The 1995 Costa bill was a real estate industry-backed attack on rent control. Most notably it eliminated vacancy rent controls (where rent increases on empty apartments are limited) across the state. In San Francisco (which did not have vacancy control), the main impact of Costa has been the provisions which scale back rent control in roommate households and in rented out single family homes and condominiums. (Not unimportant, though, Costa does prohibit San Francisco from adopting wholesale vacancy rent control and another section prohibits San Francisco from extending rent control to so-called new construction, defined as buildings built since 1979).

In San Francisco's expensive and tight housing market, pretty much the only affordable housing which can be found comes by moving into a long-term rent controlled household. Because people have to double and triple up to afford the rents here, San Francisco has more roommate households than any other city, with an average of 2.9 people per rental unit (this is up from 2.1 in 1990).

These roommate households are not just stereotypical single students and young people but include couples and families and every age group all the way up to seniors.

These households are generally stable and ongoing but over time may have some roommates move out and others move in to replace them. Landlords initially sought to raise rents on households whenever roommates changed but this practice was found top be a violation of the rent ordinance, which allows unlimited rent increases only upon a total vacancy.

Responding to landlord complaints, in the early '90s the Rent Board adopted rule 6.14 which outlined a process by which a landlord could give new roommates a so-called 6.14 notice which declared that a tenant was not an "original" tenant and that the landlord could raise the rent by any amount when there were no longer any such "original" tenants left. The regulation also said that if the landlord failed to give a new roommate a 6.14 notice within 60 days then that tenant automatically became an "original" tenant and entitled to the rent controlled rent.

While this was an imperfect solution which both tenants and landlord complained about, it at least gave landlords an option to eventually raise the rent and it at least gave new roommates a chance to acquire the original rent.

With Costa, though, these rules changed. Costa simply says that any sub-tenants or assignees (e.g. roommates who pay rent to another tenant) who move in on or after January 1, 1996 are not entitled to the rent controlled rent (regardless of any action or inaction by the landlord) when they are the only tenants left in the unit. Costa, though, does not give landlords this same right to raise rents on co-tenants.

Since Costa took effect in January of 1996, the Rent Board has essentially been following what Costa says for roommates who move in on or after January 1, 1996: landlords were still required to give co-tenants who moved in a 6.14 notice or the tenant would get the rent controlled rent; landlords, however, were not required to give sub-tenants or assignees a 6.14 notice.

In adopting its new regulations the Rent Board, as it has a tendency to do, took the pro-landlord Costa Bill and made it slightly more pro-landlord (and made it a lot more confusing).

Generally, the regulations define 3 categories of tenants, based on when they move in and whether or not they are sub-tenants or co-tenants (which in rule 6.14 only are now called respectively "not co-occupants" or "co-occupants").

Anybody who moved in before 1/1/96 (whether they are sub-tenants or co-tenants or "not-co-occupants" or "co-occupants" (or whatever new term is dreamed up)-The old rules apply; landlord has to give written 6.14 notice within a reasonable time (60 days is presumed reasonable) or can raise their rent when all so-called "original" tenants move out..

Co-Tenants/Co-Occupants who moved in on or after 1/1/96: Any tenants whose agreement is directly with the landlord (i.e., a co-tenant, not a sub-tenant) generally have the old rules still apply_landlord must notify them in 60 days that they are not an "original" tenant and landlord can raise their rent when all such "original" tenants move out.

Sub-tenants/Not-Co-Occupants who moved in on or after 1/1/96: Landlord can raise their rent when all "original" tenants have moved regardless of giving a 6.14 notice unless the landlord has affirmatively told them that the rent wouldn't be raised or if the landlord fails to raise the rent within 90 days of the "original" tenant moving out or if the landlord is told in writing that the new roommate was moving in and then accepted rent and then did not notify the new roommate within 90 days that the roommates rent could be increased when the "original" tenant moved out.

Unspecified in the new 6.14 regulation but included in Costa (and 6.14 does incorporate all of Costa in it) is a provision that the landlord does not get to raise the rent in any of the post-1996 scenarios above if the unit has outstanding code violations which have gone uncorrected for 60 or more days.

Costa Raises Issue of How Legal 6.14 Is For Co-Tenants

Interestingly, Costa raises the question of how legal the whole 6.14 regulation is for co-tenants (and has been for everybody). The Rent Board can only pass regulations which interpret the rent ordinance or which interpret state or federal law. The rent ordinance, though, has no provision allowing landlords to raise rents on an ongoing tenancy because roommates have changed. And the rent ordinance certainly has no provision allowing such rent increases automatically and without a hearing first.

Now Costa has come into law which specifically gives the right to landlords to raise rents in such changing-roommate situations but only to sub-tenants and assignees. The Rent Board's 6.14 regulation allowing for such increases to sub-tenants and co-tenants clearly goes beyond Costa.

A 6.14 increase given to a co-tenant pursuant to the regulation thus has no basis in the rent ordinance and is specifically not allowed under state law. Co-tenants in such a position would be wise to challenge any such increases as being illegal in that the Rent Board has no power to pass regulations allowing for such an increase.