 8, 1992: 4.0%.
Dec. 8, 1992 and March 1, 1993: 1.6%.
March 1, 1993 and Feb. 28, 1994: 1.9%.
March 1, 1994 and Feb. 28, 1995: 1.3%.
March 1, 1995 and Feb. 28, 1996: 1.1%.
March 1, 1996 and Feb. 28, 1997: 1.0%.
March 1, 1997 and Feb. 28, 1998: 1.8%.
March 1, 1998 and Feb. 28, 1999: 2.2%.
March 1, 1999 and Feb. 28, 2000: 1.7%.
March 1, 2000 and Feb. 28, 2001: 2.9%.
March 1, 2001 and Feb. 28, 2002: 2.8%.
March 1, 2002 and Feb. 28, 2003: 2.7%.
March 1, 2003 and Feb. 28, 2004: 0.8%.
March 1, 2004 and Feb. 28, 2005: 0.6%.
March 1, 2005 and Feb. 28, 2006: 1.2%.
March 1, 2006 and Feb. 28, 2007: 1.7%.
March 1, 2007 and Feb. 28, 2008: 1.5%.
March 1, 2008 and Feb. 28, 2009: 2.0%
March 1, 2009 and Feb. 28, 2010: 2.2%
March 1, 2010 and Feb. 28, 2011: 0.1%
March 1, 2011 and Feb. 28, 2012: 0.5%
March 1, 2012 and Feb. 28, 2013: 1.9%

If it's obvious that your rent has been wrongfully increased (for example, the allowable increase is 1% and the landlord is trying to raise it 3%), you can file a Summary Petition at the Rent Board.

ILLEGAL RENT INCREASE
This petition alleges a wrongful rent increase and requires the Rent Board to hold a hearing. If the Rent Board determines that the increase is illegal, the rent will be reset to the correct amount and the landlord will be ordered to refund the entire increase for the period it was incorrect. Rents can be re-funded going back three years.

OTHER INCREASES
Landlords can increase tenants' rent to cover increases in the cost of utilities such as electricity and water. Utility increases do not require rent board approval but paperwork must be filed with the Rent Board.

If landlords pay the PG&E and water bill and can show that these costs have gone up, they are allowed to pass the increase in costs onto the tenant. Also, if the landlord pays the water bill and is fined because too much water was used in the building, the landlord is allowed to charge the tenants in the building a portion of that penalty, as long as there are water conversion devices installed in the bathrooms.

The Rent Ordinance rules specifically state how these passthroughs are calculated. It is a good idea to check the rules to make sure the increase has been calculated properly. A tenant is entitled to proper notice before paying for a utility passthrough. Ask the landlord to provide documentation, i.e., a copy of the bill for past and current months, that proves that the rates have gone up significantly.

However, no Rent Board approval is needed for bond passthroughs.

CAPITAL IMPROVEMENTS

A landlord may petition the Rent Board to pass on to tenants the costs of renovations to the property. This includes work that prolongs the life of the building, such as roof replacement, exterior painting, seismic retrofitting, etc. Capital improvement rent increases cannot occur without the Rent Board’s approval. In order to pass on these costs, the landlord must first petition the Rent Board and receive approval. The Rent Board sets up a hearing before it grants approval. Tenants have the opportunity at the hearing to argue against the petition.

Tenants can be evicted temporarily for a period of up to three months for capital improvement work which will make the unit uninhabitable while this work is being done. The landlord can request written extensions. The tenant must be allowed to reoccupy the unit once the work is completed. Prior to the work, all necessary permits must be obtained before the tenant can be asked to leave.


A proper eviction notice must be given for this type of eviction. Tenants must be paid relocation costs (they're the same as for owner move-in, see our
eviction page). The tenant must let the landlord know before moving that she is interested in re-occupancy.

The landlord must submit a petition for a capital improvement increase to the Rent Board before she can pass it on to tenants. A landlord must provide proof of the cost of the project. Info on what work was done and to which tenant the increase applies must also be included. The Rent Board then sets a hearing date and notifies affected tenants by mail at least 10 days prior to the hearing. The tenant may file a written response at any time before the hearing.

