San Francisco County Municipal Code Ch. 41 Residential Hotel Unit Conversion and Demolition

Sec. 41.1. Title. Sec. 41.2. Purpose. Sec. 41.3. Findings. Sec. 41.4. Definitions. Sec. 41.5. Applicability of this Chapter. Sec. 41.6. Initial Status Determination. Sec. 41.7. Statements of Exemption; Applicability of this Chapter. Sec. 41.8. Requirements for Nonprofit Organizations. Sec. 41.9. Records of Use. Sec. 41.10. Annual Unit Usage Report. Sec. 41.11. Administration. Sec. 41.12. Permit to Convert. Sec. 41.13. One-for-one Replacement. Sec. 41.14. Mandatory Denial of Permit to Convert. Sec. 41.15. Approval and Issuance of Permit to Convert. Sec. 41.16. Appeal of Denial or Approval of Permit to Convert. Sec. 41.17. Rights of Permanent Residents. Sec. 41.18. Demolition. Sec. 41.19. Temporary Change of Occupancy. Sec. 41.20. Unlawful Conversion; Remedies; Fines. Sec. 41.21. Annual Review of Residential Hotel Status. Sec. 41.22. Report of Residential Hotel Status Prior to Sale or Transfer.

Sec. 41.23. Amortization. Sec. 41.24. Construction.

This Chapter shall be known as the Residential Hotel Unit Conversion and Demolition Ordinance. (Added by Ord. 121-90, App. 4/12/90)

It is the purpose of this ordinance to benefit the general public by minimizing adverse impact on the housing supply and on displaced low income, elderly, and disabled persons resulting from the loss of residential hotel units through their conversion and demolition. This is to be accomplished by establishing the status of residential hotel units, by regulating the demolition and conversion of residential hotel units to other uses, and by appropriate administrative and judicial remedies. (Added by Ord. 121-90, App. 4/12/90)

The Board of Supervisors finds that: (a) There is a severe shortage of decent, safe, sanitary and affordable rental housing in the City and County of San Francisco and this shortage affects most severely the elderly, the disabled and low-income persons. (b) The people of the City and County of San Francisco, cognizant of the housing shortage of San Francisco, on November 4, 1980, adopted a declaration of policy to increase the city's housing supply by 20,000 units. (c) Many of the elderly, disabled and low-income persons and households reside in residential hotel units. (d) A study prepared by the Department of City Planning estimated that there were only 26,884 residential hotel units in the City in December of 1979, a decrease of 6,098 such units from 1975. Since enactment of this Chapter, residential hotel units have continued to decrease, at a slower rate: in 1981, there were 20,466 residential hotel units as defined by this Chapter; in 1988, there were 18,723 residential hotel units, a decrease of 1,743 over a period of 7 years. The decrease is caused by vacation, conversion or demolition of residential hotel units. Continued vacation, conversion or demolition of residential hotel units will aggravate the existing shortage of affordable, safe and sanitary housing in the City and County of San Francisco. (e) As a result of the removal of residential hotel units from the rental housing market, a housing emergency exists within the City and County of San Francisco for its elderly, disabled and low-income households. (f) Residential hotel units are endangered housing resources and must be protected. (g) The Board of Supervisors and the Mayor of the City and County of San Francisco recognized this housing emergency and enacted an ordinance which established a moratorium on the demolition or conversion of residential hotel units to any other use. The moratorium ordinance became effective on November 21, 1979. (h) The conversion of residential hotel units affects those persons who are least able to cope with displacement in San Francisco's housing market. (i) It is in the public interest that conversion of residential hotel units be regulated and that remedies be provided where unlawful conversion has occurred, in order to protect the resident tenants and to conserve the limited housing resources. (j) The tourist industry is one of the major industries of the City and County of San Francisco. Tourism is essential for the economic well being of San Francisco. Therefore, it is in the public interest that a certain number of moderately priced tourist hotel units be maintained especially during the annual tourist season between May 1st and September 30th. (k) Tourist activity has increased steadily in San Francisco since 1983. There are currently approximately 23,000 tourist hotel units in the City and over 3,000 additional such units will be added by 1988 through new construction. However, there are presently only 18,723 residential hotel units and this number is not increasing. In addition, rents for residential hotel units have risen an average of 23 percent

annually since 1980, making such units less and less affordable as a housing resource for the elderly, disabled and low-income persons. Since the adoption of this ordinance, hotel owners have begun to leave residential units vacant during the non-tourist season (October 1st

• April 30th) in order to rent these units to tourists at high daily rental rates during the tourist season (May 1st - September 30th). This activity, which further reduces the available supply of low and moderate income housing in San Francisco, is not presently prohibited under this Chapter. In order to assure that residential hotel owners do not continue to withhold these available residential units from prospective permanent residents during the non-tourist season, it is necessary to restrict the tourist season rental of vacant residential hotel units. Such a restriction will not interfere with San Francisco's tourism, which remains essential to the economic well-being of the City. (l) Since enactment of this Chapter, it has become apparent that portions of this Chapter were difficult and extremely costly to interpret and enforce, resulting in an inability to fulfill the essential intent of this Chapter and to prevent illegal conversions. (m) Certain uses provide both living accommodation and services, such as health care, personal care, and counseling, to residents of the City. Examples of such uses are hospital, skilled nursing facility, AIDS hospice, intermediate care facility, asylum, sanitarium, orphanage, prison, convent, rectory, residential care facility for the elderly, and community care facility. Such facilities are often operated in buildings owned or leased by non-profit organizations and provide needed services to the City’s residents. To subject such facilities to the provisions of this Chapter may deter future development of such facilities. It is desirable that such facilities exist and the City should encourage construction and operation of such facilities. (n) In addition, a form of housing facilities called “transitional housing” provides housing and supportive services to homeless persons and families and is intended to facilitate the movement of homeless individuals and families to independent living or longer term supportive residences in a reasonable amount of time. Transitional housing has individual living quarters with physical characteristics often similar to a residential hotel (i.e., accommodations which provide privacy to residents) and provides a source of interim housing for homeless individuals and families seeking to live independently. (o) The City’s public, quasi-public, and private social agencies serving the elderly and needy persons often find it difficult to immediately locate suitable housing units for such persons returning to independent living after hospitalization or upon leaving skilled- nursing or intermediate care facilities within a short time after their discharge from a health facility. Such persons often will require minimum supervision and other interim social service support. The provision of a stable number of housing units for such emergency needs until permanent housing can be secured and supportive services arranged are necessary and desirable for the City. Emergency housing will have physical characteristics similar to “transitional housing” and is often intended to be occupied for a period of less than one month. (p) The City also wishes to provide positive incentives to encourage residential hotel owners and operators to comply with the terms of this Chapter. Hotel owners have expressed a need to rent certain residential units on a short term basis during the winter months. In an effort to address this need and to encourage compliance with this Chapter, the City wishes to provide an opportunity to hotel owners who have complied with the terms of this Chapter to rent a limited number of residential units to tourists during the winter months. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 38-17*, File No. 161291, App. 2/17/2017, Eff. 3/19/2017; Ord. 56-20, File No. 191258, App. 4/10/2020, Eff. 5/11/2020) *Editor’s Note: Ord. 56-20 repealed Ord. 38-17, restoring the text of this Section as it existed prior to adoption of that ordinance, and then enacted amendments to that text.

For purposes of this Chapter 41, the following terms shall have the following meanings: Certificate of Use. Following the initial unit usage and annual unit usage determination pursuant to the provisions of Sections 41.6 and 41.10 below, every hotel shall be issued a certificate of use specifying the number of residential and tourist units herein. Comparable Unit. A unit which is similar in size, services, rental amount, and facilities, and is designated the same category of housing as the existing unit, and is located within the existing neighborhood or within a neighborhood with similar physical and socioeconomic conditions, and is similarly affordable for low income, elderly, and disabled persons. Conversion. The change or attempted change of the use of a residential unit to a Tourist or Transient use, or the elimination of a residential unit, or the voluntary demolition of a residential hotel. However, a change in the use of a residential hotel unit into a non- commercial use which serves only the needs of the permanent residents, such as a resident’s lounge, community kitchen, or common area, shall not constitute a conversion within the meaning of this Chapter 41, provided that the residential hotel owner establishes that eliminating or re-designating an existing tourist unit instead of a residential unit would be infeasible. Disabled Person. A recipient of disability benefits. Elderly Person. A person 62 years of age or older. Emergency Housing. A project which provides housing and supportive services to elderly or low-income persons upon leaving a health facility and which has its primary purpose facilitating the return of such individuals to independent living. The emergency housing shall provide services and living quarters pursuant to Section 41.13 herein and may be provided as part of a “transitional housing” project.

Hotel. Any building containing six or more guest rooms intended or designed to be used, or which are used, rented, or hired out to be occupied or which are occupied for sleeping purposes and dwelling purposes by guests, whether rent is paid in money, goods, or services. It includes motels, as defined in Section 401 of the Housing Code, but does not include any jail, health facilities as defined in Section 1250 of the California Health and Safety Code, asylum, sanitarium, orphanage, prison convent, rectory, residential care facility for the elderly as defined in Section 1569.2 of the Health and Safety Code, residential facilities as defined in Section 1502 of the Health and Safety Code or other institution in which human beings are housed or detained under legal restraint, or any private club and nonprofit organization in existence on September 23, 1979; provided, however, that nonprofit organizations which operated a residential hotel on September 23, 1979, shall comply with the provisions of Section 41.8 herein. Interested Party. A permanent resident of a hotel, or his or her authorized representative, or a former tenant of a hotel who vacated a residential unit within the past 90 days preceding the filing of a complaint or court proceeding to enforce the provisions of this Chapter 41. Interested party shall also mean any nonprofit organization, as defined in this Section 41.4, which has the preservation or improvement of housing as a stated purpose in its articles of incorporation and/or bylaws. Low-Income Household. A household whose income does not exceed 60% of the Area Median Income as set forth in Charter Section 16.110. Low-Income Housing. Residential units whose rent may not exceed 30% of the gross monthly income of a Low-Income Household as defined above. Nonprofit Organization. An entity exempt from taxation pursuant to Title 26, Section 501 of the United States Code. Operator. The lessee or any person or legal entity whether or not the owner, who is responsible for the day-to-day operation of a residential hotel and to whom a hotel license is issued for a Residential Hotel. Owner. Any person or legal entity holding any ownership interest in a Residential Hotel. Permanent Resident. A person who occupies a guest room for at least 30 consecutive days. Posting or Post. The display of a notice or information in a conspicuous location at the front desk in the lobby of the hotel, or if there is no lobby, in the public entranceway. No material posted may be removed by any person except as otherwise provided in this Chapter. Residential Hotel. Any building or structure which contains a Residential Unit as defined below unless exempted pursuant to the provisions of Sections 41.5 or 41.7 below. Residential Unit. Any guest room as defined in Section 401 of the Housing Code which had been occupied by a permanent resident on September 23, 1979. Any guest room constructed subsequent to September 23, 1979, or not occupied by a permanent resident on September 23, 1979, shall not be subject to the provisions of this Chapter 41; provided however, if designated as a residential unit pursuant to Section 41.6 of this Chapter or constructed as a replacement unit, such residential units shall be subject to the provisions of this Chapter. Tourist Hotel. Any building containing six or more guest rooms intended or designated to be used for commercial tourist use by providing accommodation to transient guests on a nightly basis or longer. A tourist hotel shall be considered a Hotel use as defined in Planning Code Section 102 and shall not considered1 Group Housing as defined in Planning Code Section 102. Tourist or Transient Use. For two years after the effective date of Ordinance No. 36-23 in Board of Supervisors File No. 220815, “Tourist or Transient Use” shall mean any use of a guest room for less than a 7-day term of tenancy by a party other than a Permanent Resident. After that two-year period, “Tourist or Transient Use” shall mean any use of a guest room for less than a 30-day term of tenancy by a party other than a Permanent Resident, unless a hotel owner or operator demonstrates, in accordance with the process and factors described in Section 41.23, that a longer time is necessary to recover reasonable investments in the owner or operator’s hotel. Tourist Unit. A guest room which was not occupied on September 23, 1979, by a permanent resident or is certified as a Tourist Unit pursuant to Sections 41.6, 41.7, or 41.8 below. Designation as a tourist unit under this Chapter 41 shall not supersede any limitations on use pursuant to the Planning Code. Transitional Housing. A project which provides housing and supportive services to homeless persons and families or Low-Income Households at risk of becoming homeless which has as its purpose facilitating the movement of homeless individuals or at-risk Low- Income Households to independent living within a reasonable amount of time. The Transitional Housing shall provide services and living quarters as approved by the Planning Commission that are similar to the residential unit being replaced pursuant to Section 41.13 herein and shall comply with all relevant provisions of City ordinances and regulations. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 38-17,* File No. 161291, App. 2/17/2017, Eff. 3/19/2017; Ord. 102-19,* File No. 190049, App. 5/31/2019, Eff. 7/1/2019; Ord. 56-20, File No. 191258, App. 4/10/2020, Eff. 5/11/2020; Ord. 63-20, File No. 200077, App. 4/24/2020, Eff. 5/25/2020; Ord. 36-23, File No. 220815, App. 3/24/2023, Eff. 4/24/2023) CODIFICATION NOTE

1. So in Ord. 63-20. *Editor’s Note: Ord. 56-20, except as stated in Section 4 thereof, repealed Ords. 38-17 and 102-19, restoring the text of this Section as it existed prior to adoption of Ord. 38-17. Ord. 56-20 then amended the restored text. Section 4 of Ord. 56-20 provides: “To the extent Ordinance No. 38-17 amended any cross-references

App. 3/24/2023, Eff. 4/24/2023) CODIFICATION NOTE

1. So in Ord. 63-20. *Editor’s Note: Ord. 56-20, except as stated in Section 4 thereof, repealed Ords. 38-17 and 102-19, restoring the text of this Section as it existed prior to adoption of Ord. 38-17. Ord. 56-20 then amended the restored text. Section 4 of Ord. 56-20 provides: “To the extent Ordinance No. 38-17 amended any cross-references to Section 41.4 in the Municipal Code to reflect the removal of the letter designations in Section 41.4, [...] that feature – and only that feature – of Ordinance No. 38-17 is not repealed.”

