UNDERSTANDING RENT CONTROL AS A SAN FRANCISCO REAL ESTATE INVESTOR San Francisco Property Management Advice

Appfolio Websites • June 24, 2022

Maybe you’re thinking about investing in San Francisco real estate but you’re not sure what the notoriously strict rent control laws will mean for your rental properties. There’s a lot of confusion about rent control, the statewide mandate, and the role of the Rent Board in San Francisco property management.

We’re here to help. Here’s what you need to know about rent control when you own San Francisco rental properties.

RENT CONTROL AND THE ROLE OF THE RENT BOARD SF

The San Francisco Rent Board protects tenants from excessive rent increases and unjust evictions while assuring landlords fair and adequate rents. Every year, they announce the annual allowable rental increase for San Francisco rental properties.

1. DEFINING SAN FRANCISCO RENT CONTROL FOR LANDLORDS AND INVESTORS

Rent control depends on what type of property you have, and when it was built.

In San Francisco, when we talk about the local rent control ordinance, the magic date is June 14 1979.

Properties that were built and received their original certificate of occupancy after that date are exempt from rent control in all forms. It doesn’t matter if you have a single-family home, a condo, or an apartment building.

If your property was built before that date, your rent control laws will depend on the type of property you have. Single-family homes and condos are exempt from the rent control mandate, but are still subject to eviction controls. Multi-residential apartment buildings built before that date are subject to both rent control and eviction control. If you own a multi-family building or you’re renting out units in a building, you’re likely going to need a solid understanding of rent control limits and requirements.

2. WHAT DOES RENT CONTROL MEAN FOR RENTAL VALUES?

The San Francisco Rent Board sets the amount you can raise rent each year. You can only raise rent once every 12 months, and by the allowable increase. In November, new limits were announced for the next two years.

The annual allowable increase amount effective March 1, 2022 through February 28, 2023 is 2.3 percent. The annual allowable increase amount effective March 1, 2021 through February 28, 2022 is 0.7 percent.

3. SAN FRANCISCO RENT CONTROL AND JUST CAUSE EVICTION

There’s also an eviction element when it comes to rent control in San Francisco.

You cannot simply terminate a tenancy. You must have just cause. There are 16 different just causes, but the most common one is nonpayment of rent. The statewide rent control law passed in 2019 and effective January 1, 2020, impacted more rental properties, including those in San Francisco that might not have been included in the citywide rent control ordinance.

Be smart when you set your rent

San Francisco landlords must remember that there is no limit on the amount of rent a landlord may first charge the tenant when renting a vacant unit. You’ll need to do some market research so you understand the competition and the range of local rental values.

SAN FRANCISCO PROPERTY MANAGEMENT UNDERSTANDS RENT CONTROL

If you’re looking for some support when it comes to working within the confines of local rent control laws, consider seeking help from a San Francisco property management company. We have been following rent control laws for more than 30 years at BanCal Property Management. We can make sure your property is compliant with all state, local, and federal laws.

To hear more about our leasing and management services, please contact us at BanCal Property Management. We also welcome your comments, questions, and suggestions for topics you want to learn about, so please share those too. Let us know what you’d like to hear about when it comes to effectively managing a rental property in San Francisco.

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