By Thomas K. Pendergast
Starting in 2022, landlords will have to register their residential rental units with San Francisco’s Residential Rent Stabilization and Arbitration Board and get a license following a unanimous decision by this San Francisco Board of Supervisors to create an inventory list.
Tenant housing advocates have long supported this new measure as a necessary step to enforce rent control laws, but others are calling it government overreach and an invasion of privacy.
The ordinance amends the City’s administrative code to require owners of residential dwelling units to report certain information to the Rent Board, authorizes the Rent Board to issue licenses to property owners and requires that landlords have this license to impose certain types of rent increases.
“This is long overdue,” the sponsor of the ordinance, District 1 Supervisor Sandra Lee Fewer, told the other supervisors when it came before them for a vote. “My office has spent years working with advocates and City departments to get this right.”
“San Francisco adopted our rent ordinance back in 1979 to safeguard tenants from excessive rent increases,” Fewer said. “Since then, the rent ordinance has allowed the City to regulate rents and has helped protect tenants from losing their homes because of real estate booms and gentrification. But one thing the City lacks is an accurate inventory of the City’s existing housing stock.
“In order for the Rent Board to track landlord-tenant relationships, analyze housing services and rents, and better administer the rent ordinance, we need them to maintain an accurate inventory of our existing rental housing stock,” she said.
“During this pandemic we have seen major changes in our rental housing market, with some people unable to pay rent due to COVID and many others choosing to leave the City to work remotely,” Fewer said. “We know that this has created more vacancies, but we don’t know where or how many. We don’t know what actual rents look like for existing tenants.”
Fewer explained that maintaining an accurate housing inventory and tracking vacancies are intended to help the rent board monitor compliance with laws against using rent-controlled units for corporate rental purposes. It also aims to identify units that can be used in an emergency for “good Samaritan” purposes.
“It’s more important than ever to have complete data, to understand the depth and nature of our affordability crisis,” said Cynthia Fong, an advocate with the Housing Rights Committee of San Francisco. “Simply knowing what average market-rate rents are is not enough.
“According to the last inventory of our citywide rental housing stock, 30,000 units sit vacant,” Fong continued. “Data about occupancy and rents are only collected every five years and we know that this information is already being collected by private real estate investors and is being used to drive our market prices up and make things unaffordable, which maximizes profits for banks and Realtors.”
Dana Huffstutler of the West Side Tenants Association noted other benefits of the new ordinance.
“This housing inventory would inform policy decisions and highlight ways to make equitable use of available land to address our housing needs along with preserving the housing we already have,” Huffstutler said.
City officials say these licenses will allow landlords to annually make certain rent increases if they give the information required. The cost of implementing the ordinance would be covered by a surcharge on the existing annual Rent Board fee. They also estimate that there are 233,518 rental housing units in the City that would be required to get the license.
They surveyed nine other cities which have implemented similar rules and reported the range of costs in implementing such programs in the first year was between $1.4 million and $3.2 million (which includes staffing and operation costs), and they estimate in the subsequent years, the ongoing costs would drop down to a range of $1.2 million to $2.8 million per year.
The current annual Rent Board fee charged to landlords is $50 per unit. In the first year of the new ordinance, the cost of the surcharge is estimated to be approximately $5.89 per unit on the low side, but possibly as high as $13.91 per unit, annually. After that, the ongoing annual surcharge is expected to average out to a low of $5.18 per unit to a high of $12.16 per unit.
During the public comment period, opponents of the ordinance claimed that tenants would consider it an invasion of privacy, objecting to their personal information being given to the Rent Board. Some said that the existing Rent Board processes work just fine at preventing illegal rent increases. It was also expressed that it would change the Rent Board’s policy from a petition- or complaint-based enforcement to active enforcement of rent ordinances.
Robin Richardson told the Board that she is a small apartment owner who opposes the legislation.
“It’s a big invasion of privacy,” she said. “We already have to jump through so many hoops to take care of all of the rules and regulations that are there. Tenants are strongly protected by the Rent Board, the rent caps we have. We have tenants that are paying literally hundreds per month.
“It’s a struggle. We’ve already lost about 35% of our tenants, and our other bills do not go down. This is just burdensome and it’s nice to have all this data, but it doesn’t provide any benefits for anybody.”
Peter Holden said he owns a four-unit building, and he objects to the legislation as it is currently written.
“What the legislation does not address is a big problem that I’ve noticed from relatives that have tried to rent: flats that are rented out with a master tenant do not seem to have any effective form of rent control,” Holden said. “They might be paying $1,600 and the person renting from them might be paying $1,500. There’s no way for that person to know that is unaffordable and unjust. So it seems to me a rental regulation registry ought to include flats with master tenants and roommates and the effective rent for each room.”
The Rent Board’s Executive Director Robert A. Collins discussed the impact it would have on them.
“We have been working to try to minimize the amount of effort and resources that it would take for the Rent Board to carry out this particular housing inventory,” Collins said. “When we first heard about the licensing requirement, for example, we were concerned what that would entail. But I think we’re all envisioning a system where you would register online and it would – hopefully for most people – be entirely done through (an Internet) portal.”
He also said they will probably need to give extra attention to the smaller property owners because they might need “more hand holding” through this process.
“I don’t want to minimize the concerns or the fact that it is a significant workload for us,” he said.
I am with Engel Voelkers real estate. I would like to keep my property owners up to date on this topic. May I reproduce this and do you have a follow up?
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