The News

Who’s Counting?

Rental property owners will soon need to report rental and vacancy data to the city.

Editor’s Note: State and federal guidelines and legislation are constantly changing regarding COVID-19. For the latest information, resources, financial aid, and forms, visit www.sfaa.org or www.caanet.org/coronavirus.

Housing Inventory Data Collection
In December of 2020, the San Francisco Board of Supervisors passed a rent ordinance amendment that will require unit registration and licensing. The Rent Board will be developing a form to use for this mandatory reporting. This is major legislation that will impact the industry in many ways. In particular, we will now have an accurate measurement of citywide vacancy rates and rent prices. Moreover, should vacancy control ever pass, the city will now have an infrastructure in place to determine future rents for vacated units.

The San Francisco Board of Supervisors unanimously approved this legislation. According to Board President Norman Yee, “We simply need more information and data. In order for us to address the housing shortage, we have to better understand the number of units we have available so we can plan ahead.”

Owners shall report the following information under penalty of perjury for each rental unit that is rented: (i) the name and business contact information (address, phone number, email address) of the owner or property manager; (ii) the business registration number for the unit; (iii) the approximate square footage of the unit, as well as the number of bedrooms and bathrooms in the unit; (iv) whether the unit is vacant or occupied, and the date when the last vacancy occurred or the current occupancy commenced; (v) the start and end dates of any other vacancies or occupancies that have occurred in the previous 12 months; (vi) the base rent for the unit in $250 increments, and whether the base rent includes utilities (water/sewer, refuse/recycling, natural gas, electricity, etc.); and (vii) “any other information” that the Rent Board deems appropriate. For owner-occupied units, you must report that the unit is owner-occupied but need not report anything further.

Only owners who have substantially complied with these reporting laws shall receive a license and business registration number. Without a license, a landlord may not impose rent increases. The Rent Board annual fee assessed against every rental unit shall be appropriately increased to include the costs associated with administering this new program. The Rent Board Commission will begin meeting to discuss what “other information” should be required early in 2021, so stay tuned for more excitement! SFAA will be offering classes in 2021 on how to comply with this new law. You will receive announcements about upcoming Rent Board meetings where the public may voice input concerning what other information ought to be included in the annual reporting.

The cost to run this program will be funded by an annual $50 Rent Board fee (split between landlords and tenants). The Rent Board will hire new staff and develop an online reporting system.

“We have loads of considerations in regard to the ordinance,” said Charley Goss of the San Francisco Apartment Association.

“Disclosing which tenants pay what, when all tenants stay underneath the identical roof, sort of sows what we name lease animosity,” he said.

Be sure to check next month’s issue of SF Apartment Magazine for more details about this legislation, what it means for rental property owners, and how to comply.

Commercial Eviction Moratorium
In December, the San Francisco Board of Supervisors unanimously approved commercial eviction moratorium legislation, which will go in effect once Mayor Breed signs the ordinance. This new legislation will terminate the Mayor’s previous executive order.

The ordinance will apply to commercial tenants with a combined worldwide 2019 gross receipts of $25 million or less. Office tenants—with the exception of non-profit office workers—are not protected.

First, landlord and tenants are encouraged to negotiate new terms for leases. If an agreement cannot be reached, tenants (classified in four tiers) can defer rent without penalty. Tier classifications and details are as follows:

• Tier 1 tenants: Tenants with 10 full-time employees or fewer can defer rent up to two years before repayment. These tenants will also have the right to end lease contracts without penalty with 30-days’ notice if they pay rent through the remaining period.
• Tier 2 tenants: Tenants with 10 to 24 full-time employees can defer rent up to 18 months before repayment.
• Tier 3 tenants: Tenants with 25-49 full-time employees can defer rent up to 12 months before repayment.
• Tier 4 tenants: Tenants with more than 50 full-time employees can defer rent before repayment when the Moratorium Period ends.