The provisions of this Chapter shall not apply to: (a) The change in use of a residential unit where the unit has been found to be unfit for human habitation prior to November 23, 1979 and ordered to be vacated by the Department of Public Health; or (b) A hotel wherein 95 percent of the guest rooms were tourist units on September 23, 1979; or (c) A unit which rented for over $1,000 per month on September 23, 1979; or (d) A hotel in which 95 percent of the total number of guest rooms rented for more than $1,000 per month on September 23, 1979; or (e) A building which was unlawfully converted to a rooming house or hotel in violation of the provisions of the City Planning Code; or (f) A building which meets the requirements of Section 41.7(c) below for a claim of exemption for partially-completed conversions; or (g) A building which meets the requirements of Section 41.7(b) below for a claim of exemption for low-income housing; or (h) A building which is lawfully approved by the City after September 23, 1979, and is not a replacement unit pursuant to Section 41.13 herein, so long as it is operated by a public entity or a nonprofit organization as a jail, health facilities as defined by Section 1250 of the Health and Safety Code, asylum, sanitarium, orphanage, prison, convent, rectory, residential care facility for the elderly as defined in Section 1569.2 of the Health and Safety Code, residential facilities as defined in Section 1502 of Health and Safety Code, or other institution in which human beings are housed or detained under legal restraint. (Added by Ord. 121-90, App. 4/12/90)

(a) Filing of Initial Status Determination; Time Limit. Within 30 calendar days of the mailing date of the summary of the ordinance and the prescribed reporting forms, the owner or operator of each hotel shall file either a statement of exemption, a claim of exemption based on low-income housing, a claim of exemption based on partially completed conversion, or an initial unit usage report as specified below. All filing shall be accompanied by supporting evidence. However, upon application by an owner or operator and upon showing a good cause therefor, the Director of the Department of Building Inspection may grant an extension of time not to exceed 30 days for filing. Owner or operator shall post a notice on the day of filing that a copy of the initial status determination document filed with the Director of the Department of Building Inspection is available for inspection between the hours of 9:00 a.m. and 5:00 p.m. Monday through Friday. (b) Filing of Initial Unit Usage Report. All hotels not covered by the exemptions in Sections 41.5, 41.7 or 41.8 must file an initial unit usage report containing the following: (1) The number of residential and tourist units in the hotel as of September 23, 1979; (2) The designation by room number and location of the residential units and tourist units as of seven calendar days prior to the date of filing the report; (3) The total number of residential and tourist rooms in the hotel as of seven calendar days prior to date of filing the report. (c) Insufficient Filing. If the Director of the Department of Building Inspection or his designee determines that additional information is needed to make a determination, the Director shall request the additional information in writing. The owner or operator shall furnish the requested information within 15 calendar days upon receipt of the written request. Owner or operator shall immediately post a notice that a copy of the requested information is available for inspection between the hours of 9:00 a.m. and 5:00 p.m. Monday through Friday at the Department of Building Inspection. If the requested information is not furnished, all the guest rooms not supported by evidence shall be deemed to be residential units. (d) Certification of Units. The Director of the Department of Building Inspection shall review the information and accompanying supporting data. A certified copy of hotel tax returns for the calendar year 1979 may be used to establish the number of tourist units and the Director of the Department of Building Inspection or the Director's designee may personally inspect units to establish the number of tourist units. If, in the opinion of the Director of the Department of Building Inspection, the initial unit usage report is supported by adequate supporting evidence, the Director shall certify the number of residential and tourist units within 90 calendar days of its submission. The owner or operator shall have the burden of proving the number of tourist units claimed by a preponderance of evidence. Notwithstanding any other provisions in this Chapter, if an owner or operator took possession of the hotel operation after September 23, 1979 and before June 15, 1981, and if the owner or operator can demonstrate that good cause exists why he/she cannot obtain supporting evidence from the previous owner or operator to file the initial report, the owner or operator shall base his/her filing on

information available to him/her two weeks after he/she took possession of the hotel; any units which are vacant on that date shall be allocated equally between tourist and residential uses; provided that a permanent resident may rebut this presumption by clear and convincing evidence. After the Director of the Department of Building Inspection certifies the number of residential and tourist units, the Director shall issue a certificate of use. The Certificate of Use shall be posted permanently in the lobby or entranceway of the hotel. (e) Failure to File Statement of Exemption, Claim of Exemption or Initial Unit Usage Report. If no initial unit usage report, or statement of exemption, or a claim of exemption based on partially completed conversion, or a claim of exemption based on low-income housing for all of the guest rooms, is filed for a hotel within the time set forth in Section 41.6(a), the Director of Department of Building Inspection shall mail a notice to the owner or operator of record by registered or certified mail stating that all the rooms in the hotel shall be deemed residential units unless the owner or operator files unit usage report within 10 calendar days of the mailing date of said notice and that a late filing fee of $50 will be assessed in addition to the fee set forth in Section 41.11 of this Chapter. If the owner or operator fails to submit a unit usage report within 10 calendar days after notification by the Department of Building Inspection, a certificate of use for residential units only shall be issued. (f) Appeal of Initial Determination. An owner or operator may appeal the initial unit status determination by the Director of the Department of Building Inspection provided that there was no challenge pursuant to the provisions of subsection (g) below, and further provided that an appeal is filed within 10 calendar days of the mailing of the certification. If an appeal is filed, a copy of the notice of appeal shall be posted by the owner or operator and a hearing pursuant to the provisions of Section 41.8(b) shall be scheduled. (g) Challenge; Standing; Statute of Limitation. Challenges to the information contained in the initial status determination report filed by the owner or operator may be filed by an interested party in writing provided that it is submitted within 15 calendar days from the date the report to the Department of Building Inspection is filed. Upon receipt of a challenge, a hearing shall be held by the Director of the Department of Building Inspection or his designee pursuant to the provisions of Section 41.11(b). The owner or operator shall have the burden of proving by a preponderance of evidence that the information filed is correct. (h) Reporting Forms for Initial Unit Usage Report. Compliance by any party or by the City of San Francisco with notice, filing, challenge, designation of unit and certification requirements of Ordinance 330-81 regarding the initial status of units shall satisfy similar requirements set forth in this Chapter and all such notices, filings, challenges, designations or certificates shall have the same force and effect as if made pursuant to this subsection. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001)

(a) Statement of Exemption Based on Inapplicability of This Chapter. Any hotel claiming that this Chapter does not apply, under the provisions of Sections 41.5(a) through 41.5(d), shall file a statement of exemption specifying the basis for the exemption. Any hotel claiming exemption under the provisions of Sections 41.5(b) through 41.5(d) shall also state the total number of guest rooms and the number of residential hotel units with monthly rent over $1,000 per month. (b) Claim of Exemption Based on Low-Income Housing. To qualify for a claim of exemption based on low-income housing, the units to be rehabilitated meet the following requirements: (1) A claim for this exemption has been filed and the requisite fees paid to the Department of Building Inspection no later than 60 calendar days after the effective date of this ordinance; (2) With the exception of ground floor commercial space, the entire building must be completely occupied as low-income housing; (3) The Director of the Department of Building Inspection finds that the proposed elimination of a unit is necessary to comply with Building Code and Housing Code requirements; and (4) Alternate guest rooms are made available within the building to the displaced permanent residents; or (5) In those circumstances where it is necessary to relocate a permanent resident off site, the permanent resident shall receive the actual moving expenses and the difference between the rent at the time of relocation and the rent of the temporary housing during the period of rehabilitation. (6) The owner or operator and successors in interest shall continue to maintain all units in the rehabilitated hotel as low-income housing for 25 years. A deed restriction on such use shall be submitted to the City Attorney's Office for approval. An approved copy of the deed restriction shall be forwarded to the Director of the Department of Building Inspection ands the original shall be filed with the Recorder by the owner or operator. (c) Claim of Exemption Based on Partially Completed Conversion. A claim of exemption based on partially completed conversion shall not be approved until and unless owner or operator shows that all of the following requirements are met: (1) An application for partially completed conversion was filed no later than 60 calendar days after the effective date of this ordinance; (2) The owner or operator has commenced work on extensive Capital Improvements and Rehabilitation Work prior to November 23, 1979, as defined in Section 37.2 of the San Francisco Administrative Code (the San Francisco Rent Stabilization and Arbitration

Ordinance) and has completed such work on at least 35 percent of the units intended to be converted or has expended 40 percent of the total sum budgeted for said work; (3) The owner or operator or previous owner or operator shall have clearly demonstrated his/her intention to convert all of the residential units in the subject building to tourist units as of November 23, 1979. Satisfactory evidence of intention to convert may be demonstrated by the following factors, including but not limited to: (A) Whether an architect has been engaged to prepare plans and specifications; or (B) Whether applications for construction work have been received; or (C) Whether applications for the necessary permits have been submitted to all relevant city departments; or (D) Whether a building permit has been issued. (4) Each permanent resident displaced by the conversion is offered relocation assistance as set forth in Section 41.17(b) below; and (5) For each vacant residential unit converted, but not occupied by a permanent resident, a sum of $250 per unit not to exceed a total of $10,000 shall be deposited in the San Francisco Residential Hotel Preservation Account of the Repair and Demolition Fund established pursuant to Section 203.1 of the San Francisco Building Code (being Chapter 1, Article 2, Part II of the San Francisco Municipal Code) to be used exclusively for the repair, purchase and rehabilitation of residential hotel units by agencies of the City and County of San Francisco and to be administered by the Department of Public Works. (d) Consistent with Planning Code Section 183, any unit deemed to be a tourist unit which has remained continuously vacant for three years following the zoning change in a zoning district not allowing tourist hotels shall lose its nonconforming status, and may be opened only for residential hotel or group housing uses. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001)

(a) Initial Unit Usage Report. Within 90 days of the adoption of this amended Chapter, the Department of Building Inspection shall notify all nonprofit organizations operating hotels that the nonprofit organization must comply with the Initial Status Determination provisions of Section 41.6 herein. (b) Annual Unit Usage Report. All nonprofit organizations operating hotels with residential units shall comply with the provisions of Section 41.10 herein in the event that the status of the units in the hotel changes from the designation contained in the Initial Unit Usage Report. (c) One-for-One Replacement. If a nonprofit organization seeks to demolish residential units or remove residential units from housing use, or sells or otherwise transfers the building containing residential use, it shall comply with the provisions of Section 41.13 of this Chapter. (d) Applicability of this Chapter. This chapter shall not apply to a hotel which has a certificate of use for all residential units but contained no permanent residents on September 23, 1979, provided that the hotel is owned, leased or operated by a nonprofit organization at the time this exemption is sought. The owner, operator or lessee of such a hotel must file with the Director of the Department of Building Inspection evidence to support such exemption. If the exemption is approved, the Director shall issue a certificate of use designating all the hotel's units as tourist units; provided, however, that the certificate shall not be issued until the hotel owner, operator or lessee has paid any penalties imposed under Section 41.6(e) or Section 41.10(f) or (g), or released any liens imposed under Section 41.20(d). (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001)

(a) Daily Log. Each residential hotel shall maintain a daily log containing the status of each room, whether it is occupied or vacant, whether it is used as a residential unit or tourist unit, the name under which each adult occupant is registered, and the amount of rent charged. Each hotel shall also provide receipts to each adult occupant, and maintain copies of the receipts, showing: the room number; the name of each adult occupant; the rental amount and period paid for; and any associated charges imposed and paid, including but not limited to security deposits and any tax. The daily log and copies of rent receipts shall be available for inspection pursuant to Section 41.11(c) of this Chapter 41 upon demand by the Director of the Department of Building Inspection or the Director’s designee or the City Attorney’s Office between the hours of 9 a.m. and 5 p.m., Monday through Friday unless the Director of the Department of Building Inspection or the City Attorney’s Office reasonably believe that further enforcement efforts are necessary for specified residential hotels, in which case the Department of Building Inspection or the City Attorney’s Office shall notify the hotel owner or operator that the daily logs and copies of rent receipts shall be available for inspection between the hours of 9 a.m. and 7 p.m. Each hotel shall maintain the daily logs and copies of rent receipts for a period of no less than 24 months. Should an owner or operator object to providing records for

inspection, the Director of the Department of Building Inspection shall have the authority to issue administrative subpoenas to investigate and enforce this Chapter’s provisions. In addition to the investigative powers and enforcement mechanisms prescribed in this Chapter, the City Attorney’s Office shall have the authority to take further investigative action and bring additional enforcement proceedings including proceedings under California Civil Code Section 1940.1. (b) Weekly Report. Following the initial determination, an owner or operator of residential units shall post on each Monday before 12 noon the following information: (1) The number of tourist units to which the owner or operator is currently entitled and the date the certificate of use was last issued; (2) The number of guest rooms which were used as tourist units each day of the preceding week. Evidence of compliance with requirements imposed hereunder shall be preserved by the owner or operator for a period of not less than two years after each posting is required to be made. The owner or operator shall permit the Director of the Department of Building Inspection or his designee to inspect the hotel records and other supporting evidence to determine the accuracy of the information posted. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001; Ord. 195-05, File No. 051031, App. 7/29/2005; Ord. 38-17,* File No. 161291, App. 2/17/2017, Eff. 3/19/2017; Ord. 56-20, File No. 191258, App. 4/10/2020, Eff. 5/11/2020) *Editor’s Note: Ord. 56-20 repealed Ord. 38-17, restoring the text of this Section as it existed prior to adoption of that ordinance, and then enacted amendments to that text.

