San Francisco Rent Board News Archive: 2024

Annual Rent Increase for 3/1/25 - 2/28/26 Announced

For rent-controlled units, the annual allowable increase amount effective March 1, 2025 through February 28, 2026 is 1.4%.

November 19, 2024

For rent-controlled units, the annual allowable increase amount effective March 1, 2025 through February 28, 2026 is 1.4%. This amount is based on 60% of the increase in the Consumer Price Index for All Urban Consumers in the Bay Area, which was 2.4% as posted in November 2024 by the Bureau of Labor Statistics. To calculate the dollar amount of the 1.4% annual rent increase, multiply the tenant's base rent by .014. For example, if the tenant's base rent is $2,000.00, the annual increase would be calculated as follows: $2,000.00 x .014 = $28.00. The tenant's new base rent would be $2,028.00 ($2,000.00 + $28.00).

The annual allowable increase amount effective March 1, 2024 through February 29, 2025 is 1.7%.

Read this article to learn more about rent increases. 

Here's a complete list of past annual allowable increases. This document is also available in our office.

New law prohibits algorithmic devices used to set rents in San Francisco

New law prohibits the sale or use of algorithmic devices to set rents or manage occupancy levels for residential units in San Francisco.

October 16, 2024

Legislation adding Section 37.10C to the Rent Ordinance went into effect on October 14, 2024. The law prohibits the sale or use of algorithmic devices to set rents or manage occupancy levels for residential units in San Francisco. 

The term “algorithmic device” means a device such as a software program that uses algorithms to analyze nonpublic competitor rental data for the purposes of providing a landlord recommendations on what rent to charge for a vacant unit. The law prohibits the sale or use of such algorithmic devices and allows a tenant or the City Attorney to bring a civil action if they believe an entity is in violation of the law.

Court of Appeal Invalidates 10-Day Warning Notice Legislation - Update #3

Court of Appeal Invalidates 10-Day Warning Notice Legislation.

September 12, 2024

On September 11, 2024, the California Court of Appeal issued a decision in San Francisco Apartment Assoc. et al. v. City and County of San Francisco (Appeal No. A166228) that invalidated Ordinance No. 18-22 and bars enforcement by the City. Specifically, the Court held that the legislation changes the required notice period for certain types of evictions and is preempted by state law. 

Any questions concerning the legal effect of the court's ruling on private parties should be directed to an attorney.

New Ordinance Amendments Regarding General Obligation Bond Passthroughs

The way General Obligation Bond Passthroughs are calculated has changed. In addition, Tenant Financial Hardship Applications used to only apply to some of the Passthrough. Now, it applies to the whole Passthrough.

May 21, 2024

Legislation recently passed that amends the Rent Ordinance to provide that General Obligation Bond Passthroughs from landlords to tenants must be calculated based on the amount the property tax rate has increased due to the repayment of general obligation bonds since the tenant’s move-in date (or Tax Year 2005-06, whichever is later). The legislation also allows tenants to seek relief from payment of the entire Bond Measure Passthrough based on financial hardship. The amendments to the Rent Ordinance take effect on June 10, 2024, and apply to Bond Measure Passthroughs that first go into effect on or after July 1, 2024.

Background

The Rent Ordinance limits rent increases on residential tenants, but allows landlords to “pass through” to their tenants a portion of the change in the property taxes that is the result of the repayment of certain categories of general obligation bonds (“Eligible Bonds”). Specifically, landlords can pass through 100% of the change in property tax resulting from bonds issued by the City between 1996-98; 50% of the change resulting from bonds issued by the City after 2002; and 50% of the change resulting from bonds issued by the San Francisco Unified School District or the San Francisco Community College District after 2006. The Controller calculates a Citywide passthrough rate each year, based on the amount of the property tax rate in that year that is attributable to Eligible Bonds. The landlord is not required to file a petition with the Rent Board for approval of the Bond Measure Passthrough. However, the landlord must use the Rent Board's Bond Measure Passthrough Worksheet in order to calculate the passthrough. To impose the passthrough, a copy of the completed Worksheet must be provided to the tenant in addition to a written notice of rent increase. 

What does this legislation change?

