Based on this analysis, renters could expect their annual charges from bond passthroughs to vary either upward or downward based on factors which impact each year's applicable tax rate. The San Francisco Rent Stabilization Board states that approximately 180,000 residential units are under rent control, and annual rent increases for these units are limited to a maximum of 7 percent, depending upon the increase in the Consumer Price Index. According to the San Francisco Chamber of Commerce, two out of three housing structures in San Francisco are multifamily units, with renters occupying approximately 65 to 70 percent of the City's housing units. Therefore, any changes to the City's rent prices could affect a substantial number of tenants. Current law requires landlords to file petitions in order to impose rent increases for capital improvements or operating and maintenance expenses.
Tenants can also dispute any rent increases they perceive to exceed allowable limits.
The proposed ordinance would provide landlords a second mechanism by which to impose increases based on property taxes from voter-approved general obligation bond issues. These costs could be imposed directly on tenants without the requirement for landlords to file petitions before the Rent Board, although tenants could still dispute any excessive charges. This means that landlords may conceivably impose costs in excess of 7 percent within the same tax year if they imposed both increases. Even though it is unlikely that this increase would exceed 9 percent of the rent - based on current bond information, the Rent Board could consider limiting these annual allowable rent increases by requiring that landlords who impose the bond passthrough and file petitions for operating and maintenance expenses, do not exceed the 7 percent rent limitation. Allowing landlords to impose property tax passthroughs directly, eliminates some of the controls that are currently built into the City's Rent Control Law, and are intended to curb any rent increases that exceed the Rent Board's guidelines.