(a) Filing. On November 1 of each year, every hotel owner or operator subject to this Chapter 41 shall file under penalty of perjury with the Department of Building Inspection, either through an online form on the Department’s website or a paper copy delivered to the Department, an Annual Unit Usage Report containing the following information: (1) The total number of units in the hotel as of October 15 of the year of filing; (2) The number of residential and tourist units as of October 15 of the year of filing; (3) The number of vacant residential units as of October 15 of the year of filing; if more than 50% of the units are vacant, an explanation why; (4) The average rent for the residential hotel units as of October 15 of the year of filing; (5) The number of residential units rented by week or month as of October 15 of the year of filing; and (6) The designation by room number and location of the residential units and tourist units as of October 15 of the year of filing, along with a graphic floorplan reflecting room designations for each floor. The owner or operator shall maintain such designated units as tourist or residential units for the following year unless the owner or operator notifies in writing the Department of Building Inspection of a redesignation of units; the owner or operator may redesignate units throughout the year, provided they notify the Department of Building Inspection in writing by the next business day following such redesignation, and update the graphic floorplan on file with the Department of Building Inspection and maintain the proper number of residential and tourist units at all times. The purpose of this provision is to simplify enforcement efforts while providing the owner or operator with reasonable and sufficient flexibility in designation and renting of rooms; (7) The nature of services provided to the permanent residents and whether there has been an increase or decrease in the services so provided; (8) A copy of the Daily Log, showing the number of units which are residential, tourist, or vacant on the first Friday of each month of the year of filing. (b) Notice of Annual Unit Usage Report. On the day of filing, the owner or operator shall post a notice that a copy of the Annual Unit Usage Report submitted to the Department of Building Inspection is available for inspection between the hours of 9:00 a.m. and 5:00 p.m. Monday through Friday, which notice shall remain posted for 30 days. The Department shall maintain a list of those properties that have filed or failed to submit annual reports on its website. (c) Extension of Time for Filing. Upon application by an owner or operator and upon showing good cause therefor, the Director of the Department of Building Inspection may grant one extension of time not to exceed 30 days for said filing. (d) Certificate of Annual Unit Usage Report. After receipt of a completed Annual Unit Usage Report, the Department of Building Inspection shall issue a certified acknowledgment of receipt. (e) Renewal of Hotel License and Issuance of New Certificate of Use. As of the effective date of this Chapter 41, no hotel license may be issued to any owner or operator of a hotel unless the owner or operator presents with the license application a certified acknowledgment of receipt from the Department of Building Inspection of the Annual Unit Usage Report for the upcoming year. (f) Insufficient Filing; Penalties. The Director of the Department of Building Inspection is authorized to assess a penalty as set forth below for insufficient filing, with interest on the penalty accruing at the rate of 1.5% per full month, compounded monthly from the date

the penalty is due as stated in the Director’s written notification below. If the Director or the Director’s designee determines that additional information is needed to make a determination, the Director or designee shall send both the owner and operator a written request to furnish such information within 15 calendar days of the mailing of the written request. The letter shall state that if the requested information, or a response explaining why the requested information will not be provided, is not furnished in the time required, the residential and tourist units shall be presumed to be unchanged from the previous year and that the Director shall impose a $500 penalty for failure to furnish the additional information within the 15-day period, and a $500 penalty for each day after the 15-day period for which the owner or operator fails to furnish the requested information or explanation. If the Director does not timely receive the information, the Director shall notify both the owner and operator, by mail or electronic mail, that the Director is imposing a $500 per day penalty and that the accumulated penalty must be paid within 30 days of the mailing of the notification, and that interest on the penalty shall accrue from the expiration of the 30 days at the rate of 1.5% per full month, compounded monthly. The written notification shall state that if the penalty is not paid, a lien to secure the amount of the penalty, plus the accrued interest, will be recorded against the real property pursuant to the provisions of Section 41.20(d) of this Chapter 41, and that the Residential Hotel will be not be eligible for any temporary tourist rentals as provided in Section 41.19 for 12 months. (g) Failure to File Annual Unit Usage Report; Penalties. The Director of the Department of Building Inspection is authorized to assess penalties as set forth below for failure to file an Annual Unit Usage Report, with interest on penalties accruing at the rate of 1.5% per full month, compounded monthly from the date the penalty is due as stated in the Director’s notification below. If the owner or operator fails to file an Annual Unit Usage Report, the Director or the Director’s designee shall notify the owner and operator by registered or certified mail and shall post a notice informing the owner and operator that unless submission of the Annual Unit Usage Report and application for renewal of the hotel license is made within 15 calendar days of the mailing of the letter, the residential and tourist units shall be presumed to be unchanged from the previous year, and the Director shall impose a penalty of $1,000 per month for each month the annual report is not filed and the Residential Hotel will be not be eligible1 for any temporary tourist rentals as provided in Section 41.19 for the next 12 months. If the Director does not receive the report, the Director shall notify both the owner and operator by mail that the Director is imposing the appropriate penalty, as prorated, which must be paid within 30 days of the mailing of the notification and that interest on the penalty shall accrue from the expiration of the 30 days at the rate of 1.5% per full month, compounded monthly. The written notification shall state that if the penalty is not paid, a lien to secure the amount of the penalty, plus the accrued interest, will be recorded against the real property pursuant to the provisions of Section 41.20(d) of this Chapter 41. (h) Appeal of Annual Usage Determination. An owner or operator may appeal the annual unit usage determination by the Director of the Department of Building Inspection provided that there was no challenge pursuant to the provisions of subsection (i) below, and further provided that an appeal is filed within 20 calendar days from the date of annual unit usage determination. If an appeal is filed, a copy of the notice of appeal shall be posted by the owner or operator and a hearing pursuant to the provisions of Section 41.11(b) shall be scheduled. (i) Challenge; Standing; Statute of Limitation. Any interested party may file a challenge to the information contained in the annual unit usage report filed by the owner or operator provided that such a challenge is in writing and is submitted within 30 calendar days from the date the report to the Department of Building Inspection is filed. Upon receipt of a challenge, a hearing pursuant to the provisions of Section 41.11(b) shall be scheduled. The owner or operator shall have the burden of proving by a preponderance of evidence that the information filed is correct. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001; Ord. 38-17,* File No. 161291, App. 2/17/2017, Eff. 3/19/2017; Ord. 56-20, File No. 191258, App. 4/10/2020, Eff. 5/11/2020) CODIFICATION NOTE

1. So in Ord. 56-20. *Editor’s Note: Ord. 56-20 repealed Ord. 38-17, restoring the text of this Section as it existed prior to adoption of that ordinance, and then enacted amendments to that text.

(a) Fees. The owner or operator shall pay the filing fees to the Department of Building Inspection to cover its costs of investigating and reporting on eligibility, as set forth in.1 Section 110A, Hotel Conversion Ordinance Fee Schedule, Table 1A-Q, of the Building Code. Further, the party that brings an unsuccessful challenge to a report pursuant to this Chapter 41 shall be liable for the charge in Section 110A, Hotel Conversion Ordinance Fee Schedule, Unsuccessful Challenge, Table 1A-Q of the Building Code. Fees shall be waived for an individual who files an affidavit under penalty of perjury stating that he or she is an indigent person who cannot pay the filing fee without using money needed for the necessities of life. (b) Hearing. (1) Notice of Hearing. Whenever a hearing is required or requested under this Chapter 41, the Director of the Department of Building Inspection shall, within 45 calendar days, notify the owner or operator of the date, time, place, and nature of the hearing by registered or certified mail. The Director of the Department of Building Inspection shall appoint a hearing officer. Notice of such a hearing shall be posted by the Department of Building Inspection. The owner or operator shall state under oath at the hearing that the notice remained posted for at least 10 calendar days prior to the hearing. Said notice shall state that all permanent residents residing in the hotel may appear and testify at the public hearing, provided that the Department of Building Inspection is notified of such an intent 72

hours prior to the hearing date. (2) Pre-hearing Submission. No less than three working days prior to any hearing, parties to the hearing shall submit written information to the Department of Building Inspection including, but not limited to, the following: the request or complaint, the statement of issues to be determined by the Hearing Officer; and a statement of the evidence upon which the request or complaint is based. (3) Hearing Procedure. If more than one hearing for the same hotel is required, the Director of the Department of Building Inspection shall consolidate all of the appeals and challenges into one hearing; however, if a civil action has been filed pursuant to Section 41.20(e) of Chapter 41, all hearings on administrative complaints of unlawful conversions involving the same hotel shall be abated until such time as final judgment has been entered in the civil action; an interested party may file a complaint in intervention. The hearing shall be tape recorded. Any party to the appeal may, at his/her own expense, cause the hearing to be recorded by a certified court reporter. The hearing officer is empowered to issue subpoenas upon application of the parties seven calendar days prior to the date of the hearing. During the hearing, evidence and testimony may be presented to the hearing officer. Parties to the hearing may be represented by counsel and have the right to cross-examine witnesses. All testimony shall be given under oath. Written decision and findings shall be rendered by the hearing officer within 20 working days of the hearing. Copies of the findings and decision shall be served upon the parties to the hearing by registered or certified mail. A notice that a copy of the findings and decisions is available for inspection between the hours of 9:00 a.m. and 5:00 p.m. Monday through Friday shall be posted by the owner or operator. (4) Administrative Review. Unless otherwise expressly provided in this Chapter 41, any decision of the hearing officer shall be final unless a valid written appeal is filed with the Board of Appeals within 15 days following the date of the hearing officer’s written determination. Such an appeal may be taken by any interested party as defined by Section 41.4 herein. (c) Inspection. The Director of the Department of Building Inspection shall have the authority to issue administrative subpoenas as necessary or appropriate to conduct inspections pursuant to this Chapter 41. The Director of the Department of Building Inspection shall conduct, from time to time, on-site inspections of the daily logs, other supporting documents, including the graphic floorplan, and units listed as vacant in the daily logs, to determine if the owner or operator has complied with the provisions of this Chapter. In addition, the Director of the Department of Building Inspection or the Director’s designee shall conduct such an inspection as soon as practicable upon the request of a current or former occupant of the hotel. If, upon such an inspection, the Director or Director’s designee determines that an apparent violation of the provisions of this Chapter has occurred, the Director or designee shall post a notice of apparent violation informing the permanent residents of the hotel thereof, or shall take action as set forth in Section 41.11(d) and (e) below. This notice shall remain posted until the Director of the Department of Building Inspection, or the Director’s designee, determines that the hotel is no longer in violation of the provisions of this Chapter. (d) Criminal Penalties for Violations. Any person or entity wilfully failing to maintain daily logs or provide and maintain receipts as provided in Sections 41.9(a) and (b) of this Chapter 41, or failing to post materials as provided in Sections 41.6(a), (c), (d), and (f), 41.9(b), 41.10(b), (g), and (h), 41.11(b) (3), 41.12(b)(10), and 41.18(b) and (c) of this Chapter or wilfully providing false information in the daily logs, shall be guilty of an infraction for the first such violation or a misdemeanor for any subsequent violation, and the complaint charging such violation shall specify whether the violation charged is a misdemeanor or an infraction. If charged as an infraction, the penalty upon conviction therefor shall be not less than $100 or more than $500. If charged as a misdemeanor, the penalty upon conviction therefor shall be a fine of not less than $500 or more than $1,000 or imprisonment in the county jail, not exceeding six months, or both fine and imprisonment. Every day such violation shall continue shall be considered as a new offense. For purposes of Sections 41.11(d) and (e), violation shall include, but not limited to, intentional disobedience, omission, failure or refusal to comply with any requirement imposed by the aforementioned Sections or with any notice or order of the Director of the Department of Building Inspection or the Director of Public Works regarding a violation of this Chapter. (e) False Information Misdemeanor. It shall be unlawful for an owner or operator to wilfully provide false information to the Director of the Department of Building Inspection or the Director’s designees. Any owner or operator who files false information shall be guilty of a misdemeanor. Conviction of a misdemeanor hereunder shall be punishable by a fine of not more than $500 or by imprisonment in the County Jail for a period not to exceed six months, or by both. (f) The Director of the Department of Building Inspection may impose a penalty of $500 per violation for failure to maintain daily logs or for failure to maintain and provide receipts to occupants as required under Section 41.9 above and for failure to post materials as required under Sections 41.6(a), (c), (d), and (f), 41.9(b), 41.10(b), (g), and (h), 41.11(b) (3), 41.12(b)(10), and 41.18(b) and (c). In order to impose such penalties, the Director shall notify both the owner and oper

violation for failure to maintain daily logs or for failure to maintain and provide receipts to occupants as required under Section 41.9 above and for failure to post materials as required under Sections 41.6(a), (c), (d), and (f), 41.9(b), 41.10(b), (g), and (h), 41.11(b) (3), 41.12(b)(10), and 41.18(b) and (c). In order to impose such penalties, the Director shall notify both the owner and operator by certified mail that the Director is imposing the penalty or penalties, which must be paid within 30 days of the mailing of the notification. The written notification shall state that if the penalty is not paid, a lien to secure the amount of the penalty will be recorded against the real property pursuant to Section 41.20(d) of this Chapter 41. (g) Costs of Enforcement. The Department of Building Inspection shall be entitled to recover costs for enforcement as provided in Building Code Section 102A.7(d). (h) Inspection of Records. The Department of Building Inspection shall maintain a file for each residential hotel which shall contain copies of all applications, exemptions, permits, reports, and decisions filed pursuant to the provisions of this Chapter 41. All documents maintained in said files, except for all tax returns and documents specifically exempted from the California Public Records Act, shall be made available for public inspection and copying. (i) Promulgation of Rules and Regulations. The Director of the Department of Building Inspection shall propose rules and regulations governing the appointment of an administrative officer and the administration and enforcement of this Chapter 41. After reasonable notice and opportunity to submit written comment are given, final rules and regulations shall be promulgated.

(Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001; Ord. 38-17,* File No. 161291, App. 2/17/2017, Eff. 3/19/2017; Ord. 56-20, File No. 191258, App. 4/10/2020, Eff. 5/11/2020) CODIFICATION NOTE

1. So in Ord. 56-20. *Editor’s Note: Ord. 56-20 repealed Ord. 38-17, restoring the text of this Section as it existed prior to adoption of that ordinance, and then enacted amendments to that text.

