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Rent Control Rules in San Francisco, CA


Rent Control Lawyer in San Francisco, CA


The cost of renting in California has climbed steadily over the past few decades. San Francisco and the Bay Area have some of the highest rents in the United States.

As a landlord, you should have the right to raise your rents to fair market value in compliance with the California rent control law. Unfortunately, applicable laws usually weigh in favor of tenants and offer landlords little opportunity to raise rents. In this case, our seasoned San Francisco landlord-tenant lawyers at Steven Adair MacDonald & Partners, P.C. can help you understand the landlord’s rights under the statewide rent control law.

Why Do I Need a Landlord-Tenant Lawyer in California?

Rent control laws are strict and complicated. Knowing how and when to increase the rent is not as easy as it may seem. It requires in-depth knowledge and extensive experience.

Our credible San Francisco landlord-tenant attorneys at Steven Adair MacDonald & Partners, P.C. can help you navigate and understand the law. Let us put our knowledge and advocacy skills to work for you. Contact our landlord-tenant law firm now and schedule an initial consultation.

What is Rent Control?

California Rent Control LawRent control is a broad term for legislation that limits rental rates in a city or state. It dictates how often rent can change, identifies who oversees these increases, and touches on the legalities of these affairs. The idea of rent control is to put a cap on the amount of rent increase that a landlord can charge. In most cases, the percentage of increase depends on the area’s annual Consumer Price Index (CPI).

Rent control laws are city or county ordinances that specify a maximum percentage by which landlords can increase rent along with corresponding limits on the frequency of increases. These laws tend to be extremely complex. Therefore, it is advisable to seek legal advice from a reliable San Francisco landlord-tenant attorney to help you determine the restrictions and exceptions of these rent control laws.

How Does Rent Control Work in California?

California has a statewide act that limits rent increases and removes the right of landlords to evict tenants without just cause. When rent is “controlled”, a landlord cannot unfairly raise the price of the rent year-to-year. This policy aims to maintain a base of affordable housing for low- and moderate-income tenants. A skilled San Francisco CA landlord-tenant lawyer can help you understand how rent control works.

Rent Increase

Knowing that there is high demand might make it tempting for landlords to try and increase rents beyond reasonable expectations. This is where California rent control laws come in, to protect tenants from extreme and sudden rent hikes.

Rent control measures are implemented to prevent rent prices from spiraling out of control, especially in high-demand areas. Under the new legislation, landlords will only be able to raise the rent by 5% (plus the local rate of inflation) for any existing tenant. In addition, property owners are also prohibited from increasing the rent more than twice a year.

Eviction

Along with the rent cap, the bill extended eviction protections to tenants across the state. The Tenant Protection Act also shields tenants from eviction without cause. A renter cannot be evicted if they have been residing in a property for more than 12 months unless there is a just cause. Landlords who violate eviction protection laws often face harsh civil and even criminal penalties.

Reasons for eviction are categorized as “At Fault” and “No-Fault” just causes. “At Fault” just causes for eviction include nonpayment of rent, breach of the lease agreement, and serious damage to the property. Landlords must give tenants a chance to fix lease violations. On the other hand, “No-Fault” just causes for eviction include the owner moving into the rental unit, converting or renovating the rental property, or demolishing the unit. In these cases, a property owner must offer the tenant a relocation fee equal to one month’s rent.

What are the Advantages of Rent Control?

Rent control laws have advantages and disadvantages for both landlords and tenants. These policies may vary from state to state. A qualified San Francisco landlord-tenant attorney can help you understand the benefits and consequences of rent control. Here are the general pros and cons of such legislation that landlords should keep in mind when considering the potential impact of these measures on their business:

Financial Savings for Tenants

Rent control has numerous advantages for tenants, allowing them to achieve financial stability, keep families in their houses, and prevent working-class individuals from being priced out of their long-time homes and communities. It would also allow lower-income tenants to have access to affordable homes. These types of tenants not only struggle to keep a home, but they often have difficulty securing a home in the first place.

Keeping rental rates predictable and in check makes it easier for tenants to budget successfully and pay on schedule. They can better plan for the future if they know their rent isn’t going to increase dramatically each year.