Landlords who own less than 25,000 square feet of commercial space can apply for a waiver through the Mayor’s Office of Economic and Workforce Development, if they can prove that “being unable to evict would cause a significant financial hardship.”

Smoking Ban Reversal
One week after approving legislation to ban the smoking of tobacco in apartment buildings of three or more units, the Board of Supervisors reversed course, and sent the proposal back to committee for further consideration. The ban does not prohibit cannabis use.

Board President Norman Yee wrote the legislation, explaining, “One should not have to live in a single-family home to be able to breathe clean air. That right should exist for every single person and family, regardless of where they live or what their income is.”

Cannabis activists rallied against including cannabis in the ban because under state law, it is illegal to smoke cannabis in public, making inside private residences the only legal option.

Enforcement will come from the Department of Public Health and repeat offenders could face fines up to $1,000 a day, however, they cannot be evicted.

The proposal will be considered again in 2021.

San Francisco Human Services Agency
The San Francisco Human Services Agency (SFHSA) is looking to expand its pool of local San Francisco landlords to which it can refer potential tenants.

SFHSA provides short term rental assistance to eligible San Francisco residents who are unable to safely return to their homes following a fire.

For eligible impacted fire victims, the rental subsidy can provide a time-limited subsidy to cover the difference between their former rent and the current market rate of a similar unit. The city rental subsidy portion is paid directly to the landlord. In addition, the person(s) is also provided with additional assistance and supportive services.

For more information, please contact Ben Amyes at the Human Services Agency Fire Response Rental Assistance Program at (415) 557-5370 or [email protected].

Message from the Assessor Recorder on Prop. 19
Property taxes are primarily governed by state laws, and California voters passed Proposition 19 last year, which will soon make changes to property tax benefits for families, seniors, severely disabled persons, and victims of natural disaster in our state. In response, the San Francisco Assessor’s Office has consolidated resources, including video tutorials, frequently asked questions, forms and reference links, for families who may need help in understanding the changes and preparing for their financial futures. Visit SFAssessor.org/Prop19 today to learn more about the topic and see how may this new law may affect you.

What is Prop. 19? Proposition 19 (2020) is an amendment to the California Constitution that essentially changes two existing statewide property tax saving programs. First, it will limit parent-and-child transfer and grandparent-to-grandchild transfer exclusions (Current Prop. 58/193), mainly by removing reassessment exclusion on properties other than primary residences after transferring to parents, children, or grandchildren. This part of the law will go into effect on February 16, 2021. At the same time, Prop. 19 will also expand senior replacement home transfers (Current Prop. 60/90 programs), which would allow assessment transfers up to three times and replacement property to be of any value (may be incremental increases in taxable value) and anywhere in the State.  This part of the law will take place on April 1, 2021.

Sound complicated? To provide families with the necessary tools to continue financial planning with the new law on the horizon, we are organizing an online event in January and in Spring as part of our Digital Family Wealth Forum series to answer your questions. Visit SFAssessor.org/FamilyWealthForum today to register.

SFAA Updates
The SFAA hosted its first-ever virtual STARS Awards event on December 10. During the virtual event, SFAA celebrated members of the housing industry who inspired us with their exceptional work during this tumultuous year. Thank you for all that you do!

And a special thank you to the gold and silver sponsors (see page 35).

Check back in the next issue (February 2021) for a full list of award recipients and a full recap of the event. As SFAA pivots to provide you services during the pandemic, there is a new way to connect with SFAA. Email [email protected] to have your questions and concerns promptly addressed. While the SFAA office is closed, SFAA staff is working round-the-clock to keep the nonprofit running. Timely payment of membership dues is necessary to help the association help you.

SFAA classes will be available online during shelter-in-place. The San Francisco Apartment Association is happy to announce that current CCRM students can continue their education during the pandemic right from home. We understand keeping up with education is crucial and want to assist our members to stay up to date. Thus we will be setting up more webinars in the future. See the calendar on page 42 for a full list of classes.