(a) Any owner or operator, or his/her authorized agent, of a residential hotel may apply for a permit to convert one or more residential units by submitting an application and the required fee to the Central Permit Bureau. (b) The permit application shall contain the following information: (1) The name and address of the building in which the conversions are proposed and of the building where replacement housing will be located; and (2) The names and addresses of all owners or operators of said buildings; and (3) A description of the proposed conversion including the specific method under Section 41.13(a) that the owner or operator selects as the nature of the conversion, the total number of units in the building, and their current uses; and (4) The room numbers and locations of the units to be converted; and (5) Preliminary drawings showing the existing floor plans and proposed floor plans; and (6) A description of the improvements or changes proposed to be constructed or installed and the tentative schedule for start of construction; and (7) The current rental rates for each residential unit to be converted or, if currently unoccupied, the most recent rental rate when last occupied; and (8) The length of tenancy of the permanent residents affected by the proposed conversion; and (9) A statement regarding how one-for-one replacement of the units to be converted will be accomplished, citing the specific provision(s) of Section 41.13(a) the application has selected for replacement, and including sufficiently detailed financial information, such as letters of intent and contracts, establishing how the owner or operator is constructing or causing to construct replacement housing if replacement is to be provided off-site; and (10) A declaration under penalty of perjury from the owner or operator stating that he/she has complied with the provisions of Section 41.14(b) below and his/her filing of a permit to convert. On the same date of the filing of the application, a notice that an application to convert has been filed shall be posted until a decision is made on the application to convert. (c) Upon receipt of a completed application to convert or demolish, the Department of Building Inspection shall send the application to the Planning Department for review and shall mail notice of such application to interested community organizations and such other persons or organizations who have previously requested such notice in writing. The notice shall identify the hotel requesting the permit, the nature of the permit, the proposal to fulfill the replacement requirements of Section 41.13 herein, and the procedures for requesting a public hearing. The owner or operator shall post a notice informing permanent residents of such information upon submission of a complete application. (d) Any interested party may submit a written request within 20 days of the date that the Department of Building Inspection mailed the notice pursuant to subsection (c) above to the Planning Commission to schedule and conduct a public hearing on the proposed conversion in order to solicit public opinion on whether to approve or deny a permit to convert or demolish residential units and to determine whether proposed replacement units are “comparable units” as defined in Section 41.4 herein. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001; Ord. 38-17,* File No. 161291, App. 2/17/2017, Eff. 3/19/2017; Ord. 56-20, File No. 191258, App. 4/10/2020, Eff. 5/11/2020) *Editor’s Note: Ord. 56-20 repealed Ord. 38-17, restoring the text of this Section as it existed prior to adoption of that ordinance, and then enacted amendments to that text.

(a) Prior to the issuance of a permit to convert, the owner or operator shall provide one-for-one replacement of the units to be converted by one of the following methods:

(1) Construct or cause to be constructed a comparable unit to be made available at comparable rent to replace each of the units to be converted; or (2) Cause to be brought back into the housing market a comparable unit from any building which was not subject to the provisions of this Chapter 41; or (3) Construct or cause to be constructed or rehabilitated apartment units for elderly, disabled, or low-income persons or households which may be provided at a ratio of less than one-to-one; or construct or cause to be constructed transitional housing which may include emergency housing. The construction of any replacement housing under this subsection shall be subject to restrictions recorded against title to the real property and be evaluated by the Planning Commission in accordance with the provisions of Section 303 of the Planning Code. A notice of said Planning Commission hearing shall be posted by the owner or operator 10 calendar days before the hearing; or (4) Pay to the City and County of San Francisco an amount equal to 80% of the cost of construction of an equal number of comparable units plus site acquisition cost. All such payments shall go into a San Francisco Residential Hotel Preservation Fund Account. The Department of Real Estate shall determine this amount based upon two independent appraisals; or (5) Contribute to a public entity or nonprofit organization, which will use the funds to construct comparable units, an amount at least equal to 80% of the cost of construction of an equal number of comparable units plus site acquisition cost. The Department of Real Estate shall determine this amount based upon two independent appraisals. In addition to compliance with all relevant City ordinances and regulations, the public entity or nonprofit organization and the housing development proposal of such public entity or nonprofit organization shall be subject to approval by the Mayor’s Office of Housing and Community Development. (A) Such contribution shall be paid to the approved public entity or nonprofit organization in installments from an escrow account supervised by the Mayor’s Office of Housing, upon application by such public entity or nonprofit organization to the Mayor’s Office of Housing, for specified expenditures, including but not limited to site acquisition costs, architect’s fees, and construction costs; such payment shall be approved by the Mayor’s Office of Housing prior to release of funds. (B) The permit to convert shall be issued by the City when owner or operator deposits the full amount of funds in an escrow account described in subsection 41.13(a)(5)(A) above, or provides other form of nonrefundable security acceptable to the City Attorney and the Mayor’s Office of Housing. (C) In the event that the public entity or nonprofit organization is unable to complete construction of the replacement housing, any unpaid amounts shall be released to the City. All such funds shall go into a San Francisco Residential Hotel Preservation Fund Account. (b) Any displaced permanent resident relocated to replacement units provided under Subdivision (a) above shall be deemed to have continued his occupancy in the converted unit for the purpose of administering Subsection (k) of Section 37.2, San Francisco Administrative Code (San Francisco Rent Stabilization and Arbitration Ordinance). (c) Any replacement units shall continue to be subject to the provisions of this Chapter. (d) In the event that a completed application for a permit to convert is filed by a hotel owner or operator no later than the effective date of this amended Chapter, and such hotel owner or operator elects to provide one-for-one replacement of the residential units pursuant to Section 41.13(a) (4) or Section 41.13(a) (5) herein, the hotel owner or operator shall be obligated to pay to the City and County of San Francisco an amount equal to 40 percent of the cost of construction of an equal number of comparable units plus site acquisition cost, provided that such hotel owner or operator shall pay such amount to the City or provide to the City security for such payment in a form satisfactory to the Mayor’s Office of Housing and the City Attorney within 90 days following the date that the Department of Building Inspection determines that the application for a permit to convert is complete, or, if necessary, 10 days following final action, including any appeals, by the Planning Commission or appellate body, or 10 days following the Department of Real Estate’s determination of such amount, whichever occurs latest. In the event that a hotel owner or operator elects to provide one-for-one replacement pursuant to Section 41.13(a)(2) or (a)(5) herein and the Mayor’s Office of Housing has not approved a proposal or organization thereunder prior to the effective date of this amended Chapter, the Department of Building Inspection shall not reject such application as incomplete for such lack of information. If a hotel owner or operator applies for a permit to convert using the one-for-one replacement option described in 41.13(a)(2) or (a)(5) and the Mayor’s Office of Housing does not approve a housing development proposal or a nonprofit organization, or such project fails to progress through no fault of the owner or operator, such applicant shall be permitted to provide one-for-one replacement pursuant to Section 41.13 (a)(4) at 40 percent of the cost of construction of an equal number of comparable units plus site acquisition costs, provided that such applicant files the application under Section 41.13(a)(2) or (a) (5) no later than the effective date of this amended Chapter. The hotel owner or operator shall identify such housing proposal or nonprofit organization within 180 days of the effective date of this amended Chapter. In the event that the Mayor’s Office of Housing finds that the permit applicant has acted in good faith in seeking

uch applicant files the application under Section 41.13(a)(2) or (a) (5) no later than the effective date of this amended Chapter. The hotel owner or operator shall identify such housing proposal or nonprofit organization within 180 days of the effective date of this amended Chapter. In the event that the Mayor’s Office of Housing finds that the permit applicant has acted in good faith in seeking a project, the Mayor’s Office of Housing may exercise its reasonable discretion to extend the provisions of this subsection for an additional 180 days. In the event that a project approved by the Mayor’s Office of Housing fails to move forward through no fault of the permit applicant, the applicant may substitute another project within six months of being notified by the Mayor’s Office of Housing of a failure of the prior project to move forward. The Mayor’s Office of Housing may extend this period for an additional 180 days to identify such new proposal. The City shall issue a permit to convert under this subsection 41.13(d) only if the hotel owner or operator has either paid the 40-percent in lieu fee to the City pursuant to Section 41.13(a)(4) herein or complied with the requirements of Sections 41.13(a)(2) or (a)(5) as applicable. In the event that a hotel owner or operator has not complied with any of these requirements and the City has not issued a permit to convert or if the Mayor’s Office of Housing has not found the hotel owner or operator has acted in good faith in seeking a project pursuant to subsections 41.13(a)(2) or (a) (5) or this subsection, no later than 180 days following the effective date of this amended Chapter, or such later date as herein provided, this Subsection 41.13(d) shall no longer be applicable, City shall refund any amounts deposited as security pursuant to the terms herein, and such hotel owner or operator shall comply with all applicable terms of this Chapter. (e) When a residential unit is approved for conversion to another use pursuant to the provisions of Subsection 41.13(a)(2), (a)(4) or

(a)(5) above, such unit shall not be deemed to be reconverted into a residential unit regardless of any interim uses after payment as set forth in Subsections 41.13(a)(2), (a)(4) or (a)(5). (f) The funds deposited in the Residential Hotel Preservation Fund may be used to (i) create new affordable rental housing to replace the affordable housing lost as a result of the conversion or demolition of residential hotel units subject to this Ordinance and (ii) defend the Ordinance against legal challenge, including the legal costs and attorney’s fees incurred in the defense. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001; Ord. 46-05, File No. 050133, App. 3/23/2005; Ord. 38-17,* File No. 161291, App. 2/17/2017, Eff. 3/19/2017; Ord. 56-20, File No. 191258, App. 4/10/2020, Eff. 5/11/2020) *Editor’s Note: Ord. 56-20 repealed Ord. 38-17, restoring the text of this Section as it existed prior to adoption of that ordinance, and then enacted amendments to that text.

A permit to convert shall be denied by Director of the Department of Building Inspection if: (a) The requirements of Sections 41.12 or 41.13, above, have not been fully complied with; (b) The application is incomplete or contains incorrect information; (c) An applicant has committed unlawful action as defined in this Chapter 41 within 12 months prior to the filing of a permit to convert application; or (d) The proposed conversion or the use to which the unit would be converted is not permitted by the Planning Code. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001; Ord. 38-17,* File No. 161291, App. 2/17/2017, Eff. 3/19/2017; Ord. 56-20, File No. 191258, App. 4/10/2020, Eff. 5/11/2020) *Editor’s Note: Ord. 56-20 repealed Ord. 38-17, restoring the text of this Section as it existed prior to adoption of that ordinance, and then enacted amendments to that text.

The Director of the Department of Building Inspection shall issue a permit to convert, provided that: (a) The requirements of Section 41.12 have been met; (b) Evidence of compliance with the requirements of Section 41.13 has been submitted. Satisfactory evidence of compliance may be: (1) A certification of final completion or permit of occupancy on the replacement housing; or (2) A receipt from the City Treasurer that the in-lieu payment determined by the Department of Real Estate has been received; and (3) Evidence of compliance with the requirements of Section 41.17 herein. (c) The proposed conversion or the use to which the unit would be converted is permitted by the City Planning Code. (d) Concurrent with the issuance of a permit to convert, the Director of the Department of Building Inspection shall issue a new certificate of use which shall state the newly certified number of residential units and tourist units. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001)

(a) Denial or approval of a permit application may be appealed to the Board of Permit Appeals, pursuant to Sections 8 et seq. Part III of the San Francisco Municipal Code. (b) The owner or operator shall submit a statement under the penalty of perjury that he has notified all the affected permanent residents of his appeal and of the date, time and place of the hearing before the Board of Permit Appeals, seven calendar days prior to the scheduled hearing. (c) The appellant shall have the burden of proving that the determination of the Director of the Department of Building Inspection is invalid.

(Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001)

(a) To apply for a permit to convert, an owner or operator of the hotel shall do the following: (1) Any interested community organization and all permanent residents residing in said building at the time of an application for a permit to convert and thereafter shall be timely informed of all public hearings and administrative decisions concerning said conversion; said notice shall be posted by the owner or operator; (2) A permanent resident has the right to occupy his/her residential unit for 60 calendar days from the issuance of the permit to convert; (3) Owner or operator shall offer a permanent resident available comparable units in the building, or to any replacement housing provided pursuant to Subsection 41.13(a)(1) or (2); (4) All displaced permanent residents are entitled to relocation assistance as provided for in subsection (b) below; (5) Seven calendar days prior to the filing of an application for a permit to convert, the owner or operator shall notify, in writing, by personal service, or registered or certified mail, every permanent resident affected by the proposed conversion of his/her intent to convert designated units; (6) The notification required by Subsection (5) above shall also inform the permanent residents of their rights under Subsections (1) through (4) above. (b) Relocation Assistance. (1) A permanent resident, who as a result of the conversion of his/her unit must relocate off site, shall be reimbursed the actual moving expenses not to exceed $300 or may consent to be moved by the owner or operator. (2) A displaced permanent resident shall have the right of first refusal for the rental or leasing of replacement units, if any, provided pursuant to the provisions of Sections 41.13(a)(1) or 41.13(a)(2). (3) A permanent resident displaced by partially completed conversion under the provisions of Section 41.7(c) shall be entitled to a displacement allowance of $1,000 per displaced person. (Added by Ord. 121-90, App. 4/12/90)

(a) This section shall apply only to demolition of residential hotel buildings pursuant to an abatement order of the Director of Public Works or the Superior Court of the State of California, or demolition necessitated by major fires, natural causes or accidents where the cost of repair exceeds 50 percent of the replacement value of the building. (b) Upon submission of an application for a demolition permit, the owner or operator shall post a copy of said application. (c) Upon notification by the Central Permit Bureau that a demolition permit has been issued, the owner or operator shall post a notice explaining the procedure for challenging the issuance of the demolition permit to the Board of Permit Appeals. (d) When issued a demolition permit, the owner or operator shall provide a written notice of the demolition within 10 calendar days of issuance of the permit to each residential permanent resident. Each permanent resident shall be notified in writing of his/her rights to relocation assistance and to occupy the same unit for a period of up to 60 days after issuance of the demolition permit. (e) The subsequent issuance of a building permit for construction on the demolished site shall be conditioned on the owner or operator's agreement to replace, on a one-for-one basis, the demolished residential units as required by the provisions of Section 41.13. No building permit shall be issued until owner or operator complies with the provisions of Section 41.13. (f) The conditions for issuance of a demolition permit set forth in subsection (e) above shall be recorded by the owner at the time of issuance of the demolition permit in order to provide notice of said conditions to all subsequent purchasers and interested parties. (Added by Ord. 121-90, App. 4/12/90)

