Continuing with some of the specifics of the renters ballot initiative, one of the big disagreements with the ordinance passed by the City Council is that the “trigger” for a public airing was too high. The ballot initiative seeks to “lock in” rental rates at a certain date and only allow for increases of 65% of CPI maximum annually. From the ballot initiative:
(a) Establishment of Base Rent: Beginning the effective date of this Article, no Landlord shall charge Rent for any Controlled Rental Units in an amount greater than the Rent in effect on May 5, 2015, except for increases expressly allowed under this Charter. The Rent in effect on that date is the Base Rent. If there was no Rent in effect on May 5, 2015, the Base Rent shall be the Rent that was charged on the first date that Rent was charged following May 5, 2015. For tenancies commencing after the adoption of this Charter, the Base Rent is the initial rental rate in effect on the date the tenancy commences. As used in this Subsection, the term “initial rental rate” means only the amount of Rent actually paid by the Tenant for the initial term of the tenancy. The Base Rent is the reference point from which the Maximum Allowable Rent shall be adjusted upward or downward in accordance with Section 7(c).
However, the new Rental Control Board would be the entity that would set the maximum allowable annual rent increase which aligns with how other cities handle these amounts as well, from the ballot initiative:
(c) Annual General Adjustment: No later than June 30 each year, the Board shall announce the percentage by which Rent for eligible Rental Units will be generally adjusted effective September 1 of that year.
(1) The Annual General Adjustment shall be equal to sixty-five (65%) percent of the percentage increase in the Consumer Price Index (All Urban Consumers, San Francisco- Oakland-San Jose region, or any successor designation of that index that may later be adopted by the U.S. Bureau of Labor Statistics) as reported and published by the U.S. Department of Labor, Bureau of Labor Statistics, for the 12-month period ending as of March of the current year.
(2) Subparagraph 1 of this Subsection notwithstanding, in no event shall the Annual General Adjustment be less than zero percent (0%).
(3) For the period between the effective date of this Charter Amendment and the first Annual General Adjustment announced September 1, the landlord may increase the Maximum Allowable Rent to include one Annual General Adjustment for September 2016.
However, the initiative does allow individual landlords to petition in the case they need to raise the rent above the set annual allowance:
(d) Petitions: Upon receipt of a petition by a Landlord and/or a Tenant, the Maximum Allowable Rent of individual Controlled Rental Units may be adjusted upward or downward in accordance with the procedures set forth elsewhere in this Section. The petition shall be on the form provided by the Board and shall include a declaration by the Landlord that the Rental Unit meets all requirements of this Charter. Notwithstanding any other provision of this Section, the Board or hearing examiner may refuse to hold a hearing and/or grant a Rent adjustment if an individual hearing has been held and decision made with regard to the Maximum Allowable Rent within the previous twelve (12) months.