SF Supervisors Close Big Rent Control Loophole

by Randy Shaw and Rosamaria Cavalho on May 24, 2018

In a huge victory for tenants primarily living in large apartment buildings, the San Francisco Board of Supervisors voted unanimously this week to close arguably the biggest loophole in the city’s rent law. The loophole allowed steep pass throughs to tenants for a new owner’s higher mortgage and property tax costs, effectively charging tenants with the costs of real estate sales. Sponsored by Supervisor Sandra Lee Fewer with key co-sponsorship  from Supervisor Jeff Sheehy, the legislation boosts the city’s strengthening of tenant protections during the housing crisis.

We raised concern in May 2016 over “SF’s Big Rent Control Loophole.” Now, thanks to the Supervisors, it will soon be closed.

Targeting Low-Income Tenants

This loophole was a particular problem because it often impacted low-impact tenants in the Tenderloin. Among them was Ms. Lan Tran.

Rosamaria first met with Lan Tran in 2014. A petite framed, 4’9, Vietnamese woman, she was bewildered by a recent notice she had received. Her monthly rent was to increase by $60.97.

“But I have rent control! This doesn’t make any sense”, she kept repeating. Many other tenants would later echo her sentiments: What does rent control mean when tenants have to pay extra rent to reimburse their landlord’s mortgage and property tax?

Yet under San Francisco law a Vietnamese senior of 72 years old would have to shoulder the mortgage and property tax expenses of her Landlord’s recent purchase of the building. Fortunately for Ms. Tran, her tightly-fixed income ultimately qualified her for a hardship exemption from paying the increase. But getting that exemption required her to go through an emotionally wearying hearing process in which she had to detail her medical problems to a hearing officer.

And most tenants getting such increases were not on fixed income and could not qualify for a hardship waiver.

A Pro-Tenant Board 

The Board’s 11-0 support for closing the loophole despite strong opposition lobbying reflects the ongoing change in City Hall’s approach to the city’s housing crisis. For decades the “progressive” and “moderate” split came down to support for tenant issues. But tenant legislation is routinely getting a super-majority of votes, with so-called “moderates” consistently voting with tenants.

Many supervisors now recognize that being “pro-housing” means pushing the city to both build more housing and strengthen tenant and rental housing protections. Mayor Ed Lee helped build this new consensus, which was reflected in this week’s unanimous vote.

San Francisco is an expensive city, but its elected officials are doing what they can to increase affordability.

Randy Shaw is the Editor of Beyond Chron and Director of the Tenderloin Housing Clinic. Rosamaria Cavalho is a community organizer for THC.

Filed under: San Francisco News

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