It’s important that as many tenants in your building as possible attend the hearing. Information from both landord and tenants and/or their representatives may be submitted. The Hearing Officer will question the landlord and review the documents, then open the record to tenant questions and evidence. The Hearing Officer will consider the past history of rent increases, as well as failure to perform ordinary repairs, and to comply with applicable state and local law.

At the hearing, raise objections. Allowable objections to the landlord’s petitions include:
 
The work was not done at all, was shoddy, was done without permits, was done a long time ago, or was never completed.

The work was either necessary only because of deferred maintenance (the landlord neglected repairs), or was unnecessary and only undertaken for purposes of  “gold plating.”

You moved in within six months of the landlord doing the work and therefore do not have to pay.

You objected to the work; it was not done in response to health or safety concerns or to reduce maintenance costs.

The landlord didn’t spend as much as he claims or got insurance money to cover the costs.

The work is overly luxurious or more costly than required.

Note: A landlord cannot pass on the cost of replacing appliances s/he owns and that she charges a use fee for, e.g., coin-operated washers and dryers. Appliances may be amortized when part of a remodeled kitchen or if they are new services or appliances the tenant did not previously have. If the appliance is a replacement for a current one, the cost will not be amortized as a capital improvement, but will be considered part of operating and maintenance expenses (except for EPA-energy-star compliant appliances.

The Hearing Officer will write a decision within 30 days and send copies to all parties. Both sides have 15 days from the notice of the decision to appeal.

 
A tenant can appeal a capital improvement increase on the basis of hardship. The criteria used is HUD guidelines, ie., rent payments should compose no more than 30-35% of gross income. If the appeal is accepted, you’ll be required to submit financial documentation.

CAPITAL IMPROVEMENT PASSTHROUGH RULES

Buildings with 1 to 5 units

100% of the certified costs of capital improvements may be passed through to the tenants. Amortization (period over which payments are stretched) schedules are 10, 15 and 20 years. Capital improvement rent increases are limited to 5% of base rent at the time the petition was filed or $30, whichever is greater, in any 12-month period.

Buildings with 6 or more units

Only 50% of the costs of improvements can be passed through. Amortization schedules remain 7 and 10 years; rent increases limited to 10% of the tenant’s base rent at the time the petition was filed or $30, whichever is greater, in any 12-month period. In place of the above, a tenant may elect to have 100% of the costs passed through to the tenant, with an annual limitation of 5% and a total limitation of 15% of the tenant’s base rent applicable to the capital improvement rent increases. (Note: This option may be chosen within 15 days after a decision on a 50% passthrough is mailed to tenant.)

100% of the certified cost of seismic work required by law (and other work required by laws enacted after 11/14/02) may be passed through, subject to the 10%/$30 limit. Amortization schedule is 20 years. (Note: Seismic work not required by law follows the regular scheduled according to building size.) 100% of the cost of energy conservation work approved by the Commission on the Environment may be passed through and there is no annual limit on amount of the passthrough. (At present, EPA energy-star-compliant refrigerators are the only items approved for certification.)

All capital improvement petitions which request certification of more than $25,000 in costs must include copies of either competitive bids for the work or copies of time and materials billing for work performed by all contractors and subcontractors. Otherwise, landlord must pay for an estimator hired by the Rent Board. Rent Board may not certify work required to correct code violations for which an NOV (Notice of Violation from the Dept. of Building Inspections) remained unabated for 90 days unless the landlord made timely good faith efforts to complete the work within the 90-day period.

rent too high

For more information, you can call us or stop into our housing rights clinic, Monday-Thursday, 1-5pm, 415-703-8644.


Some Quick Tips:

If you live in a rent-controlled apartment, the landlord can only raise the rent a small amount each year, an amount determined by the Rent Board.

If your landlord does not charge you the annual rent increase, he can go back in a future year and take that increase. If he has not raised it for many years, he can take all those increases at once. There is no limit to how many years he can go back at once.

A landlord can petition the Rent Board to raise your rent because of capital improvements he did to the building or your apartment. See the section to the left on the rules for a capital improvement passthrough.

Bond measure passthroughs do not require Rent Board approval.  Utilities passthroughs require filing at the Rent Board, but not necessarily Rent Board approval. We suggest calling the Rent Board (252-4602) for advice on your particular situation.