S.F. Apartment Assn. v. City & County of S.F.

Filed 1/24/22

CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION FOUR

SAN FRANCISCO APARTMENT ASSOCIATION et al., Plaintiffs and Appellants, A161416

v. (City & County of San Francisco CITY AND COUNTY OF Super. Ct. No. CPF-19-516566) SAN FRANCISCO, Defendant and Respondent.

We here reject an attempt by landlord interest groups to preclude the City and County of San Francisco (the city) from thwarting bad faith efforts to circumvent the city’s lawful restrictions on the right to evict residential tenants whose rent the city cannot regulate. The Costa Hawkins Rental Housing Act, Civil Code section 1954.50 et seq. (Costa Hawkins) generally exempts newly constructed residential units, single family homes and condominiums from local rent increase limitations. (Civ. Code, § 1954.52, subd. (a).) 1 The San Francisco Rent

1Civil Code section 1954.52, subdivision (a) provides: “Notwithstanding any other provision of law, an owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit about which any of the following is true: [¶] (1) It has a certificate of occupancy issued after February 1, 1995. [¶] . . . [¶] (3) [¶] (A) It is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision, as specified in subdivision (b), (d), or (f) of Section 11004.5 of the Business and Professions Code.”

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Ordinance (S.F. Admin. Code, 2 § 37 et seq.) (rent ordinance), acknowledges these exemptions in section 37.3, subdivisions (d) and (g). 3 Costa Hawkins expressly preserves, however, local authority to “regulate or monitor the grounds for eviction” on all residential rental properties, including properties exempt from local rent control. (Civ. Code, § 1954.52, subd. (c) [“Nothing in this section shall be construed to affect any authority of a public entity that may otherwise exist to regulate or monitor the grounds for eviction.”].) In the present action, plaintiffs and appellants San Francisco Apartment Association, Coalition for Better Housing, San Francisco Association of Realtors, and Small Property Owners of San Francisco Institute (collectively, plaintiffs) challenge the lawfulness of an ordinance enacted by the city. The measure amended the city’s rent ordinance to make it unlawful for a landlord to seek to recover possession of a rental unit that is exempt from rent control by means of a rental increase that is imposed in bad

2All statutory references are to the San Francisco Administrative Code unless otherwise noted. 3 Section 37.3, subdivision (d) provides in relevant part: “Consistent with [Costa Hawkins] and regardless of whether otherwise provided under Chapter 37: [¶] (1) Property Owner Rights to Establish Initial and All Subsequent Rental Rates for Separately Alienable Parcels. [¶] (A) An owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit which is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision as specified in subdivision (b), (d), or (f) of Section 11004.5 of the California Business and Professions Code.” Section 37.3, subdivision (g) provides in relevant part: “(1) An owner of a residential dwelling or unit which is newly constructed and first received a certificate of occupancy after the effective date of Ordinance No. 276-79 (June 13, 1979), or which the Rent Board has certified has undergone a substantial rehabilitation, may establish the initial and all subsequent rental rates for that dwelling or unit.”