(a) Temporary Change of Occupancy. (1) A tourist unit may be rented to a permanent resident, until voluntary vacation of that unit by the permanent resident or upon eviction for cause, without changing the legal status of that unit as a tourist unit. (2) A permanent resident may be relocated for up to 21 days to another unit in the residential hotel for purposes of complying with the Building Code requirements imposed by the UMB Seismic Retrofit Ordinance, Ordinance No. 219-92, without changing the designation of the unit. (3) A residential unit which is vacant at any time during the period commencing on May 1 and ending on September 30 annually may be rented as a tourist unit, provided that the owner or operator establishes, and the Department of Building Inspection confirms, that: (A) the residential unit was vacant due to voluntary vacation of a permanent resident or due to lawful eviction for cause after the permanent resident was accorded all the rights guaranteed by State and local laws during his/her tenancy, (B) the residential unit was legally occupied for at least 50% of the period commencing on October 1 and ending on April 30 of the previous year, unless owner or operator can produce evidence to the Department of Building Inspection explaining such vacancy to the satisfaction of the Department, including but not limited to such factors as repair or rehabilitation work performed in the unit or good-faith efforts to rent the unit at fair market value; (C) the residential unit shall immediately revert to residential use upon application of a prospective permanent resident; and (D) the owner or operator has not committed unlawful action as defined in this Chapter 41 within 12 months prior to this request. 25-percent Limit. However, at no time during the period commencing on May 1 and ending on September 30 may an owner or operator rent for nonresidential use or tourist use more than 25% of the hotel’s total residential units unless the owner or operator can demonstrate that (A) the requirements of Section 41.19(a)(3) above are met, and (B) good-faith efforts were made to rent such units to prospective permanent residents at fair market value for comparable units and that such efforts failed. Owners or operators who seek to exceed this limit must request a hearing pursuant to Section 41.11(b) above and the decision whether to permit owners or operators to exceed this limit is within the discretion of the hearing officer. (b) Special Requirements for Hearings on Tourist Season Rental of Residential Units. Where an owner or operator seeks a hearing in order to exceed the limit on tourist season rental of vacant residential units pursuant to Section 41.19(a)(3), the requirements of Section 41.11(b)(1), (b)(2), and (b)(3) above shall be applicable except as specifically modified or enlarged herein: (1) Notice of Hearing. Notice of hearing as provided in Section 41.11(b)(1) above shall be given within 15 calendar days. The notice requirements for the owner or operator shall also be applicable to any interested party who has submitted a prior written request to the Director of the Department of Building Inspection to be notified of such hearings. (2) Time of Hearing. The hearing shall be held within 30 days of the submission of the owner or operator's written request for hearing. (3) Burden of Proof. Burden of proof is on the owner or operator. (4) Interested Party. Any interested party shall be deemed a "party to the hearing" for purposes of Section 41.11(b)(1). (5) Determination of the Hearing Officer. Based upon the evidence presented at the hearing, conducted in accordance with Section 41.11(b)(3) above, the hearing officer shall make findings as to (A) whether the residential unit was vacant due to voluntary vacation of a permanent resident or was vacant due to lawful eviction, (B) whether the residential unit was occupied for at least 50% of the period commencing on October 1st and ending on April 30 of the previous year, (C) whether the owner or operator has committed unlawful action under this Chapter 41 within 12 months prior to this request, and (D) whether the owner or operator made good-faith efforts to rent vacant residential units to prospective permanent residents at no more than fair market value for a comparable unit during the tourist season and yet was unable to secure such rentals. Good-faith efforts shall include, but not be limited to, advertising the availability of the residential units to the public. In determining fair market value of the residential units, the hearing officer shall consider any data on rental of comparable units, as defined in Section 41.4 herein. (6) Decision. The hearing officer shall render a written decision and findings within 10 working days of the hearing. (7) Effect of Decision. The hearing officer's decision shall remain in effect for the tourist season for which the owner or operator requested the hearing. If the owner or operator wishes to exceed the 25 percent limit during any subsequent tourist season, a new written request for hearing must be submitted to the Director of the Department of Building Inspection. (8) Construction. The purpose of this Section 41.19(b) is to supplement or modify provisions of Section 41.11(b) (1) through (b) (3). Unless otherwise specifically modified, all provisions of Sections 41.11(b)(1) through (b)(3) are deemed applicable to hearings concerning the tourist season limitation on rental of vacant residential units. (c) Winter Rentals. A residential unit which is vacant at any time during the period commencing on October 1st and ending on April 30th annually may be rented as a tourist unit, provided that: (1) Such owner or operator has been permitted to rent residential units as tourist units in excess of 25 percent of the residential units pursuant to Section 41.19(a)(3) above; (2)

its. (c) Winter Rentals. A residential unit which is vacant at any time during the period commencing on October 1st and ending on April 30th annually may be rented as a tourist unit, provided that: (1) Such owner or operator has been permitted to rent residential units as tourist units in excess of 25 percent of the residential units pursuant to Section 41.19(a)(3) above; (2) The owner or operator has not committed unlawful action as defined in this Chapter within 12 months prior to the time of this request; (3) A residential hotel may not rent in excess of 33 percent of the total number of residential units or 20 residential units, whichever is less, pursuant to this subsection;

(4) Applicants to temporarily convert residential units pursuant to this subsection shall submit applications to the Department of Public Works, in accordance with rules and regulations promulgated by the Department of Public Works; (5) A maximum of 60 residential units may be approved per year to be rented as tourist units or non-residential units pursuant to this Subsection 41.19(c). In the event that the number of such applications exceeds 60 residential units, the Department of Public Works shall establish a lottery system based on priority ranking where preference shall be accorded to residential hotel owner who have been eligible more frequently than other hotel owners for temporary conversion pursuant to Subsection 41.19(a)(3) above; (6) Such nonresidential use is permitted by the zoning for such residential hotel; and (7) No application for such temporary conversion shall be approved by the Department of Public Works to fill the unused portion of the 60 residential unit limitation for the previous year. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 219-92, App. 7/14/92; Ord. 134-01, File No. 001926, App. 7/6/2001; Ord. 38-17,* File No. 161291, App. 2/17/2017, Eff. 3/19/2017; Ord. 56-20, File No. 191258, App. 4/10/2020, Eff. 5/11/2020) *Editor’s Note: Ord. 56-56-2020 repealed Ord. 38-17, restoring the text of this Section as it existed prior to adoption of that ordinance, and then enacted amendments to that text.

(a) Unlawful Actions. It shall be unlawful to: (1) Change the use of, or to eliminate a residential hotel unit or to demolish a residential hotel unit except pursuant to a lawful abatement order, without first obtaining a permit to convert in accordance with the provisions of this Chapter 41; (2) Rent any residential unit for Tourist or Transient Use except as permitted by Section 41.19 of this Chapter; (3) Offer for rent for Tourist or Transient Use a residential unit except as permitted by this Chapter. (b) Hearing for Complaints of Unlawful Conversions. Upon the filing of a complaint that an unlawful conversion has occurred and payment of the required fee, the Director of the Department of Building Inspection shall schedule a hearing pursuant to Section 41.11(b). The complainant shall bear the burden of proving that a unit has been unlawfully converted. The hearing officer shall consider, among others, the following factors in determining whether a conversion has occurred: (1) Shortening of the term of an existing tenancy without the prior approval of the permanent resident; (2) Reduction of the basic services provided to a residential unit intended to lead to conversion. For the purpose of this subsection (b)(2), basic services are defined as access to common areas and facilities, food service, housekeeping services, and security; (3) Repeated failure to comply with orders of the Department of Building Inspection or the Department of Public Health to correct code violations with intent to cause the permanent residents to voluntarily vacate the premises; (4) Repeated citations by the Director of the Department of Building Inspection or the Department of Public Health for Code violations; (5) Offer of the residential units for nonresidential use or tourist use except as permitted in this Chapter 41; (6) Eviction or attempts to evict a permanent resident from a residential hotel on grounds other than those specified in Sections 37.9(a)(1) through 37.9(a)(8) of the Administrative Code except where a permit to convert has been issued; and (7) Repeated posting by the Director of the Department of Building Inspection of notices of apparent violations of this Chapter 41 pursuant to Section 41.11(c) above. (c) Civil Penalties. Where the hearing officer finds that an unlawful conversion has occurred, the Director of the Department of Building Inspection shall impose a civil penalty of up to $500 per day for each unlawfully converted unit from the day the complaint is filed until such time as the unit reverts to its authorized use, for the first unlawful conversion at a Residential Hotel within a calendar year. For the second and any subsequent unlawful conversions at the same Residential Hotel within the same calendar year, the Director of the Department of Building Inspection shall impose a civil penalty of up to $750 per day for each unlawfully converted unit from the day the complaint is filed until such time as the unit reverts to its authorized use. The Director may also impose penalties upon the owner or operator of the hotel to reimburse the City or the complainant for the costs, including reasonable attorneys’ fees, of enforcement of this Chapter. The hearing officer’s decision shall notify the parties of this penalty provision and shall state that the Director of the Department of Building Inspection is authorized to impose the appropriate penalty by written notification to both the owner and operator, requesting payment within 30 days. If the penalty imposed is not paid, a lien to secure the amount of the penalty will be recorded against the real property pursuant to the provisions of Section 41.20(d) of this Chapter 41. (d) Lien Proceedings. If any penalty imposed pursuant to Sections 41.10(d), 41.10(f), 41.10(g), 41.11(f), or 41.20(c) is not received within the required time period, the Director of the Department of Building Inspection shall initiate proceedings under Article XX of Chapter 10 of the San Francisco Administrative Code to make the penalty, plus accrued interest, a lien against the real property regulated under this Chapter. Except for the release of lien recording fee authorized by Administrative Code Section 10.237, all sums collected by the Tax Collector pursuant to this ordinance shall be held in trust by the Treasurer and distributed as provided in Section 41.8(e) of this

Chapter. (e) Civil Action. An interested party may institute a civil proceeding for injunctive relief and damages. The Director of the Department of Building Inspection may institute a civil proceeding for injunctive relief. Counsel for the interested party shall notify the City Attorney's office of the City and County of San Francisco of any action filed pursuant to this Section. In determining whether an unlawful conversion has occurred, the court may consider, among other factors, those enumerated in Section 41.20(b) of this Chapter. The interested party instituting a civil proceeding, or the City suing to enforce this Chapter, if prevailing parties, shall be entitled to the costs of enforcing this Chapter, including reasonable attorney's fees, pursuant to an order of the Court. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 322-00, File No. 001917, App. 12/28/2000; Ord. 134-01, File No. 001926, App. 7/6/2001; Ord. 38-17,* File No. 161291, App. 2/17/2017, Eff. 3/19/2017; Ord. 56-20, File No. 191258, App. 4/10/2020, Eff. 5/11/2020; Ord. 36-23, File No. 220815, App. 3/24/2023, Eff. 4/24/2023) *Editor’s Note: Ord. 56-20 repealed Ord. 38-17, restoring the text of this Section as it existed prior to adoption of that ordinance, and then enacted amendments to that text.

(a) The Department of Building Inspection shall prepare and submit to the Board of Supervisors an annual status report containing the following: (1) Current data on the number of residential hotels and the number of residential units in each of the residential hotels in the City and County of San Francisco, including, to the extent feasible, information regarding rents, services provided, and violations of the City's Codes; (2) Current data on the number of residential hotel units converted pursuant to a permit to convert; (3) Current data on the number of hotel units demolished or eliminated due to code abatement proceedings and fire; (4) Current data on the number of residential hotel units illegally converted; (5) Current data on the number of replacement housing units rehabilitated or constructed; (6) A summary of the enforcement efforts by all City agencies responsible for the administration of this Chapter; and (7) An evaluation of the workability and effectiveness of the permitted temporary change of occupancy procedures and winter rentals in Section 41.19 herein; and (8) A report on expenditures from the San Francisco Residential Hotel Preservation Fund Account. (b) The Economic and Social Policy Committee of the Board of Supervisors shall conduct a hearing on the annual report submitted by the Department of Building Inspection and shall recommend appropriate actions to be taken by the Board of Supervisors. (Added by Ord. 121-90, App. 4/12/90; amended by Ord. 134-01, File No. 001926, App. 7/6/2001; Ord. 99-26, File No. 260217, App. 5/29/2026, Eff. 6/29/2026)

(a) Report of Residential Hotel Status Form. The Department of Building Inspection shall make available a Report of Residential Hotel Status Form. The form shall request information regarding the status of the Residential Hotel’s compliance with this Chapter 41 and provisions of the Building or Housing Codes including: (1) Residential Hotel Status: (A) Total number of Residential Units and Tourist Units at the Residential Hotel; (B) Unit numbers and locations of the Residential and Tourist Units; C)1 Identification of currently occupied Residential Units and their current rent rates; (D) For vacant Residential Units, the last date when a Permanent Resident occupied the units and the rent rate when last occupied; and (E) Date of last Annual Unit Usage Report. (2) Property Status: (A) Date of last inspection by the Department of Building Inspection; (B) Notices of Violations, Abatement Orders, or any other Department of Building Inspection, Fire Department, or Department of Public Health enforcement actions within the last five years; and

(C) Disabled access features installed on the property. (3) Such other information, if any, regarding compliance with this Chapter 41 and the Building or Housing Codes, as the Department of Building Inspection, in its discretion, decides to request on the form. (b) Process for Obtaining Report of Residential Hotel Status. An owner or authorized agent seeking to sell or exchange a Residential Hotel shall complete and submit a Report of Residential Hotel Status Form to the Department of Building Inspection. The Department of Building Inspection shall evaluate the information in the form, verify information that corresponds with the Department’s records, and identify and annotate any information on the form that is inconsistent with the Department’s Records. The Department shall complete its review and issue the verified and annotated form as the Report of Residential Hotel Status within 10 business days of receiving the completed form. A Report of Residential Hotel Status shall be effective for a period of one year from the date of issuance, and shall contain therein the dates of issuance and expiration. (c) Disclosure of Report of Residential Hotel Status to Buyer or Transferee. Starting 10 business days following the effective date of this Section 4.22, in addition to any applicable requirements in Chapter 3.5 of the Housing Code, prior to the sale or exchange of ownership for any Residential Hotel, the owner thereof, or their authorized agent, shall deliver a Department of Building Inspection- approved Report of Residential Hotel Status to the buyer or transferee of said Residential Hotel. (d) Receipt of Report of Residential Hotel Status. Within 30 days of purchasing or otherwise receiving title to a Residential Hotel, the buyer or transferee shall file with the Department of Building Inspection, a receipt of Report of Residential Hotel Status, on a form furnished by said Department. (Added by Ord. 99-19, File No. 170416, App. 5/24/2019, Eff. 6/24/2019) (Former Sec. 41.22 added by Ord. 121-90, App. 4/12/90; redesignated as Sec. 41.23 by Ord. 99-19, File No. 170416, App. 5/24/2019, Eff. 6/24/2019; redesignated as Sec. 41.24 by Ord. 36-23, File No. 220815, App. 3/24/2023, Eff. 4/24/2023) CODIFICATION NOTE

