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Board approves first-reading changes to how general obligation bond pass-throughs are calculated for tenants
Summary
The board approved on first reading an ordinance changing the calculation for general-obligation bond property-tax pass-throughs to tenants to be based on the tenant's base year (or February 2005) and removed a Rent Board filing requirement for smaller landlords.
Supervisor Peskin introduced an ordinance (item 19) that would change how landlords may pass through increases tied to general obligation (GO) bonds to tenants. After discussion and a small amendment to address filings by smaller landlords, the board approved the ordinance on first reading.
Peskin traced the policy background to a long-standing local process related to GO bonds and their pass-throughs to tenants. He said: "So if there is no increase in the property tax rate from the tenant's base year to after general obligation bond is passed, there is no increase to pass through to the tenant and that is reflected in this recalculation rate." The ordinance recalculates the pass-through based on the tenant's base year, or February 2005 if later, and allows tenants to seek relief from GO-bond pass-throughs based on financial hardship; changes would take effect July 1, 2024 and would not affect prior-year pass-throughs.
Peskin said he had negotiated language with the San Francisco Apartment Association to ease administrative burdens for small landlords: the board agreed to strike a proposed requirement that landlords file copies of completed calculation forms with the Rent Board (page 8, lines 22' 23). "That gives a modicum of relief to small landlords, less paperwork to comply with," Peskin said.
The motion to adopt the ordinance on first reading, with the filing requirement removed, passed without recorded objection and was announced by the clerk as passing on first reading.
Discussion vs. decision: discussion consisted of background on the long-standing "Solomonic compromise" and on the mechanics of the pass-through formula; the formal board action was adoption of the ordinance on first reading. The ordinance will return for subsequent readings or other follow-up steps as required by city procedure.
Implementation and next steps: The ordinance is set to take effect July 1, 2024 (per the sponsor's notes) and will not alter past pass-throughs. The Rent Board filing modification reduces a compliance step for small landlords; tenants will still be entitled to see the calculation and to pursue hardship relief under the revised approach.
Ending: The board advanced the ordinance on first reading with the agreed amendment to ease filing burdens for small landlords.
