The “Tenant Protections Ordinance,” (Ord. 171-15), dubbed “Kim 2.0” after its main sponsor

Supervisor Jane Kim became effective on Nov. 9, 2015. While the new law made its intent clear, the details of its implementation were left to the Rent Board. At its November 10, 2015 meeting, the Rent Board decided that the law’s non-relative roommates’ provision would be applicable to existing leases (i.e., retroactively).  

Due to the urgency of the matter, and the fact that our regular meeting was scheduled for the same evening, we cancelled it so our members could go to provide public comments at the Rent Board. We zeroed in on two main points: 1) that the roommates’ provision should be applied to new tenancies beginning only after the date the law went into effect; and 2) that the rules and regulations should specify that the roommate application process not require that landlords waive their rights under the state Costa-Hawkins law.

About 160 SPOSFI members attended the lengthy Rent Board session, emphasizing the illogic of allowing long-term tenants to bring in multiple roommates, and especially, of rendering provisions of existing lease agreements null and void. 

Implications of the New Roommate Provision

Applying the provision allowing additional roommates to existing leases means, for example, that a single long-term tenant paying $1,000 for a two-bedroom apartment, can take in up to three additional roommates plus still more roommates if a dining room, living room, or den meet the legal criteria of a bedroom. 

How Much Can the Master Tenant Charge?

According to the law, a master tenant may not charge a roommate (“subtenant”) more rent than that which he/she is currently paying to the landlord. Nor can the master tenant charge any subtenant more than a proportional share of the total rent the master tenant pays to the landlord. 

What Are “Legal Bedrooms” Per Kim 2.0?

  •         The first bedroom must be at least 120 square feet.
  •          If your first bedroom is at least 120 square feet (e.g., 10’x12’), you can call another room a   bedroom if it’s  at least 70 square feet, with at least 7 feet on a side.
  •          Required natural light and air: 8% of floor area of natural light, and 4% of floor area of air (operable window). Traditional double-hung windows, found in nearly all older San Francisco buildings fulfill both requirements, because when open, they provide half the air as natural light.
  •         A minimum clear headroom of 7’-6.”
  •         Two means of egress. One may be a window. If the second is a window, Fire Department regulations require minimum area for personnel access of width 20,” minimum height 24”, with a net clear opening of 5.7 square feet In the example above, with four occupants, a master tenant and three roommates, the monthly rent per person would be $250 ($1,000 ÷ 4).  

But does anyone really believe that the master tenant is going to charge the new roommate only $250 per month? No way! It’s far more likely that the master tenant, seeking to minimize his/her own rent, or even make a tidy profit, will charge disproportionately more, even market rent, no matter what the law says. A roommate is a “subtenant” and pays rent directly to the master tenant. Master tenants will certainly not reveal what they themselves are paying the landlord, and so may well charge $1,500 for a bedroom.

Without subtenants knowing what the actual rent is, and with good reason for them not to ask questions, Kim 2.0 now gives long-term tenants a big financial incentive to build a small rental business of their own – at the owner’s expense. And don’t hold your breath waiting for the Rent Board to enforce the provision that limits what a master tenant can charge subtenants. 

What is the Impact of This Legislation?

This legislation adds yet another item to the long list of unreasonable legislation slowly driving San Francisco’s small housing providers out of business. Landlords renting their units at market rate can set the price high enough to mitigate some of the additional costs incurred with multiple roommates. But those with long term tenants – often paying a fraction of market rent – are unable to absorb the added costs incurred with additional occupants without further hardships. With unprofitable rental properties that don’t even meet basic expenses and cost of upkeep, property owners will increasingly invoke the Ellis Act to get out of the rental business. 

Reprinted with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News.  For more information on becoming a member of SPOSFI or to send a tax-deductible donation, please visit their website at www.smallprop.org or call (415) 647-2419.