The following page describes how to calculate a rent increase when a landlord increases the rent on a day and month that is different from your anniversary date. Your anniversary date is either: (1) The day and month of the last time your landlord increased your rent; or (2) The day and month your lease began (this applies if your landlord has never increased your rent).
Otherwise, there are two situations to consider: (1) Increasing the rent 12-24 months from the anniversary date; and (2) Increasing the rent more than 24 months after the anniversary date.
12-24 months from anniversary date
Consider the following example:
A tenant began a lease on June 1, 2018 and the landlord is considering raising the rent on December 1, 2019 (1 year and 6 months later). The landlord has two options using the following table.
Impose an allowable rent increase of 2.6% on December 1, 2019 (1 year and 6 months later). The landlord must then wait at least 12 months before applying the next rent increase
Wait until the anniversary date of June 1, 2020 (exactly two years since the anniversary date) to impose an allowable rent increase of both 2.6% from the previous period and 1.8% for the “current” period for a total allowable increase of 4.4%
24 months or more from anniversary date
A similar methodology applies for rent increases beyond 24 months. Consider the following example:
A tenant began a lease on April 1, 2016 and the landlord is considering a rent increase on June 1, 2019 (3 years and 2 months later). Like the above example, the landlord has two options using the following table
Apply a rental increase on June 1, 2019, which includes three periods (2.2%, 1.6%, 2.6%) for a total increase of 6.4%. The landlord would not be able to increase rent for at least 12 months (June 1, 2020)
Wait until the anniversary date of April 1, 2020 to apply the four previous years’ rent increases (2.2%, 1.6%, 2.6%, 1.8%) for a total increase of 8.2%
It’s easiest when landlords apply rent increases on anniversary dates. Otherwise, landlords must consider the trade-off between immediate increases to rents versus potentially larger rental increases if they wait until a tenant’s “anniversary date.”
For further resources, the Rent Board offers more examples on how to calculate rental increases.
Increases cannot be compounded
Landlords are not required to file a petition with the City to impose these types of rent increases
Landlords cannot “round up” to the nearest dollar when calculating rent increases
Landlords should give at least 30-days notice in writing before any increase goes into effect (or 35-days if sent by mail).
Landlords can only increase the rent on “base rent” and cannot include any “passthrough charges” (such as water bonds, tax bonds, improvement costs) in the increase calculation. However, rent paid for parking or storage space is generally considered part of the “base rent.”
Landlords can only increase the rent once every 12 months. In other words, landlords cannot raise the rent on a unit within 12 months of the prior rent increase (or move-in date). The only exception is when rent is temporarily increased due to improvements on the building.
The following is a basic summary and does not, and is not intended to, constitute legal advice. If you have specific questions about your situation, please contact a SF Rent Board Counselor or visit www.sfrb.org for more information.