1. So in Ord. 99-19.

(a) A hotel owner or operator may seek a reasonable extension of the time during which the term “Tourist or Transient Use” means “any use of a guest room for less than a 7-day term of tenancy by a party other than a Permanent Resident” for a period longer than the two-year period set forth in Section 41.4, through the process described in subsections (b) and (c), below. (b) The owner or operator may initiate an extension by submitting a request to the Building Inspection Commission (“Commission”) six months prior to the expiration of the two-year period set forth in Section 41.4. Commission staff shall amply publicize this deadline, to give notice to interested hotel owners of the provisions of this Section 41.23. (c) The Commission shall consider the request at a public hearing and decide whether an extension (for the time requested, or for a different period of time) would be reasonable, according to the following factors: (1) Total cost of the hotel owner or operator’s investments in the hotel; (2) Length of time those investments have been in place; (3) Suitability of the investments for residential hotel use; and (4) Any other factors relevant to determining the owner or operator’s reasonable return on investments. (Added by Ord. 36-23, File No. 220815, App. 3/24/2023, Eff. 4/24/2023)

(a) Nothing in this Chapter may be construed to supersede any other lawfully enacted ordinance of the City and County of San Francisco, except that definitions provided in this Chapter shall govern the enforcement of this Chapter. (b) Clauses of this Chapter are declared to be severable and if any provision or clause of this Chapter or the application thereof is held to be unconstitutional or to be otherwise invalid by any court of competent jurisdiction, such invalidity shall not affect other provisions of this Chapter. (Added as Sec. 41.22 by Ord. 121-90, App. 4/12/90; ; redesignated as Sec. 41.23 by Ord. 99-19, File No. 170416, App. 5/24/2019, Eff. 6/24/2019; redesignated by Ord. 36-23, File No. 220815, App. 3/24/2023, Eff. 4/24/2023) CHAPTER 41A:

RESIDENTIAL UNIT CONVERSION AND DEMOLITION Sec. 41A.1. Title. Sec. 41A.2. Purpose. Sec. 41A.3. Findings. Sec. 41A.4. Definitions. Sec. 41A.5. Unlawful Conversion; Remedies. Sec. 41A.6. Administrative Enforcement Procedures. Sec. 41A.7. Office of Short-Term Residential Rental Administration and Enforcement. Sec. 41A.8. Construction.

This chapter shall be known as the Residential Unit Conversion Ordinance. (Added by Ord. 331-81, App. 6/26/81; amended by Ord. 224-12, File No. 120299, App. 11/1/2012, Eff. 12/1/2012)

It is the purpose of this ordinance to benefit the general public by minimizing adverse impacts on the housing supply and on persons and households of all income levels resulting from the loss of residential units through their conversion to tourist and transient use. This is to be accomplished by regulating the conversion of residential units to tourist and transient use, and through appropriate administrative and judicial remedies. (Added by Ord. 331-81, App. 6/26/81; amended by Ord. 224-12, File No. 120299, App. 11/1/2012, Eff. 12/1/2012)

The Board of Supervisors finds that: (a) There is a severe shortage of decent, safe, sanitary and affordable rental housing in the City and County of San Francisco. (b) The people of the City and County of San Francisco, cognizant of the housing shortage in San Francisco, on November 4, 1980, adopted a declaration of policy to increase the City and County's housing supply by 20,000 units. (c) Many of the City and County's elderly, disabled and low-income persons and households reside in affordable residential units. (d) As a result of the removal of residential units from the housing market, a housing emergency exists within the City and County of San Francisco for its elderly, disabled and low-income households. (e) The Board of Supervisors and the Mayor of the City and County of San Francisco recognized this housing emergency and enacted an ordinance which established a moratorium on the conversion of residential units to tourist and transient use. (f) The conversion of residential units to tourist and transient use impacts especially on persons seeking housing in the low to moderate price range. (g) It is in the public interest that conversion of residential units be regulated and that remedies be provided when unlawful conversion has occurred, in order to protect the residents and to conserve the limited housing resources. (Added by Ord. 331-81, App. 6/26/81; amended by Ord. 224-12, File No. 120299, App. 11/1/2012, Eff. 12/1/2012)

Whenever used in this Chapter 41A, the following words and phrases shall have the definitions provided in this Section: Booking Service. A Booking Service is any reservation and/or payment service provided by a person or entity that facilitates a short- term rental transaction between an Owner or Business Entity and a prospective tourist or transient user, and for which the person or entity collects or receives, directly or indirectly through an agent or intermediary, a fee in connection with the reservation and/or payment services provided for the short-term rental transaction. Business Entity. A corporation, partnership, or other legal entity that is not a natural person that owns or leases one or more residential units. Complaint. A complaint submitted to the Department alleging a violation of this Chapter 41A and that includes the Residential Unit's address, including unit number, date(s) and nature of alleged violation(s), and any available contact information for the Owner and/or resident of the Residential Unit at issue. Conversion or Convert. A change of use from Residential Use to Tourist or Transient Use, including, but not limited to, renting a Residential Unit as a Tourist or Transient Use. Department. The Planning Department. Director. The Director of the Planning Department, or his or her designee. Hosting Platform. A person or entity that participates in the short-term rental business by providing, and collecting or receiving a fee for, Booking Services through which an Owner may offer a Residential Unit for Tourist or Transient Use. Hosting Platforms usually, though not necessarily, provide Booking Services through an online platform that allows an Owner to advertise the Residential Unit through a website provided by the Hosting Platform and the Hosting Platform conducts a transaction by which potential tourist or transient users arrange Tourist or Transient Use and payment, whether the tourist or transient pays rent directly to the Owner or to the Hosting Platform. Interested Party. A Permanent Resident of the building in which the Tourist or Transient Use is alleged to occur, any homeowner association associated with the Residential Unit in which the Tourist or Transient Use is alleged to occur, the Owner of the Residential Unit in which the Tourist or Transient Use is alleged to occur, a Permanent Resident or Owner of a property within 100 feet of the property containing the Residential Unit in which the Tourist or Transient Use is alleged to occur, the City and County of San Francisco, or any non-profit organization exempt from taxation pursuant to Title 26, Section 501 of the United States Code, which has the preservation or improvement of housing as a stated purpose in its articles of incorporation or bylaws. Owner. Owner includes any person who is the owner of record of the real property. As used in this Chapter 41A, the term "Owner" includes a lessee where the lessee is offering a Residential Unit for Tourist or Transient use. Permanent Resident. A person who occupies a Residential Unit for at least 60 consecutive days with intent to establish that unit as his or her primary residence. A Permanent Resident may be an owner or a lessee. Primary Residence. The Permanent Resident's usual place of return for housing as documented by at least two of the following: motor vehicle registration; driver's license; voter registration; tax documents showing the Residential Unit as the Permanent Resident's residence for the purposes of a home owner's tax exemption; or a utility bill. A person may have only one Primary Residence. Residential Unit. Room or rooms, including a condominium or a room or dwelling unit that forms part of a tenancy-in-common arrangement, in any building, or portion thereof, which is designed, built, rented, leased, let or hired out to be occupied for Residential Use as defined in the San Francisco Housing Code. Residential Use. Any use for occupancy of a Residential Unit by a Permanent Resident. Short-Term Residential Rental. A Tourist or Transient Use where all of the following conditions are met: (a) the Residential Unit is offered for Tourist or Transient Use by the Permanent Resident of the Residential Unit; (b) the Permanent Resident is a natural person; (c) the Permanent Resident has registered the Residential Unit and maintains good standing on the Department's Short-Term Residential Rental Registry; and (d) the Residential Unit: is not subject to the Inclusionary Affordable Housing Program set forth in Planning Code Section 415 et seq.; is not a residential hotel unit subject to the provisions of Chapter 41, unless such unit has been issued a Permit to Convert under Section 41.12; is not otherwise a designated as a below market rate or income-restricted Residential Unit under City, state, or federal law; has not been the subject of an eviction pursuant to the Ellis Act and Administrative Code Section 37.9(a)(13) within the five year period prior to applying for the Registry if such eviction occurred after November 1, 2014; and no other requirement of federal or state law, this Municipal Code, or any other applicable law or regulation prohibits the permanent resident from subleasing, renting, or otherwise allowing Short-Term Residential Rental of the Residential Unit. Short-Term Residential Rental Registry or Registry. A database of information maintained by the Department that includes a unique registration number for each Short-Term Residential Rental and information regarding Permanent Residents who are permitted to offer Residential Units for Short-Term Residential Rental. Only one Permanent Resident per Residential Unit may be included on the Registry at any given time. The Registry shall be available for public review to the extent required by law, except that, to the extent permitted by law, the Department shall redact any Permanent Resident names and street and unit numbers

esidents who are permitted to offer Residential Units for Short-Term Residential Rental. Only one Permanent Resident per Residential Unit may be included on the Registry at any given time. The Registry shall be available for public review to the extent required by law, except that, to the extent permitted by law, the Department shall redact any Permanent Resident names and street and unit numbers from the records available for public review. Tourist or Transient Use. Any use of a Residential Unit for occupancy for less than a 30-day term of tenancy, or occupancy for less

than 30 days of a Residential Unit leased or owned by a Business Entity, whether on a short-term or long-term basis, including any occupancy by employees or guests of a Business Entity for less than 30 days where payment for the Residential Unit is contracted for or paid by the Business Entity. (Added by Ord. 331-81, App. 6/26/81; amended by Ord. 74-98, App. 3/16/98; Ord. 224-12 , File No. 120299, App. 11/1/2012, Eff. 12/1/2012; Ord. 218-14 , File No. 140381, App. 10/27/2014, Eff. 11/26/2014, Oper. 2/1/2015; Ord. 130-15 , File No. 150363, App. 7/30/2015, Eff. 8/29/2015; Ord. 104-16 , File No. 160423, Eff. 7/24/2016; Ord. 178-16 , File No. 160790, Eff. 9/10/2016)

(a) Unlawful Actions. Except as set forth in subsection 41A.5(g), it shall be unlawful for (1) any Owner to offer a Residential Unit for rent for Tourist or Transient Use; (2) any Owner to offer a Residential Unit for rent to a Business Entity that will allow the use of a Residential Unit for Tourist or Transient Use; or (3) any Business Entity to allow the use of a Residential Unit for Tourist or Transient Use. (b) Records Required. The Owner and Business Entity, if any, shall retain and make available to the Department records to demonstrate compliance with this Chapter 41A upon written request as provided herein. (c) Determination of Violation. Upon the filing of a written Complaint that an Owner or Business Entity has engaged in an alleged unlawful Conversion or that a Hosting Platform is not complying with the requirements of subsection (g)(4)(A), the Director shall take reasonable steps necessary to determine the validity of the Complaint. The Director may independently determine whether an Owner or Business Entity may be renting a Residential Unit for Tourist or Transient Use in violation of this Chapter 41A or whether a Hosting Platform has failed to comply with the requirements of subsection (g)(4)(A). To determine if there is a violation of this Chapter 41A, the Director may initiate an investigation of the subject property or Hosting Platform's allegedly unlawful activities. This investigation may include, but is not limited to, an inspection of the subject property and/or a request for any pertinent information from the Owner, Business Entity, or Hosting Platform, such as leases, business records, or other documents. The Director shall have discretion to determine whether there is a potential violation of this Chapter 41A. Notwithstanding any other provision of this Chapter 41A, any alleged violation related to failure to comply with the requirements of the Business and Tax Regulations Code shall be enforced by the Treasurer/Tax Collector under the provisions of that Code. (d) Civil Action. (1) The City may institute civil proceedings for injunctive and monetary relief, including civil penalties, against an Owner, Business Entity, or Hosting Platform for violations of this Chapter 41A under any circumstances, without regard to whether a Complaint has been filed or the Director has made a determination of a violation. (2) Private Rights of Action. (A) Following the filing of a Complaint and the final determination of a violation by the Director, any Interested Party may institute civil proceedings for injunctive and monetary relief against an Owner or Business Entity. (B) An Interested Party who is a Permanent Resident of the building in which the Tourist or Transient Use is alleged to occur, is a Permanent Resident of a property within 100 feet of the property containing the Residential Unit in which the Tourist or Transient Use is alleged to occur, or is a homeowner association associated with the Residential Unit in which the Tourist or Transient Use is alleged to occur may institute a civil action for injunctive and monetary relief against an Owner or Business Entity if (i) The Interested Party has filed a Complaint with the Department; (ii) The Director has not made a written determination pursuant to subsection 41A.6(a) that there is no violation of this Chapter 41A or basis for an investigation for an unlawful activity; (iii) An administrative hearing officer has not issued a final determination pursuant to subsection 41A.6(c) regarding the Complaint within 135 days of the filing of the Complaint with the Department; (iv) After such 135-day period has passed, the Interested Party has provided 30 days' written notice to the Department and the City Attorney's Office of its intent to initiate civil proceedings; and (v) The City has not initiated civil proceedings by the end of that 30-day notice period. Under this subsection 41A.5(d)(2)(B), the prevailing party shall be entitled to the costs of suit, including reasonable attorneys' fees, pursuant to an order of the Court. (3) Civil Penalties. If the City is the prevailing party in any civil action under this subsection (d): an Owner, Hosting Platform, or Business Entity in violation of this Chapter 41A may be liable for civil penalties of not more than $1,000 per day for the period of the unlawful activity. Interested Parties other than the City may not seek or obtain civil penalties. (4) Attorneys' Fees and Costs. If the City or any other Interested Party is the prevailing party, the City or the Interested Party shall be entitled to the costs of enforcing this Chapter 41A, including reasonable attorneys' fees, pursuant to an order of the Court.

