How Much Can You Legally Raise Rent in SF?

Photo: The owner's side of an annual rent increase — the document that, if served wrong, costs you the year.

I'm Christopher Lee — a San Francisco Realtor and property manager (CA DRE #02120811). The single most-missed annual landlord task in San Francisco is serving a clean, lawful rent increase on every eligible tenancy every year. Owners miss it. They miscalculate it. They serve it on the wrong form. They serve it by the wrong method. They serve it too late. The result is a year of lost income that, for most rent-controlled tenancies, cannot be reclaimed.

This is the evergreen procedural guide I use with the buildings I manage. It covers when an increase can be served, how to calculate the allowable amount (including banked increases), how to draft and serve the notice, what passthroughs exist beyond the basic annual increase, and what happens if you get it wrong. The specific allowable percentage updates each Rent Board year — always confirm the current year's number on the Rent Board website before serving a notice.

Why this matters. On a six-unit building with $250K of annual gross rent, the cumulative cost of missing one year of allowable increases compounds to $15K-$30K over a decade. Across a portfolio, missed increases are the single biggest preventable income leak in SF property management.

Step 1: Confirm the unit is eligible for price control

Not every SF rental unit is subject to price control. Before serving any increase notice:

• Pre-June 13, 1979 Certificate of Occupancy → subject to price control (the most common SF case).
• Post-June 13, 1979 Certificate of Occupancy → exempt from price control under Costa-Hawkins. Owners can increase by any amount with proper notice (typically 30 days for increases up to 10%, 60-90 days for larger increases under California Civil Code §827).
• Single-family homes / condos → exempt from price control under Costa-Hawkins for tenancies that began on or after January 1, 1996. Legacy 1995-or-earlier tenancies may still be subject to price control.
• Subsidized housing / HUD / Section 8 → separate rules govern.

For a deeper treatment of which buildings are covered, see my SF Rent Control Explained guide.

Step 2: Calculate the allowable annual increase

The San Francisco Rent Board publishes the allowable annual increase percentage each spring, effective for the Rent Board year running March 1 through February 28/29. The formula is 60% of the change in the regional CPI, with a hard cap of 7%.

The base calculation

Annual increase ($) = Current rent × Allowable annual increase %

If the current rent is $2,800/month and the allowable annual increase is 1.7%:

$2,800 × 1.017 = $2,847.60 → round to $2,848 new monthly rent.

Banked increases

If you didn't serve the maximum allowable increase in a prior year (or didn't serve any increase at all), the unused portion can be "banked" and added to a future increase. Banking has rules:

• The total combined increase in any 12-month period is capped at 10% of the current rent.
• Banked increases must reflect a defined look-back window (confirm the current rule with the Rent Board).
• Banked increases must be clearly itemized on the notice (current year allowance + banked years).

Common mistake. Owners try to bank a decade of unused increases into a single 40% rent hike. The Rent Board will reverse it on petition — the cap exists. Respect the 10% rule.

Example: a combined increase with banked years

A unit at $2,800/month. The owner skipped the 2022-23 increase (2.3%) and the 2023-24 increase (3.6%). The current 2024-25 increase is 1.7%.

• Available increases: 2.3% + 3.6% + 1.7% = 7.6% cumulative
• 7.6% applied to $2,800: $2,800 × 1.076 = $3,012.80
• Within the 10% cap → permissible
• New rent: $3,013

The notice must itemize: "Combined annual increase pursuant to SF Rent Board Regulations: 1.7% current year + 3.6% banked from 2023-24 + 2.3% banked from 2022-23 = 7.6%."

Step 3: Calculate any additional permissible passthroughs

Above the basic annual increase, San Francisco landlords can petition the Rent Board for certain passthroughs:

Capital improvement passthrough

A petition-based recovery of capital improvement costs (new roof, seismic retrofit, mechanical system replacement) amortized over the useful life and split between the owner and tenants. The owner files a petition, the tenants get notice and the right to object, and the Rent Board issues a decision.

Operating and maintenance (O&M) passthrough

A petition-based recovery of certain operating cost increases beyond inflation. Less commonly used than capital improvement passthroughs.

Utility passthrough

For buildings where the owner pays utilities (gas, electric, water), the tenant's share of utility increases over a base year can be passed through following Rent Board procedures.

Property tax passthrough

In some cases involving the supplemental tax bill from a recent purchase, a partial passthrough may be available. Specific rules apply.

Pro tip. Passthroughs require petitions, hearings, and documentation. They are not back-of-envelope adjustments. If you've done significant capital work — a $100K+ roof, a $300K+ soft-story retrofit, a major plumbing replacement — work with counsel or your property manager to file the passthrough petition. The amounts recovered over years can be material.

Step 4: Draft the notice

A lawful annual rent increase notice must include:

• The unit address and identification of parties
• The current rent and the new rent
• The effective date of the increase (must respect the notice period)
• The amount of the increase, itemized between the current-year allowance and any banked components
• Reference to the SF Rent Board Regulations authorizing the increase
• Any passthrough components separately itemized

Notice period

For price-controlled units, the notice period is governed by California Civil Code §827:

• Increases of 10% or less in any 12-month period: 30 days' written notice (with proper service add 5 days for mailing).
• Increases above 10% (rare for price-controlled units; more common for exempt units): 90 days' written notice.

