Rent Emergency and Property Rights Package at City Hall

City Hall Proposing Legally Confusing Rent Emergency and Property Rights Package
What’s happening:

San Francisco is considering new rules governing evictions and rent increases

San Francisco officials have announced a package of proposed tenant-protection measures in response to rapidly rising rents and evictions. Several of the proposals directly affect property owners:
- District 9 Supervisor Jackie Fielder's proposed legislation, Evictions for Nonpayment of Rent, would prohibit a landlord from evicting a residential tenant for nonpayment until the unpaid amount reaches the HUD-determined Fair Market Rent (FMR) for a comparable unit. This is a huge, unprecedented change that could profoundly harm property owners, as these numbers are likely not commensurate with actual rental rates.
  
  Under this new ordinance, a tenant paying $1,000 per month for a rent-controlled one-bedroom apartment could owe close to three months’ rent before the federally-imposed threshold of $2,977 is reached and the landlord could begin eviction proceedings. Conversely, a tenant paying $3,500 would reach the $2,977 threshold before owing a full month's rent. The numbers don’t fit the reality and set a constantly variable and confusing precedent for when tenant nonpayment can be used as the basis for eviction.
  
  There is also a relevant open legal question that the California Supreme Court is currently considering with regard to a similar Los Angeles measure. That decision could invalidate San Francisco’s actions here.
- District 3 Supervisor Danny Sauter's proposal would limit the amount of previously postponed, or “banked,” rent increases that can be invoked to 10%.
  
  Under San Francisco's existing system, a landlord who voluntarily decides not to impose annual rent increases can preserve them for potential use later. Why are we capping this right? An owner who delays a rent increase is losing money that will never be recouped and is generally doing so as a kindness to the tenant. To penalize an owner in this way is shortsighted.
- Mayor Lurie’s proposal would increase relocation payments associated with Ellis Act evictions by approximately 25%, or roughly $3,000 per person, according to the San Francisco Chronicle. But San Francisco already has substantial Ellis Act requirements. In 2022, the City enacted an ordinance increasing relocation payments and imposing additional requirements on owners withdrawing property.
  
  So, the relevant question isn't simply whether displaced tenants deserve assistance, but more: how much additional cost should be imposed on an owner exercising a state-law right to make use of their property? And what effect could additional costs have on owners' decisions to remain in or exit the rental business?
  
  Perhaps, if we’re going to raise the allowable amount, we should make that a legal cap, as well.
- The remaining three aspects of this legislative package are the following:
  1. Increases in tenant legal assistance,
  2. $27 million in rental assistance, and
  3. The establishment of a “Know your Rights” campaign to help educate the public on tenant-landlord rights and responsibilities.
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  Dear Mayor Lurie and Members of the Board of Supervisors,
  
  I am writing to address the City's recently-announced package of legislation regarding evictions, rent increases, and tenant protections.
  
  I recognize the seriousness of San Francisco's affordability challenges and the importance of helping residents who are struggling to remain in their homes. At the same time, changes to landlord-tenant law can have significant consequences for both renters and the property owners who provide rental housing.
  
  I would therefore ask the City to carefully consider several issues before proceeding.
  
  First, the proposed Fair Market Rental (FMR) threshold for nonpayment evictions deserves particular scrutiny.
  
  Supervisor Jackie Fielder's legislation, File No. 260962, would prohibit a landlord from evicting a residential tenant for nonpayment when the amount owed is below the HUD Fair Market Rent for a comparable unit. 
  
  The reported 2026 San Francisco FMR is $2,977 for a one-bedroom and $3,604 for a two-bedroom. 
  
  These numbers would rarely correspond to the actual rent amount charged to a particular tenant, which raises an important question: 
  
  Why should the amount of rent that may be unpaid before an eviction proceeding can occur be determined by a federal estimate of market rent rather than the actual rent established by the tenant's lease? This makes little sense.
  
  The issue is particularly significant for tenants paying substantially below-market rents. In such circumstances, the FMR threshold could represent more than one or even two month's actual rent.
  
  The proposal also raises a significant legal question. California's Unlawful Detainer Act governs the state's eviction procedures, and the California Supreme Court is currently considering whether that state law preempts a local ordinance establishing a monetary threshold for unpaid rent. 
  
  Second, the City should not impose a cumulative effect of additional restrictions on rental-property ownership.
  
  I oppose limiting banked rent increases to 10% and increasing Ellis Act relocation payments by approximately 25%. 
  
  The proposal alters the economic and legal framework within which property owners operate.
  
  Property owners remain responsible for mortgages, property taxes, insurance, maintenance, utilities, and capital improvements, regardless of whether rent is collected. The City should therefore evaluate how additional restrictions and costs could affect decisions to maintain, renovate, rent, or sell residential property.
  
  There are two main concerns here:
  
  1. Does changing the rules retroactively or limiting accumulated increases affect owners who made investment and rent-setting decisions under the existing rules?
  2. Will this force owners to raise rents on fixed-income tenants who might otherwise have been given a break?
  
  Note: An owner who delays a rent increase is losing money that will never be recouped and is generally done as a kindness to the tenant. To penalize an owner in this way is shortsighted.)
  
  Third, the City should proceed with caution regarding relocation assistance to the Ellis Act.
  
  Currently under the Ellis Act, relocation assistance already can accumulate to multiple months worth of rent. If the amount an owner must pay to recover their property is increased, perhaps that should also be a legal cap.
  
  San Francisco's housing policies should protect residents facing genuine hardship while maintaining clear, predictable rules for the people who provide housing.
  
  Thank you for considering these questions and concerns.
  
  Sincerely,
  
  
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City Hall Proposing Legally Confusing Rent Emergency and Property Rights Package