As of March 1, 2025, the San Francisco Rent Board has announced a 1.4% allowable rent increase cap for the 2025–2026 period. This rate applies to most rent-controlled residential units in the City and County of San Francisco under the San Francisco Rent Ordinance. While this percentage might seem small, it has significant implications for landlords navigating rent control, annual rent increases, eviction protections, and capital improvement rent increases across San Francisco’s complex rental landscape.
If you’re a property owner, understanding San Francisco’s rent increase rules, the annual allowable rent increase, and when additional petitions (like the Operating and Maintenance Expense Petition) apply is essential to maintaining compliance and protecting your investment.
Key Takeaways
The 2025–2026 allowable rent increase is capped at 1.4%, effective March 1, 2025, through February 28, 2026.
Only rental units covered by rent control in San Francisco are subject to this limit.
State law AB 1482 also imposes separate rent caps for certain non-rent-controlled properties.
Landlords may request additional rent increases through capital improvement petitions with the Rent Board.
Understanding your property’s classification—whether it’s a single-family home, condominium, or multi-unit dwelling—is crucial for compliance.
Understanding Rent Control in San Francisco
The San Francisco Rent Ordinance, administered by the San Francisco Rent Board, governs how much landlords can increase the rent each year for most residential units built before June 13, 1979. These properties are considered rent-controlled and must follow the annual allowable increase set by the Rent Board, which is tied to the Consumer Price Index (CPI).
However, not all properties are covered by rent control. Single-family homes, condominiums, newer buildings, and certain non-profit cooperatives may be exempt from the Rent Ordinance, though they could still fall under state rent control laws such as AB 1482, which limits annual rent increases to 5% plus CPI (up to 10%).
For landlords, it’s critical to determine whether your rental unit is covered by local rent control, state rent control, or is exempt entirely.
The Role of the San Francisco Rent Board
The San Francisco Rent Board enforces the Rent Ordinance and handles disputes, petitions, and appeals involving landlords and tenants. Property owners can find the annual allowable rent increase percentage, guidance on banked increases, and rent board fee details on the Rent Board website.
Each rental unit covered by the Rent Ordinance is also subject to an annual Rent Board fee, which is shared between the tenant and landlord—typically split 50/50. Failure to pay or properly allocate this annual fee may result in administrative penalties or unlawful rent increase claims.
How Annual Rent Increases Are Calculated
For the 2025–2026 period, landlords may increase rent by 1.4% on the tenant’s base rent, provided that at least 12 months have passed since the last increase. This percentage is applied to the tenant’s base rent, not including additional charges such as parking or storage space fees unless those are specifically listed as part of the rental agreement.
Here’s how it typically works:
Determine the tenant’s base rent (the lawful rent charged at the start of tenancy or after the last increase).
Multiply by 1.4% (the allowable increase).
Add the resulting amount to establish the new lawful rent.
Example:
If a tenant’s base rent is $3,000, a 1.4% allowable increase means you may legally increase rent by $42, bringing the new monthly rent to $3,042.
Be sure to provide proper written notice of any rent increase, typically 30 days in advance for increases under 10%.
Annual Rent Increases vs. Capital Improvement Rent Increases
In addition to the annual allowable increase, landlords may petition the Rent Board for capital improvement rent increases if they have made significant property upgrades—such as roof replacements, seismic retrofits, or plumbing system updates—that enhance the property’s value or safety.
This process, known as a capital improvement passthrough, allows landlords to recover a portion of their capital improvement costs from tenants over time. However, strict proof of costs, tenant notification, and Rent Board approval are required. Unauthorized increases without Rent Board authorization can be deemed an illegal rent increase.
Operating and Maintenance Expense Petition
Landlords may also file an Operating and Maintenance Expense Petition with the Rent Board when they can show that maintenance costs or operating expenses have increased beyond normal inflation levels. This petition, if approved, permits an additional rent increase beyond the annual allowable cap.
Keep in mind that petitions must include detailed documentation—such as invoices, utility bills, or tax assessments—and are closely reviewed to ensure costs are legitimate and necessary.
Eviction Protections and Just Cause Rules
Under San Francisco’s Rent Ordinance, tenants enjoy strong eviction protections. Landlords can only evict tenants for just cause, such as:
Nonpayment of rent
Violation of the lease
Owner move-in or relative move-in
Ellis Act evictions (withdrawing the unit from the rental market)
Unlawful or no-fault evictions can expose landlords to financial penalties and legal disputes. Even when a just cause eviction is valid, landlords must provide written notice and, depending on the tenant’s circumstances, sometimes relocation assistance payments.
Special Considerations for Single-Family Homes and In-Law Units
While single-family homes and condominiums are generally not covered by San Francisco’s Rent Ordinance, they may still fall under state rent control (AB 1482) if they are not owner-occupied or held in a trust or corporation.
Additionally, in-law units or accessory dwelling units (ADUs) can have complex classifications depending on the date of construction and ownership structure. Always review your property’s exemption status before applying any rent increase.
Avoiding Illegal Rent Increases
Implementing an unlawful rent increase can lead to Rent Board penalties, tenant claims, and possible small claims court actions. To stay compliant:
Verify your rental unit’s coverage under local or state rent control.
Follow notice requirements carefully.
Reference the Rent Board website for official forms and annual allowable increase data.
Maintain detailed records of base rent, banked increases, and petitions.
If in doubt, property owners should consult a property management expert like Kenny Realty, which specializes in navigating San Francisco’s rental landscape and ensuring compliance with all city and state laws.
Frequently Asked Questions
1. Does the 1.4% cap apply to all rental units in San Francisco?
No. The cap applies to rent-controlled units under the San Francisco Rent Ordinance, typically built before June 13, 1979. Newer buildings, single-family homes, and condos may instead fall under AB 1482, or may be fully exempt.
2. Can landlords “bank” unused rent increases?
Yes, landlords may bank unused annual increases and apply them later, but the total increase at one time cannot exceed 10% and must comply with notice requirements.
3. How does AB 1482 affect rent increases?
AB 1482, the California Tenant Protection Act, limits rent increases for most non-rent-controlled properties to 5% plus CPI, with a total cap of 10% per year. However, new buildings (less than 15 years old) and certain owner-occupied properties are exempt.
Navigating Rent Control with Kenny Realty
The 1.4% allowable rent increase cap for 2025–2026 highlights how San Francisco’s rent control system continues to prioritize tenant protections while placing limitations on landlords’ rent adjustments. As maintenance costs and inflation rise, these restrictions can make property management increasingly complex.
At Kenny Realty, we help property owners across the San Francisco Peninsula, Bay Area, and surrounding communities stay compliant with rent control laws, eviction protections, and lease regulations. Our expert team ensures that every rental unit is managed efficiently, legally, and profitably.
For personalized guidance on rent increases, capital improvement petitions, and tenant management, contact us at Kenny Realty — your trusted partner in property management and real estate services across San Francisco’s rental market.
Evan has been in the real estate and property management field for 6+ years. He is experienced in working with first time home buyers, is an Accredited Buyer’s Representative (ABR®), Seller Representative Specialist® (SRS) and Seniors Real Estate Specialist®(SRES®). He also works closely with Kenny Realty owners, getting their rental properties rented as quickly as possible. Evan is responsible for monitoring rental market conditions and advising our owners on market rates. He has outstanding communication with all clients he works with, keeping everyone in the loop at all times. He is the third generation of the Kenny family to practice property management on the peninsula.