Capital
Improvement Rent Increases
2000's
Proposition H, passed by the voters in November, 2000, eliminated all
capital improvement rent increases except for:
•Capital
improvements for seismic retrofit work.
•Capital
improvements where a landlord can show that the rent increase is necessary
to provide them a "fair rate of return" on their investment (a legal standard
which landlords would find diffiuclt to meet in San Francisco given the
high rents and property values here).
Proposition
H was retroactive to April 10, 2000, meaning that any capital improvement
rent increases approved by the Rent Board after that date are ended and
landlords must refund tenants any amount paid.
HOWEVER....
COURT
ISSUES INJUNCTION AGAINST PROP H
• The real
estate industry has sued to overturn Prop H and while it appears that ultimately
the measure will be found legal, Superior Court has issued an injunction
against the measure which means that currently (through May 24, 2001),
tenants must continue to pay any previously approved Capital Improvement
rent increases (even if approved after 4/10/2000). If and when Prop H is
upheld, any such rent increases must be refunded to the tenants. If
tenants do not pay them, however, landlords can try to evict for nonpayment.
The court injunction will be reviewed (and may be lifted) on 5/24/01.
NO
NEW CI RENT INCREASES BEING APPROVED
•
The Board of Supervisors passed an ordinance prohibiting the Rent Board
from processing or approving any new capital improvement rent increases
while the court case (above) on its legality is pending. This moratorium
took effect on April 1, 2001. As of that date, the rent Board is neither
issuing new rent increases (for petitions which were already filed and/or
hearings held but no decvision issued as of 4/1) or holding hearings on
any new capital impropvement rent increase petitions. Landlords can file
CI petitions and tenants can file appeals of previously issued opinions,
but the Board can not act on them other than to file them away.