Lower Tenant Turnover

Landlords can also benefit from rent control laws. Because rents are capped, tenants are much more inclined to stay in a property for an extended term. Moving out of the property would mean risking a big increase in price for their next place. Lower tenant turnover leads to a lower vacancy rate. This means that landlords won’t have to deal with vacancies every year because the current tenants will likely renew their leases.

What are the Consequences of Rent Control?

Rent control policies are designed to keep housing within reach for lower-income families. Still, those policies fall short when they neglect to consider the interests of landlords and property owners who maintain such homes. Anyone thinking of being a landlord should weigh the rent control pros and cons to determine if investing in a regulated neighborhood would be profitable. A knowledgeable San Francisco CA landlord-tenant lawyer can help you protect your rights as a landlord when facing rent control issues.

No Incentive to Upgrade Home

Landlords often upgrade their homes and appliances every few years to keep the tenants there or to attract new tenants. When a home has upgraded appliances, you can often raise your rent price due to the added amenities. However, with rent control laws in place, the incentive to upgrade the home decreases dramatically. In this case, landlords are likely to keep the same appliances until they break down and then replace them with a similar model.

Older Units

While rent control usually favors the tenants, they should keep in mind that most rent-controlled properties are older units. Landlords might do the bare minimum repair and maintenance based on local law in an attempt to save money.

Prices Fall Below the Market Value

Rent-controlled apartments and houses tend to fall below-market rents. This means that landlords won’t make as much income from their properties as they could be. The longer the unit is rent-controlled, the further it will fall behind.

Puts a Limit on Profitability

Because rent control limits how, when, and by how much landlords can raise the rent, it puts a cap on their potential profit. Moreover, rent control reduces the supply of decent and affordable housing, as landlords would rather convert a building to condos or adapt it to commercial use than abide by a law that limits their profits.

Disregards Property Taxes

In many states and cities, property taxes are rising continuously. Unfortunately, rent control laws don’t usually take into consideration how changes in property taxes can place a burden on landlords. As a result, many landlords end up spending a high percentage of their rental income on property taxes.

Retains Bad Tenants

Just like rent control encourages good tenants to renew their leases, it also incentivizes bad tenants to stay. Since rent control laws usually have strict eviction provisions, it becomes harder for landlords to evict tenants without just cause. Having to deal with bad tenants for a long time can be very stressful for landlords and property owners.

What Type of Properties are Included in California Rent Control?

Not all rentals in California are subject to rent control. The law covers all multi-family rental units, but with some exceptions. A competent San Francisco landlord-tenant attorney can help you determine whether a property is exempt from rent control laws.

Furthermore, the local rent control regulations in California permit vacancy decontrol of rent-controlled units, enabling landlords to raise rents to market levels when tenants leave. Types of properties that are exempt from rent control include:

  • Properties constructed in the last 15 years
  • Properties that are already subject to local rent control regulations
  • Single-family homes (unless they are owned by a corporation, real estate trust, or an LLC)
  • Government-subsidized housing (until restrictions expire)
  • Duplexes where one unit is occupied by the owner
  • Short-term rentals like Airbnb
  • College dormitories
  • Mobile homes

Call Our Experienced San Francisco Landlord-Tenant Attorneys Now!

Unfortunately, San Francisco is known for its high cost of living, which is why rent control is of paramount importance. Rent control laws often do more than just limit the rent amount landlords may charge. Some of these laws also restrict the circumstances under which landlords may evict tenants or terminate rental agreements. These rent control regulations are intended to keep living costs affordable for lower-income residents.

The laws of property management and rent control can be quite tricky to navigate. It is common for landlords and rental property owners to become overwhelmed by the details of the rules and regulations. If you have any questions about rent control and concerns about the property you’re managing, it is strongly advised to consult our seasoned San Francisco landlord-tenant lawyers at Steven Adair MacDonald & Partners, P.C.

Our landlord-tenant law firm has been representing landlords and property owners during rent increase disputes in San Francisco and the Bay Area for decades. We have an in-depth understanding of the rent control laws and we will make it work for you. We will fight for you and your rights. Contact our legal team now and schedule an initial consultation.

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