On September 10, Mayor Daniel Lurie declared a rent emergency in San Francisco and put forward a package of six proposed ordinances backed by more than $30 million in city spending. Nearly all the coverage since has been written from the tenant side. Almost none of it has addressed the question I have been getting from clients all week: what does this do to my building?
Here is the package, what is actually binding right now, and where I think it moves the math on San Francisco multifamily.
The numbers behind the declaration
The city's own data is the fastest way to understand why this happened when it did.
- Median rent in San Francisco rose 25.6% over the past year, the fastest increase of any major U.S. city in 2026
- Median asking rent for a one bedroom is about $4,250, up roughly 20% from a year ago (Zumper, September 2026)
- Only 2.2% of the city's multifamily stock was vacant and available as of June 2026, tighter than New York (3.4%), San Jose (4.1%), Oakland (4.5%), and Chicago (6.5%)
- More than 1,000 eviction notices have been filed this year, on pace for the most in nearly a decade, with roughly a quarter tied to nonpayment
- In 2024 the city authorized the fewest new housing units since 2010
Read those together and the story is not complicated. Demand came back, partly on the strength of the AI hiring wave, and supply did not. Rents did what rents do in a 2.2% vacancy market.
The six ordinances at a glance
Ordinance | Sponsor | What it does |
Banked increase cap | Sup. Danny Sauter | Caps banked increases plus capital improvement charges at 10% combined per year |
Nonpayment floor | Sup. Jackie Fielder | No nonpayment eviction unless the tenant owes at least one month of federal fair market rent |
Ellis Act relocation | Mayor Lurie | Raises required relocation payments 25%, roughly $3,000 more per displaced tenant |
Annual tenant notice | Sup. Matt Dorsey | Yearly written reminder to tenants of rent increase limits and just cause rules |
Voucher backfill | Dept. of Homelessness and Supportive Housing | $27 million to keep roughly 650 households current as federal vouchers expire |
Tenant Right to Counsel | Mayor Lurie | Adds $3 million, moving 400 households to full scope eviction representation |
What each one does to your building
1. The 10% Banked Increase Cap
This is the one that deserves your attention first.
The allowable annual rent increase in San Francisco is currently 1.6%, effective March 1, 2026 through February 28, 2027. Owners who choose not to take an increase on a tenant's anniversary date can bank it and apply it later. Capital improvement passthroughs sit in a separate bucket, capped at the greater of $30 or 5% of base rent per year in buildings of one to five units, and 10% in buildings of six or more.
District 3 Supervisor Danny Sauter's legislation would put banked increases and capital improvement charges under a single 10% annual ceiling. You could still accrue the increases. You simply could not collect more than 10% in any one year.
The detail buried in the mayor's announcement is the one owners should not miss: the legislation would be effective on the date of introduction, not the date of passage. If you were sitting on a large banked increase and planning to pass it through, assume that window is closing or already closed. Talk to counsel before you notice anything.
2. The Nonpayment Floor
District 9 Supervisor Jackie Fielder's measure would bar eviction for nonpayment unless the tenant owes at least one month of federal fair market rent. In practice, partial and one time shortfalls stop being an eviction path.
Plan for longer collection cycles. If your operating model assumes a fast unlawful detainer on a delinquent tenant, that assumption needs revisiting.
3. Ellis Act Payments Up 25%
Lurie will sponsor legislation increasing required Ellis Act relocation payments by 25%, roughly $3,000 more per displaced tenant, with elderly and disabled tenants already entitled to additional amounts. Payments reset every March 1.
If an Ellis withdrawal or a condo conversion exit is anywhere in your hold strategy, rerun that number now. On a fully occupied six unit building, this is not a rounding error. Pull the Rent Board's current relocation schedule rather than relying on any figure you saw in a news story, including this one.
4. Annual Notice to Tenants
District 6 Supervisor Matt Dorsey's legislation would guarantee tenants an annual reminder of rent increase limits and just cause eviction rules, including information helping them determine whether their building has come under state rent regulation.