(5) Any monetary award obtained by the City and County of San Francisco in such a civil action shall be deposited in the Department to be used for enforcement of Chapter 41A. The Department, through the use of these funds, shall reimburse City departments and agencies, including the City Attorney's Office, for all costs and fees incurred in the enforcement of this Chapter 41A. (e) Criminal Penalties. Any Owner or Business Entity who rents a Residential Unit for Tourist or Transient Use in violation of this Chapter 41A, or any Hosting Platform that provides a Booking Service for a Residential Unit to be used for Tourist or Transient Use in violation of the Hosting Platform's obligations under this Chapter 41A, shall be guilty of a misdemeanor. Any person convicted of a misdemeanor hereunder shall be punishable by a fine of not more than $1,000 or by imprisonment in the County Jail for a period of not more than six months, or by both. Each Residential Unit rented for Tourist or Transient Use shall constitute a separate offense. (f) Method of Enforcement, Director. The Director shall have the authority to enforce this Chapter against violations thereof by any or all of the means provided for in this Chapter 41A. (g) Exception for Short-Term Residential Rental. (1) Notwithstanding the restrictions set forth in this Section 41A.5, a Permanent Resident may offer his or her Primary Residence as a Short-Term Residential Rental if: (A) The Permanent Resident occupies the Residential Unit for no less than 275 days out of the calendar year in which the Residential Unit is rented as a Short-Term Residential Rental or, if the Permanent Resident has not rented or owned the Residential Unit for the full preceding calendar year, for no less than 75% of the days he or she has owned or rented the Residential Unit; (B) The Permanent Resident maintains records for two years demonstrating compliance with this Chapter 41A, including but not limited to information demonstrating Primary Residency, the number of days per calendar year he or she has occupied the Residential Unit, the number of days per calendar year the Residential Unit has been rented as a Short-Term Residential Rental, and compliance with the insurance requirement in Subsection (D). These records shall be made available to the Department upon request; (C) The Permanent Resident complies with any and all applicable provisions of state and federal law and the San Francisco Municipal Code, including but not limited to the requirements of the Business and Tax Regulations Code by, among any other applicable requirements, collecting and remitting all required transient occupancy taxes, and the occupancy requirements of the Housing Code; (D) The Permanent Resident maintains liability insurance appropriate to cover the Short-Term Residential Rental Use in the aggregate of not less than $500,000 or conducts each Short-Term Residential Rental transaction through a Hosting Platform that provides equal or greater coverage. Such coverage shall defend and indemnify the Owner(s), as named additional insured, and any tenant(s) in the building for their bodily injury and property damage arising from the Short-Term Residential Use; (E) The Residential Unit is registered on the Short-Term Residential Rental Registry; (F) The Permanent Resident includes the Department-issued registration number on any Hosting Platform listing or other listing offering the Residential Unit for use as a Short-Term Residential Rental; (G) For units subject to the rent control provisions of Section 37.3, the Permanent Resident complies with the initial rent limitation for subtenants and charges no more rent than the rent the Permanent Resident is paying to any landlord per month; and (H) The Permanent Resident can demonstrate to the satisfaction of the Department that the Residential Unit and the property on which it is located is not subject to any outstanding Building, Electrical, Plumbing, Mechanical, Fire, Health, Housing, Police, or Planning Code enforcement, including any notices of violation, notices to cure, orders of abatement, cease and desist orders, or correction notices. The Department shall not include a property that is subject to any such outstanding violations in the Registry. If such a violation occurs once a Residential Unit has been included in the Registry, the Department shall suspend the Residential Unit's registration and registration number until the violation has been cured. (2) Additional Requirements. (A) Offering a Residential Unit for Short-Term Residential Rental, including but not limited to advertising the Residential Unit's availability, while not maintaining good standing on the Registry shall constitute an unlawful conversion in violation of this Chapter 41A and shall subject the person or entity offering the unit in such a manner to the administrative penalties and enforcement procedures, including civil penalties, of this Chapter. (B) Only one Permanent Resident may be associated with a Residential Unit on the Registry, and it shall be unlawful for any other person, even if that person meets the qualifications of a "Permanent Resident," to offer a Residential Unit for Short-Term Residential Rental. (C) A Permanent Resident offering a Residential Unit for Short-Term Residential Rental shall maintain a valid business registration certificate. (D) A Permanent Resident offering a Residential Unit for Short-Term Residential Rental shall post a clearly printed sign inside his or her Residential Unit on the inside of the front door that provides information regarding the location of all fire extinguishers in the unit and building, gas shut off valves, fire exits, and pull fire alarms. (3) Short-Term Residential Rental Registry Applications, Fee, and Reporting Requirement. (A)

for Short-Term Residential Rental shall post a clearly printed sign inside his or her Residential Unit on the inside of the front door that provides information regarding the location of all fire extinguishers in the unit and building, gas shut off valves, fire exits, and pull fire alarms. (3) Short-Term Residential Rental Registry Applications, Fee, and Reporting Requirement. (A) Application. Registration shall be for a two-year term, which may be renewed by the Permanent Resident by filing a completed renewal application. Initial and renewal applications shall be in a form prescribed by the Department. The Department shall determine, in its sole discretion, the completeness of an application. Upon receipt of a complete initial application, the Department shall send mailed notice to the owner of record of the Residential Unit, informing the owner that an application to the Registry for the unit has

been received. If the Residential Unit is in a RH-1(D) zoning district, the following additional requirements shall apply: the Department shall also send mailed notice to any directly associated homeowner association that has previously requested such notice and to any owners and occupants within 300 feet of the property; the Department shall hold the application for 45 days after sending such notice; and the Department shall review and consider any information submitted by any such homeowner association, neighboring owner or occupant, or member of the public regarding the eligibility of the permanent resident and/or the residential unit for listing on the Registry received during the 45-day hold period. Both the initial application and any renewal application shall contain information sufficient to show that the Residential Unit is the Primary Residence of the applicant, that the applicant is the unit's Permanent Resident, and that the applicant has the required insurance coverage and business registration certificate. In addition to the information set forth here, the Department may require any other additional information necessary to show the Permanent Resident's compliance with this Chapter 41A. Primary Residency shall be established by showing the Residential Unit is listed as the applicant's residence on at least two of the following: motor vehicle registration; driver's license; voter registration; tax documents showing the Residential Unit as the Permanent Resident's Primary Residence for home owner's tax exemption purposes; or utility bill. A renewal application shall contain sufficient information to show that the applicant is the Permanent Resident and has occupied the unit for at least 275 days of each of the two preceding calendar years. Upon the Department's determination that an application is complete, the unit shall be entered into the Short-Term Residential Rental Registry and assigned an individual registration number. (B) Fee. The fee for the initial application and for each renewal shall be $50, payable to the Director. The application fee shall be due at the time of application. Beginning with fiscal year 2014-2015, fees set forth in this Section may be adjusted each year, without further action by the Board of Supervisors, as set forth in this Section. Within six months of the operative date of this ordinance* and after holding a duly noticed informational hearing at the Planning Commission, the Director shall report to the Controller the revenues generated by the fees for the prior fiscal year and the prior fiscal year's costs of establishing and maintaining the registry and enforcing the requirements of this Chapter 41A, as well as any other information that the Controller determines appropriate to the performance of the duties set forth in this Chapter. After the hearing by the Planning Commission, but not later than August 1, 2015, the Controller shall determine whether the current fees have produced or are projected to produce revenues sufficient to support the costs of establishing and maintaining the registry, enforcing the requirements of this Chapter 41A and any other services set forth in this Chapter and that the fees will not produce revenue that is significantly more than the costs of providing such services. The Controller shall, if necessary, adjust the fees upward or downward for the upcoming fiscal year as appropriate to ensure that the program recovers the costs of operation without producing revenue that is significantly more than such costs. The adjusted rates shall become operative on July 1. (C) Reporting Requirement. To maintain good standing on the Registry, the Permanent Resident shall submit a quarterly report to the Department beginning on January 1, 2016, and on January 1, April 1, July 1, and October 1 of each year thereafter, regarding the number of days the Residential Unit or any portion thereof has been rented as a Short Term Residential Rental since either initial registration or the last report, whichever is more recent, and any additional information the Department may require to demonstrate compliance with this Chapter 41A. (4) Requirements for Hosting Platforms. (A) All Hosting Platforms shall provide the following information in a notice to any user listing a Residential Unit located within the City and County of San Francisco through the Hosting Platform's service. The notice shall be provided prior to the user listing the Residential Unit and shall include the following information: that Administrative Code Chapters 37 and 41A regulate Short-Term Rental of Residential Units; the requirements for Permanent Residency and registration of the unit with the Department; and the transient occupancy tax obligations to the City. (B) A Hosting Platform shall comply with the requirements of the Business and Tax Regulations Code by, among any other applicable requirements, collecting and remitting all required Transient Occupancy Taxes, and this provision shall not relieve a Hosting Platform of liability related to an occupant's, resident's, Business Entity's, or Owner's failure to comply with the requirements of the Business and Tax Regulations Code. A Hosting Platform shall maintain a record demonstrating that the taxes have been remitted to the Tax Collector. (C) A Hosting Platform may provide, and collect a fee for, Booking Services in connection with short-term rentals for Residential Units located in the City and County of San Francisco only when the Hosting Platform exercises reasonable care to confirm that those Residential Units are lawfully registered on the Short-Term Residential Rental Registry at the time the Residential Unit is rented for short-term rental. Whenever a Hosting Platform complies with administrative guidelines issued by the Office of Short-Term Residential Rental Administration and Enforcement to confirm that the Residential Unit is l

orm exercises reasonable care to confirm that those Residential Units are lawfully registered on the Short-Term Residential Rental Registry at the time the Residential Unit is rented for short-term rental. Whenever a Hosting Platform complies with administrative guidelines issued by the Office of Short-Term Residential Rental Administration and Enforcement to confirm that the Residential Unit is lawfully registered on the Short-Term Rental Registry, the Hosting Platform shall be deemed to have exercised reasonable care for the purpose of this subsection (g)(4)(C). (D) Commencing November 5, 2016, and on the fifth day of every month thereafter, a Hosting Platform shall provide a signed affidavit to the Office of Short Term Rentals verifying that the Hosting Platform has complied with subsection (g)(4)(C) of this Section 41A.5 in the immediately preceding month. (E) For not less than three years following the end of the calendar year in which the short-term rental transaction occurred, the Hosting Platform shall maintain and be able, in response to a lawful request, to provide to the Office of Short Term Rentals for each short-term rental transaction for which a Hosting Platform has provided a Booking Service: (i) The name of the Owner or Business Entity who offered a Residential Unit for Tourist or Transient Use, (ii) The address of the Residential Unit, (iii) The dates for which the tourist or transient user procured use of the Residential Unit using the Booking Service provided by the Hosting Platform,

(iv) The registration number for the Residential Unit, and (v) The affidavit required in subsection (g)(4)(D). (5) The exception set forth in this subsection (g) provides an exception only to the requirements of this Chapter 41A. It does not confer a right to lease, sublease, or otherwise offer a residential unit for Short-Term Residential Use where such use is not otherwise allowed by law, a homeowners association agreement or requirements, any applicable covenant, condition, and restriction, a rental agreement, or any other restriction, requirement, or enforceable agreement. All Owners and residents are required to comply with the requirements of Administrative Code Chapter 37, the Residential Rent Stabilization and Arbitration Ordinance, including but not limited to the requirements of Section 37.3(c). (6) The Department shall designate a contact person for members of the public who wish to file Complaints under this Chapter 41A or who otherwise seek information regarding this Chapter or Short-Term Residential Rentals. This contact person shall also provide information to the public upon request regarding quality of life issues, including, for example, noise violations, vandalism, or illegal dumping, and shall direct the member of the public and/or forward any such Complaints to the appropriate City department. (7) Notwithstanding any other provision of this Chapter 41A, nothing in this Chapter shall relieve an individual, Business Entity, or Hosting Platform of the obligations imposed by any and all applicable provisions of state law and the Municipal Code including but not limited to those obligations imposed by the Business and Tax Regulations Code. Further, nothing in this Chapter shall be construed to limit any remedies available under any and all applicable provisions of state law and the Municipal Code including but not limited to the Business and Tax Regulations Code. (Added by Ord. 331-81, App. 6/26/81; amended by Ord. 74-98, App. 3/6/98; Ord. 224-12 , File No. 120299, App. 11/1/2012, Eff. 12/1/2012; Ord. 218-14 , File No. 140381, App. 10/27/2014, Eff. 11/26/2014, Oper. 2/1/2015; Ord. 130-15 , File No. 150363, App. 7/30/2015, Eff. 8/29/2015; Ord. 104-16 , File No. 160423, Eff. 7/24/2016; Ord. 178-16 , File No. 160790, Eff. 9/10/2016; Ord. 89-17, File No. 170158, App. 4/14/2017, Eff. 5/14/2017)

• Editor's Note: The reference in Sec. 41A.5(g)(3)(B) to "the operative date of this ordinance" was added to the Code as part of the amendments included in Ord. 218-14 , Oper. 2/1/2015.

