Shall the City's Rent Control Ordinance be amended to limit the types of costs on which a landlord may base a rent increase?
This ordinance would amend current rent control law to prohibit rent increases based on costs for capital improvements, rehabilitation work, or energy conservation measures. Certified costs of seismic work could be passed through, in an amount not to exceed 5% of a tenant's base rent in any 12 month period, and spread over 20 years. Landlords would have to refund any rent increases for costs of other capital improvements or rehabilitation work certified after April 10, 2000.
Presently under San Francisco's rent control ordinance, a residential landlord may add or "pass-through" certain costs to increase a tenat's rent, if those costs have been certified by the Rent Board. Such costs include capital improvements, rehabilitation work, energy conservation measures and certain property tax increases. A landlord also may increase the rent based on other costs allowed by the Rent Board, such as additional operating and maintenance expenses.
This ordinance would also eliminate pass-through of costs for removal of lead hazards and limit allowable rent increases due to additional operating and maintenance costs to 7%.
Proposition H would provide that a landlord could not be denied a rent increase for capital improvements, rehabilitation work or energy conservation measures if that denial would deprive the landlord of a constitutionally-required fair return on the property.
Also, Proposition H would require that the voters approve any pass-through of property tax increases from future bond measures.
Should the proposed ordinance be adopted, in my opinion, it would have no impact on the City's General Fund, but it would likely reduce the administrative responsibilites and costs of the fee-supported Rent Board.
- Summary of Arguments FOR Proposition H:
- This ordinance would help many low income and limited income renters who are being forced out by pass-through rent increases.
San Francisco already has a severe housing shortage, tenants are being displaced through these excessive rent increases, making the housing crisis even more severe.
The current system is unfair since tenants pay 100% of capital maintenance costs.
The scarcity of affordable housing forces many working people out of San Francisco meaning longer commutes and more traffic.
- Summary of Arguments AGAINST Proposition H:
- This ordinance would deny property owners, including many small property owners the ability to maintain their properties.
Taking away a small landlord's right to recover sensible, documented maintenance gives an owner more incentive to get out of the rental market.
Currently, hardship exemptions are available to all tenants who cannot afford to pay when they are faced with rent increases.
Proposition H would provide a disincentive to rental property owners to keep up their buildings, resulting in poorly maintained buildings, neighborhood eyesores and stifled property values, thus hurting our entire community.
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