Banked increases that bring the combined increase to (or near) the 10% cap still require 30-day notice under §827 — but pay attention to the 10% cap, not the 30-day threshold.

Format

The Rent Board does not require a specific form, but the notice should be in writing, dated, signed, and contain all required elements. Many SF property managers use a standard template that has been reviewed by counsel.

Step 5: Serve the notice properly

Service of the notice matters as much as the calculation. The accepted methods:

• Personal service on the tenant (best practice; document with a signed acknowledgement when possible)
• Substituted service at the unit on a competent adult, with a mailed copy
• Post-and-mail (only after diligent attempts at personal/substituted service)
• Certified mail with return receipt requested (some attorneys consider mail-only service insufficient on its own under §827; safer to combine with personal or substituted service)

Document the date and method of service. Keep a copy of the notice with proof of service in the property file.

Common mistake. Owners email the increase notice without any signature confirmation, calculate the effective date based on the email date, and assume it's enforceable. It usually isn't. Use written notice, personal or certified service, and document everything.

Step 6: Track effective date and apply

The effective date should be at least 30 days (plus 5 mailing days if served by mail) after service of the notice. If the rent is due on the 1st of each month, the increase typically takes effect on the next rent due date after the notice period expires.

Update your rent ledger, your owner statement, any auto-pay arrangements with the tenant, and any documentation provided to lenders or accountants.

Comparison: clean increase vs. botched increase

The procedural discipline is the entire game.

What about exempt units?

For units exempt from price control (post-1979 buildings, single-family homes with post-1995 tenancies, etc.), owners can serve increases of any amount, subject to:

• California Civil Code §827 notice periods (30 days for ≤10%, 90 days for >10%)
• Any contractual constraints in the lease (fixed lease term, cap clauses)
• Anti-retaliation rules (you cannot raise rent in retaliation for protected tenant conduct)
• Anti-discrimination rules

In practice, large exempt-unit increases require notice, documentation, and consideration of market positioning. Pricing a unit 40% above market because you can will produce a vacancy you didn't want.

Annual operating cadence

For owners and managers running SF rentals, the annual cadence I recommend:

March (Rent Board year starts)

• The Rent Board publishes the new allowable annual increase percentage in late February / early March.
• Review every unit's anniversary date for the prior 12 months and identify which units are eligible for an increase served in the next quarter.
• Confirm the rent ledger for each unit is current and clean.

April–June

• Serve annual increase notices for tenancies with effective dates in the second half of the year.
• Review any units where a banked increase might be appropriate (use sparingly and within the 10% cap).
• Confirm any passthrough petitions in progress are tracking.

July–September

• Mid-year reconciliation: confirm all served increases are being collected.
• Review the property's capital plan for any work that should be initiated before year-end.
• Begin tax-year planning conversations with CPA.

October–December

• Year-end tenancy and rent reconciliation.
• Final increase notices for any tenancies with January–February effective dates.
• Year-end vendor 1099 preparation.

January–February

• Prepare for the new Rent Board year.
• Owner tax packages delivered.
• Annual review of building strategy: capital plan, rent positioning, any disposition or refi planning.

What happens if you get it wrong

Failure modes and their consequences:

Calculation error (overcharge)

If the increase exceeds the allowable amount, the tenant can petition the Rent Board. The Rent Board will roll back the increase to the lawful amount and may order refund of any overcharges collected.

Missing notice

The increase is unenforceable. The tenant continues paying the old rent until a new, valid notice is served.

Late service or wrong effective date

The increase doesn't take effect until 30+ days after proper service. Charging the higher amount before that date creates an overcharge claim.

Missing the year entirely

The allowance for that year is not lost forever — you can typically bank it for use in a future year (subject to the cumulative 10% cap and Rent Board look-back rules). But banking is bounded; you cannot wait 8 years and then capture all 8 years at once.

Improper banked increase

If you bank without itemizing on the notice, the banked portion is voided. The current-year allowance still applies.

Tenant disputes via Rent Board petition

If the tenant files a petition disputing the increase, you'll receive notice and have the opportunity to respond. The Rent Board hears the matter and issues a decision. A clean record (written notice with proof of service, accurate calculation, proper itemization) usually wins. A sloppy record usually doesn't.

Working with me

For owners I work with, the annual increase calendar is part of my regular property management cadence — every eligible tenancy receives the maximum lawful increase, served on the correct schedule, with documented service and clean records. If your current process is informal or you're not sure whether your last increase was served correctly, schedule a property management review and I'll walk through your rent roll, confirm what's been served, and identify any banked increases or passthrough opportunities you may have missed.

Related guides:

• SF Rent Control Explained
• How to Hire an SF Property Manager
• Rent Estimate Guide
• Tenant Buyouts in San Francisco