San Francisco’s rents are up 21 percent year-over-year and breaking records: The median cost for a one-bedroom is now $4,000 for the first time in city history.
But those sky-high rents aren’t even the full story. Some tenants are shocked to discover that a new rental comes with hundreds of dollars of additional fees — for things like pest control or garbage — that aren’t included in the rent they were quoted. Supervisor Bilal Mahmood is hoping to change that.
Mahmood said Thursday that he is introducing legislation to force landlords to disclose all the hidden fees paid by city tenants. Those costs can stack up: according to an analysis done by the Urban Institute Initiative, fees can increase renters’ total monthly costs by 10 to 30 percent.
Mahmood’s legislation would require apartment listings on websites like Craigslist or Zillow to show an estimated all-in monthly cost. Landlords would be required to list all the monthly fees they charge in the lease agreement.
If a tenant can prove that a fee was not disclosed to them, that tenant would not be able to be evicted for not paying it.
The legislation would also allow tenants to terminate a lease without any penalties if a landlord fails to disclose a fee properly.
“Junk fees are a major obstacle to housing stability. They blindside renters who have already very stretched, tight budgets,” said Ora Prochovnick, director of litigation and policy at the Eviction Defense Collaborative, who worked with Mahmood on the law.
Sometimes, Prochovnick said, renters do not know they are on the hook for these fees and end up underpaying their landlord and getting evicted.
The legislation mirrors similar requirements for all-in pricing of airplane tickets and hotels, as well as the more recent push for transparent pricing on event ticketing sites like Ticketmaster.
Mahmood will officially introduce the legislation on June 9, and is hoping to have it heard by the Board of Supervisors some time in July.
Mahmood said that he sees the legislation as part of his work on housing affordability.
His other proposals include a ban on using shadows cast by a building to block the construction of new housing, and a cut on transfer taxes for buildings worth more than $10 million. Both are pending passage at the Board of Supervisors.
“That’s going to build housing five, 10 years down the road,” Mahmood said, “but we still have to help people today.”
Mahmood said he hopes the fee-disclosure law will save people from considering apartments they can’t afford, and possibly even lead to lower rents.
“People will see that the market is actually higher than what people think, and then, hopefully, it causes them to calibrate,” Mahmood said.
Even if prices stay the same, though, Prochovnick thinks the law will help.
“It will enable people to budget,” Prochovnick said, “and that’s very important for those who live paycheck to paycheck.”
Charging additional fees outside of monthly rent constitutes a rent increase. How is this practice permissible under SF’s current rent control ordinance?
Junk fees? Yes, mandatory extra costs should be disclosed. But tenants paying for trash, water, pest control and other services that they directly benefit from are not “junk” anything.
So if an owner tells a tenant that the water bill is $200 per month, what happens when utilities raise rates? Water costs have already increased significantly and are projected to increase 24% over the next two years. Insurance premiums have been canceled and/or doubled in the last two years –assuming one can even get insurance. PG&E just doubled its base rate, and the supervisors want to mandate getting rid of gas water heaters, which will cost an estimated $12,000-$20,000. A parcel tax will likely be on the ballot in November. And (with the exception of one 2024, owners have been restricted to a 1%-2% rent increase for decades.
How is a small owner with rent-controlled units supposed to keep up? This city’s contempt for property owners is unparalleled.