Home | State Tax Profiles | Tax Calendar | Locations | Client Connect Login

San Francisco Apartment Properties Need a License to Raise Rents

by Scott Donald, Irvine, January 2021

San Francisco passed a new ordinance that opponents say will significantly increase costs for landlords of multifamily properties.

 

The ordinance requires apartment owners to provide confidential information on rent prices and occupancies to the city’s Rent Board. In exchange, they can obtain a license that allows them to raise rents.

 

Monitoring Compliance

 

City officials say the goal of the ordinance is to collect data and maintain an inventory of housing units. This information is designed to help monitor landlord’s compliance with San Francisco’s Rent Ordinance, which determines how much landlords can increase rents on an annual basis.

 

The new reporting obligation will be implemented July 1, 2022. Owners must report the following information under penalty of perjury for each unit:

 

1.

 

The mailing address of the unit.

2.

 

The name and business contact.

3.

 

The business registration number for the unit, if any.

4.

 

The approximate square footage, and number of bedrooms and bathrooms in the unit.

5.

 

Whether the unit is vacant or occupied.

6.

 

For vacant units, the last date of occupancy.

7.

 

For occupied units, the date the occupancy commenced.

8.

 

For tenant-occupied units, the base rent reported in $250 increments and whether the base rent includes specified utilities.

9.

 

If during the previous 12 months an occupied unit became vacant or a vacant unit became occupied, the report shall include the date(s) the unit became vacant or occupied.

10.

 

Any other information that the Rent Board deems appropriate.

 

Updated information will be due on or before July 1 of each successive year. Owners shall also be required to update this information within 30 days of any change in the name or business contact information of the owner or designated property manager.

 

The Cost

 

The price of creating a multifamily housing database in San Francisco is estimated to cost up to $900,000. It will require an additional $500,000 each year to maintain it. These costs will be passed on to landlords as part of the licensing process. As vacancy rates rise and missed payments accumulate amid the COVID-19 pandemic, apartment owners say the new ordinance will add another financial burden at the worst possible time.

 

With the passage of the ordinance in San Francisco, analysts wonder whether it will spread to other commercial property owners and whether similar ordinances will be adopted in other cities and counties as well.