The legislation changed how the Controller calculates the tenant passthrough rates. Rather than using a standard passthrough rate for all tenants based on the total cost of the Eligible Bonds under repayment, landlords must now identify a specific passthrough rate for each tenant, which depends on the tenant's move-in date. Each tenant’s passthrough rate is based on a comparison of how much the portion of the property tax rate that pays for general obligation bonds of the three bond issuing entities (the “Bond Factor”) has increased between the current year, and the year that tenant moved into the unit (or Tax Year 2005-06, whichever is later). Unless the current year’s Bond Factor is greater than the Bond Factor in the year the tenancy commenced, no Bond Measure Passthrough is available. However, if the Bond Factor had increased since the year the tenancy commenced, the landlord may pass through to that tenant the portion of the increase that was attributable to Eligible Bonds. The Rent Board has updated the Bond Measure Passthrough Worksheets based on the Bond Factors calculated by the Controller's office to help landlords and tenants calculate the tenant passthrough rates. These changes only apply to Bond Measure Passthroughs that first go into effect on or after July 1, 2024, and do not affect Bond Measure Passthroughs that went into effect prior to that date. 

In addition, the legislation allows tenants to seek relief from payment of the entire General Obligation Bond Passthrough by filing a Tenant Financial Hardship Application. 

New Ordinance Amendments Regarding Unauthorized Dwelling Units (UDU)

Requires that where an owner obtains an exemption from the Conditional Use Authorization requirement to remove an unauthorized unit from a qualifying single-family home, the single-family home shall be subject to the rent increase limitations of the Rent Ordinance.

April 29, 2024

Effective April 28, 2024, the Board of Supervisors enacted legislation amending various sections of the San Francisco Planning Code regarding the removal of an unauthorized dwelling unit (UDU) in a single-family home. The legislation also amends Rent Ordinance Sections 37.2(r)(4)(D) and 37.3(d)(1)(D). The amendments create a new exemption from the requirement to obtain Conditional Use Authorization for removal of a UDU in a single-family home if all of the following criteria are met:

• the owner resides in the primary dwelling unit at the time of the application for removal of the UDU;
• the UDU has not been rented for consideration in the last 10 years, except to a qualifying family member, as defined in the legislation;
• the owner intends to reside in the single-family home for a period of three years after removal of the UDU is approved; and
• the owner enters into a regulatory agreement with the City that permanently subjects the single-family home to local rent control under the San Francisco Rent Ordinance.  

Read the full text of the legislation. 

Security Deposit laws are changing on July 1, 2024

AB 12 amends California Civil Code Section 1950.5 to limit the maximum security deposit for a dwelling unit to one month's rent, regardless of whether the unit is furnished or unfurnished.

March 01, 2024

California Assembly Bill 12 (AB 12) was passed by the State Legislature and signed by Governor Newsom on October 11, 2023.  

Currently, all California property owners are allowed to collect a maximum security deposit of two months’ rent for unfurnished units and three months’ rent for furnished units.  

AB 12 amends California Civil Code Section 1950.5 to limit the maximum security deposit for a dwelling unit to one month's rent, regardless of whether the unit is furnished or unfurnished.

However, if the property owner is (1) a natural person or a limited liability corporation in which all members are natural persons and (2) owns no more than 2 residential rental properties that collectively include no more than 4 dwelling units offered for rent, the maximum security deposit max not exceed two months’ rent, regardless of whether the unit is furnished or unfurnished.

The changes apply to security deposits collected on or after July 1, 2024.  

Click here to read the full text of the bill.

New Interest Rate for Security Deposits Effective 3/1/24

The rate of interest owed on deposits for the period March 1, 2024 through February 28, 2025 is 5.2%.

January 09, 2024

The rate of interest owed on deposits for the period March 1, 2024 through February 28, 2025 is 5.2%.

The rate of interest owed on deposits for the period March 1, 2023 through February 29, 2024 is 2.3%.

Pursuant to San Francisco Administrative Code, Chapter 49.2, the Rent Board calculates the interest rate according to the annual average of the 90-Day AA Financial Commercial Paper Interest Rate (rounded to the nearest tenth) for the immediately preceding calendar year as published by the Federal Reserve.

The new rate is published annually by the Rent Board in early January for the one-year period beginning March 1st.

Read this article to learn more about security deposits. 

Here's a list of interest rates for security deposits since September 1983. This list is also available at our office.

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