How well do you understand San Francisco’s complex rent control laws?
This is a challenging topic even for experienced landlords and real estate investors. But, at Sharevest Property Management, we are experts in San Francisco property management, and that means it’s our job to stay up to date on the latest laws, limits, and legislation when it comes to rent control.
We’ve put together a rent control guide that will help you navigate the laws, understand the Rent Control Board, and establish a rent that’s fair, competitive, and still profitable.
Here’s what you need to know.
Rent Control Summary:
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San Francisco’s Rent Board and Its Rent Control Guidance
Rent control laws in San Francisco start with The Rent Board. By establishing contact and creating a good relationship with The Rent Board, we have found there’s less anxiety and guesswork around rental increases and what’s allowed. We follow the guidance of the Board, which tells owners exactly how much they can raise their rent from year to year.
What else do we like about working with and following The Rent Board? They provide many other resources. We look to them when we’re thinking about habitability, security deposit interest, and any upcoming referendums that impact rental properties throughout San Francisco.
In San Francisco, the Rent Board regulates how much landlords can increase rent on rental properties subject to rent control, which covers most buildings constructed before June 13, 1979. The primary mechanism for determining annual rent increases is based on the Annual Rent Increase set by the San Francisco Rent Ordinance, which uses the Consumer Price Index (CPI) to calculate allowable rent hikes.
Each year, the Rent Board publishes the allowable rent increase percentage for residential properties under rent control. This percentage is tied to the CPI for the San Francisco-Oakland-San Jose area, which measures inflation and the cost of living. Specifically, the Rent Board uses the percentage increase in the CPI from the previous year to establish how much rent can be raised. The allowable rent increase is capped at a maximum percentage, which is published annually, ensuring that rent hikes remain within reasonable limits.
It’s also important to note that landlords must follow proper notice procedures before raising rent. For example, in rent-controlled units, landlords must provide tenants with written notice of the rent increase, typically 30 to 60 days in advance, depending on the amount of the increase.
Additionally, there are certain limits and exemptions to rent increases. For example, if a tenant has lived in a unit for a long period, they may be more protected from large rent increases, and certain types of housing (such as government-subsidized or new construction properties) may not be subject to these controls at all.
The Rent Board establishes the allowable rent increase based on the CPI, providing a structured framework that limits how much landlords can raise rents in rent-controlled units, ensuring affordability while still allowing for adjustments tied to inflation.
What is the Rent Control Law in San Francisco?
California has statewide rent control, but San Francisco’s rent control (Rent Stabilization) law takes precedence locally. Under the San Francisco Rent Ordinance, a landlord can only increase a tenant’s rent by a certain percentage once every 12 months
Under the city’s Rent Ordinance, annual rent increases are limited to a CPI-based percentage. Right now, the limit for March 2025 to Feb 2026 is 1.4%. The rules for 2026 will depend on the new CPI announcement in late 2025. This law also requires “just cause” for eviction, and it covers older buildings but exempts single-family homes, condos, and newer construction.
Here are some important things to know about the law:
- A San Francisco landlord must get a rent increase license before imposing annual allowable and/or banked rent increases on a tenant, and to get a rent increase license, a landlord must first report into the Rent Board Housing Inventory.
- Landlords must use the tenant’s base rent only to calculate the rent increase. This does not include any temporary or fluctuating charges such as utilities that may be covered, or extra services that are not part of rent.
- Rent increases cannot be rounded up to the nearest dollar.
- Timing requires attention. A landlord can make the first annual increase 12 months after the date the tenant’s lease began, and then after a landlord has increased a tenant’s rent, the date of the increase becomes known as the tenant’s “anniversary date.” The landlord cannot increase the rent again until at least 12 months later.
- A landlord that does not increase a tenant’s rent on their anniversary date, can save (or “bank”) the increase and add it later. Still, only one increase is permitted in the 12-month period.
- A landlord must give a tenant adequate notice. Provide a 30-day written notice of the proposed rent increase and a 90-day written notice if the increase is more than 10%. If the notice is mailed, the landlord must give the tenant 5 more days. The rent increase notice should include the dollar amount of the increase, the percentage amount of the increase, and the date the increase will go into effect.
The communication of your rental increase is important, so make sure you’re clear on what the increase will be and when it will go into effect. Reach out to us if there’s any confusion, and we’ll help with the notice.
How Can You Raise Your Rent With Rent Control Laws in Place?
Rent control in San Francisco doesn’t mean landlords can’t raise rents. It just means that any increases must follow specific rules set by the San Francisco Rent Board. While rent increases are allowed and even expected, they are regulated to ensure affordability for tenants and prevent excessive increases that could lead to displacement.
- Set an Accurate and Profitable Rent Initially
Here’s one important thing to remember: there is no limit on what you charge in rent when a vacant unit is for rent. That’s why it’s so important to set your initial rent at a market rate. You won’t be able to raise it without restrictions again until a tenant vacates and the rental property is vacant again.
- Apply for a Higher Increase
Another important point to remember: if you can demonstrate that your operating costs have increased (such as rising maintenance expenses or higher utility costs), you may be able to petition for a higher rent increase. To do so, you’ll need to provide documented evidence of these increased expenses. The Rent Board will examine your evidence and make a judgment about whether your increase for a particular property can justifiably be higher.
- Make Sure You’re Not Exempt
Before you get too involved in raising your rent within the limits of the rent control law, make sure your property is not exempt.
- Luxury units
- Single-family homes
- Condos
- New construction buildings
All of these could potentially be exempt from rent control regulations. If you’re not sure, ask. Ask the Rent Board or reach out to us.
- Get Professional Help When Raising Rents
If there’s any doubt at all about what you’re doing and whether it’s lawful, get help from a San Francisco property management team or a legal expert. Especially when it’s time to raise the rent on existing tenants. Navigating rent control can be tricky, but we’re here to help you manage it effectively. We’ll analyze the local rental market, assess what your competitors are charging, and help you determine the appropriate rent increase for your property when it’s time for lease renewal. With our expertise, we’ve helped property owners like you successfully negotiate with tenants, and our retention rates speak for themselves.
If you’re unsure about how rent control applies to your San Francisco investment, reach out to us. We’ll guide you through the process and answer key questions, including:
- Is your property subject to local or state rent control?
- How to determine the fair rental value of your property
- How much of a rent increase is permitted by the Rent Board
- What steps you can take to increase the value of your property
- The connection between just cause evictions and rent control in San Francisco
Raising the rent requires confidence, legal exactitude, and a clear communication strategy with your tenants.
Staying up to date with rent control laws in San Francisco is important to ensure compliance and avoid costly mistakes. The city’s regulations can change frequently, and failing to follow the latest rules could result in fines or legal issues. To keep informed, regularly check the San Francisco Rent Board’s website for updates, attend local landlord association meetings, and consult with property management professionals like us, who specialize in San Francisco’s unique rent control laws. Staying proactive helps protect your investment.
Please contact us at Sharevest Property Management with any questions about rent control.