There is a quiet implication here for newer product. California's Tenant Protection Act exempts buildings for 15 years after construction, on a rolling basis. If you own something delivered around 2011 or 2012, those units are moving into state rent caps, and under this ordinance your tenants would get an annual letter explaining exactly that. Know where your buildings sit on that clock before your tenants do.
5. $27 Million for Expiring Vouchers
This one is straightforwardly good for owners. Federal Emergency Housing Voucher funding expires at the end of 2026, four years earlier than planned. The city is committing $27 million to keep roughly 650 extremely low income households current while it transitions them to other federal subsidies.
If you hold EHV tenants, that is your rent check. Without the backfill, a meaningful share of those households become nonpayment cases in the first quarter of 2027.
6. More Lawyers on the Tenant Side
Three pieces here. An additional $3 million to the Tenant Right to Counsel program, moving 400 households from partial to full scope eviction representation. A $1 million Know Your Rights campaign run by the Mayor's Office of Housing and Community Development in partnership with the SF Chamber of Commerce and private employers. And City Attorney David Chiu directing renters to his office's complaint portal to surface systemic patterns.
The translation for owners: more tenants will know the rules, more will have real representation, and sloppy paperwork is more likely to get noticed. Clean notices, documented habitability responses, and properly filed passthrough petitions are worth more this month than they were last month.
What this does to value
Two forces are pulling against each other, and the net effect depends on your specific rent roll.
Market rents up 25.6% widens the spread between in place and market rent on every rent controlled building in the city. On its own, that raises value. What this package does is slow the rate at which an owner can capture that spread and raise the cost of the traditional levers for capturing it faster.
The practical result is that value concentrates in the things that let you reset rent to market. A vacancy is worth more. A building already close to market is worth relatively more than a comparable building carrying deep loss to lease. Post 1979 construction, which sits outside local rent control, looks better on a risk adjusted basis than it did a month ago.
None of that is a reason to panic. It is a reason to underwrite the exit differently than you did in 2024. If you have not looked at what your building is worth since rents moved 25% this year, now is the time to do it, before these ordinances are settled rather than after.
One honest caveat
Almost none of this is law yet. Six ordinances have been proposed or sponsored. They still have to move through committee and a Board vote. Tenant advocates have already called the package incomplete and are pushing for more. It could get stronger before it gets finalized, and the Sauter bill's introduction date trigger means part of it may bind well before anyone votes.
If you own San Francisco apartments, the right posture is to act on the banked increase timing now and watch the rest.
Frequently asked questions
What is the SF rent emergency?
It is a designation Mayor Daniel Lurie announced on September 10, 2026, accompanied by six proposed ordinances and more than $30 million in city funding aimed at reducing evictions and limiting sudden rent increases.
What is the 10% banked increase cap?
Proposed legislation from Supervisor Danny Sauter would cap the combined annual amount an owner can pass through from banked rent increases and capital improvement charges at 10% of a rent controlled tenant's rent. Owners could still accrue increases but could not collect more than 10% in a single year.
How much are Ellis Act payments rising?
The mayor's proposal would raise required relocation payments by 25%, roughly $3,000 more per displaced tenant. Amounts are adjusted every March 1 by the San Francisco Rent Board.
What is the allowable rent increase now?
1.6%, effective March 1, 2026 through February 28, 2027.
Is any of this in effect today?
Not yet, with one important exception. The banked increase legislation is drafted to be effective on its date of introduction rather than its date of passage, so owners should not assume they have until a Board vote.
Talk through your building
I have spent 18 years selling apartment buildings across the San Francisco Bay Area. If you own San Francisco multifamily and want to understand how this package affects your specific rent roll, exit timing, or valuation, reach out. You can also browse our available Bay Area properties.
Philip Batlin
Managing Director Investments, Marcus & Millichap
750 Battery Street, Fifth Floor, San Francisco, CA 94111
O: (415) 625-2189 | C: (415) 254-7071
[email protected]
CA DRE Lic. #01873218
This article is for informational purposes and is not legal advice. Consult a qualified attorney before acting on any of the measures described.
