Proposition H Advisory #6 - 2/6/01

Proposition H Advisory #6 - 2/6/01
Proposition H Advisory #6
February 6, 2001

On November 7, 2000, the voters of San Francisco passed Proposition H. Proposition H will have a major impact on allowable rent increases for capital improvement costs in San Francisco once it is effective. Proposition H basically prohibits capital improvement rent increases for work other than seismic retrofit work, unless they are necessary to provide the landlord with a constitutionally required fair return. Proposition H applies to all capital improvement petitions where no final decision was issued by April 10, 2000.


On November 20, 2000, the San Francisco Apartment Association, the Coalition for Better Housing and nine individual owners filed a lawsuit challenging the constitutionality of Proposition H. The lawsuit (Quigg v. City and County of San Francisco, Superior Court Case No. 316928) claims that Proposition H is unlawful because it does not allow owners who do not have 1978 base year income and expense data to obtain a constitutionally required fair return, and that it also unlawfully applies retroactively to capital improvement cases initiated prior to the effective date of the Proposition.


On December 20, 2000, the Court granted the plaintiffs" motion for a preliminary injunction in Quigg v. City and County of San Francisco to stay Proposition H from going into effect until further order of the Court or a final decision in the case. This means that Proposition H did NOT go into effect on December 21, 2000, as would have occurred absent the injunction. Refunds mandated by Proposition H for capital improvement passthroughs that are currently being paid will also NOT go into effect at this time as a result of the Court"s ruling. Accordingly, certified passthroughs for capital improvements must continue to be paid by tenants. Failure to pay certified passthroughs could result in eviction actions being taken.


The Court"s order in the Quigg case did not prohibit the filing and processing of capital improvement petitions at the Rent Board. Accordingly, the Rent Board continues to process capital improvement petitions as usual. However, in mid-January 2001, Supervisor Gonzalez introduced legislation which would place a temporary moratorium on Rent Board processing or approval of capital improvement petitions during pendency of the Superior Court preliminary injunction staying implementation of Proposition H. The San Francisco Board of Supervisors is scheduled to vote on the proposed moratorium in February 2001. If the moratorium goes into effect, the Rent Board will continue to accept new capital improvement petitions, but will not hold hearings, issue decisions or decide appeals in any pending capital improvement cases.


Getting Up-to-Date Information on Implementation of Proposition H


Information concerning the Rent Board"s development of forms, regulations and procedures, as well as the status of legal actions to challenge Proposition H, may be obtained from the Rent Board in the following ways:


Web site: under "What"s New"


24-Hour Recorded Information Line: 415.252.4600, Menu No. 46, "Proposition H-Current Status"


Fax Back: 415.252.4660, Document Number 014, "What"s New/Amended"


We will keep the information available from these resources current. Should you have questions that are not answered in these resources, you can also call our counseling staff at 415.252.4602 from 9-12 am and 1-4 pm, Monday through Friday.