(a) Determination and Notice of Violation. (1) After the Director has determined that a violation of this Chapter 41A exists, the Director shall notify the responsible Owner, Business Entity, or Hosting Platform of the determination of violation by certified mail and shall post the notice of violation in a conspicuous location on, or if access to the property is not available in a conspicuous location as close as practicable to, the building or property where the Residential Unit is located. (2) Once a Complaint has been filed or once the Director has made a determination of violation in the absence of a Complaint, the Department shall include information regarding the Complaint or violation, including whether the Complaint is pending or resolved and, if resolved, any final determination, on the Department's website. (3) Contents of Notice. The notice shall cite to this Chapter 41A and describe the violation(s) with specificity. The notice of violation shall: state that the responsible party shall immediately correct all violations; and assess any applicable administrative penalties as set forth in Subsection 41A.6(d)(1). The notice of violation shall also inform the responsible party of the right to request a Director's hearing under Subsection 41A.6(b) to appeal the determination of violation and any assessed administrative penalties. (4) If the Director finds there is no violation of this Chapter or basis for an investigation for an unlawful activity, the Director shall so inform the complainant within 60 days of the filing of any Complaint. (b) Request for Hearing. Within 30 days of the notice of violation, the responsible party may request a Director's hearing to appeal the determination of violation and any assessed administrative penalties. The Director shall send a notice of the date, hour, and place of the hearing to the responsible party at the address specified in the request for hearing and to any member of the public who has expressed an interest in the matter. (c) Administrative Review Hearings. The Director may designate a member of Department staff to act in his or her place as the hearing officer. The Director's appointed hearing officer shall hold an administrative review hearing within 45 days of the request for hearing to review all information provided by the Interested Party, members of the public, City staff, and the Owner, Business Entity, or Hosting Platform for the investigation, and the hearing officer shall thereafter make a determination whether the Owner, Business Entity, or Hosting Platform has violated this Chapter 41A. (1) Pre-hearing Submission. No less than ten days prior to the administrative review hearing, parties to the hearing shall submit written information to the Director including, but not limited to, the issues to be determined by the hearing officer and the evidence to be offered at the hearing. Such information shall be forwarded to the hearing officer prior to the hearing along with any information compiled by the Director. (2) Hearing Procedure. If more than one hearing is requested for Residential Units located in the same building at or about the same time, the Director shall consolidate all of the hearings into one hearing. The hearing shall be recorded. Any party to the hearing may at his or her own expense cause the hearing to be recorded by a certified court reporter. Parties may be represented by counsel. All

testimony shall be given under oath. Written decisions and findings shall be rendered by the hearing officer within 30 days of the hearing. Copies of the findings and decision shall be served upon the parties by certified mail. A notice that a copy of the findings and decision is available for inspection between the hours of 9:00 a.m. and 5:00 p.m. Monday through Friday shall be posted by the Owner or the Director in the building in the same location in which the notice of the administrative review hearing was posted. (3) Failure to Appear. In the event the Owner, authorized Hosting Platform representative, or an interested party fails to appear at the hearing, the hearing officer may nevertheless make a determination based on the evidence in the record and files at the time of the hearing, and issue a written decision and findings. (4) Finality of the Hearing Officer's Decision and Judicial Review. The decision of the hearing officer shall be final. Within 20 days after service of the hearing officer's decision, any party may seek judicial review of the hearing officer's decision. (5) Hearing Officer Decision and Collection of Penalties. Upon the hearing officer's decision, or if no hearing is requested upon the expiration of the appeal period, the Director may proceed to collect the penalties and costs pursuant to the lien procedures set forth in Subsection 41A.6(e), consistent with the hearing officer's decision or the determination of violation if no hearing is requested. (6) Remedy of Violation. If the hearing officer determines that a violation has occurred, the hearing officer's decision shall: (A) Specify a reasonable period of time during which the Owner, Business Entity, or Hosting Platform must correct or otherwise remedy the violation; (B) Detail the amount of any administrative penalties the Owner or Hosting Platform shall be required to pay as set forth in Subsection 41A.6(d); and, (C) For violations by Owners, state that if the violation is not corrected or otherwise remedied within this period, the Department shall remove or prohibit the registration of the Residential Unit from the Short-Term Residential Registry for one year even if the Residential Unit otherwise meets the requirements for Short-Term Residential Rental. (7) If the hearing officer determines that no violation has occurred, the determination is final. (d) Administrative Penalties for Violations and Enforcement Costs. (1) Administrative Penalties. Administrative penalties shall be assessed as follows: (A) For the initial violation by an Owner or Business Entity, not more than four times the standard hourly administrative rate of $121 for: (i) each unlawfully converted unit per day from the notice of violation until such time as the unlawful activity terminates; or (ii) the initial failure of a Hosting Platform to comply with its obligations under subsection 41A.5(g)(4). (B) For the second and any subsequent violation by the same Owner(s), Business Entity, or Hosting Platform, not more than eight times the standard hourly administrative rate of $121 for: (i) each unlawfully converted unit per day from the notice of violation until such time as the unlawful activity terminates; or (ii) the second and any subsequent failure of a Hosting Platform to comply with its obligations under subsection 41A.5(g)(4). (2) Prohibition on Registration and Listing Unit(s) on Any Housing Platform. In the event of multiple violations of any Owner's or Business Entity's obligations under this Chapter 41A, the Department shall remove the Residential Unit(s) from the Registry for one year and include the Residential Unit(s) on a list maintained by the Department of Residential Units that may not be offered for Tourist or Transient Use until compliance. Any Owner or Business Entity who continues to offer for rent a Residential Unit in violation of this Section 41A.6 shall be liable for additional administrative penalties and civil penalties of up to $1,000 per day of unlawful inclusion. (e) Notice of Violation and Imposition of Penalties. The Director shall notify the Owner or Hosting Platform by certified mail of the violation and that administrative penalties shall be imposed pursuant to this Chapter 41A. The notice shall state the time of the existence of the violation and the resulting imposition of penalties. Payment of the administrative penalties and enforcement costs shall be made within 30 days of the certified mailed notice to the Owner or Hosting Platform. If the administrative penalties and enforcement costs are not paid, the Director shall refer the matter to the Treasurer/Tax Collector and/or initiate lien procedures to secure the amount of the penalties and costs against the real property that is subject to this Chapter, under Article XX of Chapter 10 of the Administrative Code to make the penalty, plus accrued interest, a lien against the real property regulated under this Chapter. Except for the release of the lien recording fee authorized by Administrative Code Section 10.237, all sums collected by the Tax Collector pursuant to this ordinance shall be deposited as set forth in subsection (f) below. (f) Deposit of Penalties. Any fees and penalties collected pursuant to this Chapter 41A shall be deposited in the Housing Trust Fund for use by the Small Sites Program, which shall reimburse City departments and agencies, including the Department and the City Attorney's Office, for all costs and fees incurred in the enforcement of this Chapter 41A. (Added as Sec. 41A.8 by Ord. 74-98, App. 3/6/98; redesignated and amended by Ord. 224-12 , File No. 120299, App. 11/1/2012, Eff. 12/1/2012; amended by Ord. 218-14 , File No. 140381, App. 10/27/2014, Eff. 11/26/2014, Oper. 2/1/2015; Ord. 130-15 , File No. 150363, App. 7/30/2015, Eff. 8/29/2015; Or

nd the City Attorney's Office, for all costs and fees incurred in the enforcement of this Chapter 41A. (Added as Sec. 41A.8 by Ord. 74-98, App. 3/6/98; redesignated and amended by Ord. 224-12 , File No. 120299, App. 11/1/2012, Eff. 12/1/2012; amended by Ord. 218-14 , File No. 140381, App. 10/27/2014, Eff. 11/26/2014, Oper. 2/1/2015; Ord. 130-15 , File No. 150363, App. 7/30/2015, Eff. 8/29/2015; Ord. 104-16 , File No. 160423, Eff. 7/24/2016; Ord. 178-16 , File No. 160790, Eff. 9/10/2016) (Former Sec. 41A.6 added by Ord. 331-81, App. 6/26/81; repealed by Ord. 224-12, File No. 120299, App. 11/1/2012, Eff. 12/1/2012)

ENFORCEMENT. (a) The Mayor shall establish an Office of Short-Term Residential Rental Administration and Enforcement, which shall provide a single location to receive and process applications for the Registry and Complaints regarding violations of this Chapter 41A. This office shall be staffed by the Department and other departments as appropriate, with participation from the Department of Building Inspection, the Treasurer/Tax Collector's Office, and other departments as needed, to process applications for the Registry and enforce the requirements of this Chapter 41A in a timely and efficient manner. It is the intent of this Board of Supervisors in directing the establishment of this office to streamline both the process of administering the Registry and enforcing the requirements of this Chapter 41A to protect residential housing from unlawful conversion to Tourist or Transient Use. The Office of Short-Term Residential Rental Administration and Enforcement shall promulgate rules and regulations to simplify and streamline the application process and to minimize the time between the filing of applications and their final approval. (b) Monitor Hosting Platforms. In addition to the administrative enforcement duties outlined in Section 41A.6, the Office of Short- Term Residential Rental Administration and Enforcement shall actively monitor Hosting Platform listings. Within 15 business days of the effective date of Ordinance No. 104-16, the Office of Short-Term Residential Rental Administration and Enforcement shall complete a comprehensive review of active Hosting Platform listings and produce an inventory of potentially non-compliant listings discovered during the review. Subsequent reviews of Hosting Platform listings shall be performed on at least a monthly basis. (1) The Office of Short-Term Residential Rental Administration and Enforcement shall, upon completion of a Hosting Platform review or discovery of a potentially non-compliant listing, immediately provide notice to Hosting Platforms by electronic mail of all listings that do not have valid registration numbers or are otherwise not in compliance with this Chapter 41A. These notices shall be provided to the City Attorney's Office. (2) The Office of Short-Term Residential Rental Administration and Enforcement shall have the power to issue and serve administrative subpoenas as necessary to determine whether Owners, Business Entities, and Hosting Platforms have complied with Administrative Code Chapter 41A. The Office of Short-Term Residential Rental Administration and Enforcement shall issue and serve subpoenas to the Hosting Platforms to obtain information necessary to determine whether violations of Administrative Code Chapter 41A have occurred within a reasonable time not to exceed 30 days of discovering potential violations through a monthly review or other investigation effort. Owners, Business Entities, and Hosting Platforms shall have a reasonable opportunity to challenge the administrative subpoena by seeking judicial review before suffering any penalties for refusing to comply. (c) Reporting to Board of Supervisors. (1) Annual Reports. The Office of Short-Term Residential Rental Administration and Enforcement shall provide a report to the Board of Supervisors regarding the administration and enforcement of the Short-Term Residential Rental program on an annual basis. The report shall make recommendations regarding proposed amendments to this Chapter 41A necessary to reduce any adverse effects of the Short-Term Residential Rental program. (2) Quarterly Reports. The Office of Short-Term Residential Rental Administration and Enforcement shall provide quarterly reports to the Board of Supervisors summarizing the Host Platform monitoring activities during the preceding quarter. The periods covered by the quarterly reports shall commence on January 1, April 1, July 1, and October 1, respectively. At a minimum, each report shall include the number of notices sent to Hosting Platforms, the total number of listings included in those notices, the number of any administrative subpoenas issued upon discovery of potentially non-compliant listings, and the number and amount of penalties imposed on Owners, Business Entities, or Hosting Platforms for violations of their respective obligations under this Chapter 41A. Each report shall break down information by zip code, supervisorial district, and any other criteria as may be requested by the Board of Supervisors. (Added by Ord. 130-15 , File No. 150363, App. 7/30/2015, Eff. 8/29/2015; amended by Ord. 104-16 , File No. 160423, Eff. 7/24/2016; Ord. 178-16 , File No. 160790, Eff. 9/10/2016) (Former Sec. 41A.7 added by Ord. 331-81, App. 6/26/81; repealed and reenacted by Ord. 224-12 , File No. 120299, App. 11/1/2012, Eff. 12/1/2012; redesignated as Sec. 41A.8 and amended by Ord. 130-15 , File No. 150363, App. 7/30/2015, Eff. 8/29/2015)

(a) Nothing in this Chapter 41A may be construed to supersede any other lawfully enacted ordinance of the City and County of San Francisco. (b) Clauses of this Chapter 41A are declared to be severable and if any provision or clause of this Chapter 41A or the application thereof is held to be unconstitutional or to be otherwise invalid by any court of competent jurisdiction, such invalidity shall not affect other provisions of this Chapter 41A. (Added as Sec. 41A.7 by Ord. 331-81, App. 6/26/81; repealed and reenacted by Ord. 224-12 , File No. 120299, App. 11/1/2012, Eff. 12/1/2012; redesignated and amended by Ord. 130-15 , File No. 150363, App. 7/30/2015, Eff. 8/29/2015) (Former Sec. 41A.8 added by Ord. 74-98, App. 3/6/98; redesignated as Sec. 41A.6 and amended by Ord. 224-12 , File No. 120299, App. 11/1/2012, Eff. 12/1/2012) CHAPTER 41B:

COMMUNITY OPPORTUNITY TO PURCHASE ACT Sec. 41B.1. Findings and Purpose. Sec. 41B.2. Definitions. Sec. 41B.3. “Sale of a Multi-Family Residential Building” Defined. Sec. 41B.4. Qualified Nonprofits. Sec. 41B.5. General Provisions. Sec. 41B.6. Right of First Offer. Sec. 41B.7. Right of First Refusal. Sec. 41B.8. Preservation as Rent-Restricted Affordable Housing; Tenant Protections. Sec. 41B.9. Incentives. Sec. 41B.10. Enforcement. Sec. 41B.11. Implementation. Sec. 41B.12. Undertaking for the General Welfare. Sec. 41B.13. Construction with Other Laws. Sec. 41B.14. Severability.

(a) The City faces a severe and continuing housing crisis. Many City residents are unable to obtain or retain affordable housing. (b) This crisis has profoundly negative effects on the City. It causes dislocation, which frays the social ties that bind our neighborhoods and communities together. It forces vulnerable residents to leave their home, the City, for new communities where they are strangers. And it contributes to homelessness—which is itself a severe and continuing crisis in the City. (c) The City’s housing crisis is caused, in large part, by a shortage of affordable rental housing. The creation and preservation of such housing is therefore of paramount public concern. (d) Obstacles to the creation and preservation of affordable rental housing include off-market sales, the transfer of multifamily residential building by foreclosure or deed in lieu of foreclosure, and rapid turnover in the City’s real estate market. Nonprofit organizations seeking to create and preserve affordable housing may be willing and able to pay market prices to purchase residential buildings for sale, but nevertheless find themselves often unable to purchase such buildings before they leave the market. Nonprofit organizations serving the broader public interest must often move more deliberately and borrow purchase money from non-traditional lenders in such real estate transactions than private entities concerned solely with profit. Nonprofit organizations may also have access to public funds dedicated to acquire multifamily residential buildings under the threat of foreclosure or subject to foreclosure proceedings, but such nonprofit organizations sometimes do not have the benefit of notice that such multifamily residential buildings are available for purchase. (e) The purpose of this Chapter 41B (which may be referred to as the “Community Opportunity to Purchase Act”) is to enhance nonprofit organizations’ ability to purchase multi-family residential buildings, at market prices, within a reasonable period of time, and to thereby promote the creation and preservation of affordable rental housing. (f) This Chapter 41B is intended to complement existing anti-displacement and preservation programs administered by the Mayor’s Office of Housing and Community Development (the “Agency”). In particular, this Chapter is intended to complement the Small Sites Program and Preservation and Seismic Safety (“PASS”) program. (1) The Small Sites Program was created to establish and protect long-term affordable housing in smaller properties throughout the City, particularly at sites were1 market pressures may otherwise result in tenant evictions and rising rents. By January 2019, the Small Sites Program had empowered local nonprofit housing organizations to preserve 28 buildings, containing 205 residential units and 13 commercial spaces. (2) The PASS program provides low-cost, long-term senior financing to fund the acquisition, rehabilitation, seismic retrofitting, and preservation of affordable multi-family housing, funded through bond revenues previously approved by City voters. It is anticipated that the PASS program will preserve up to 1,400 units of affordable housing in the City. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019; amended by Ord. 228-20, File No. 200948, App. 11/13/2020, Eff. 12/14/2020; Ord. 88-24, File No. 240262, App. 5/3/2024, Eff. 6/3/2024) CODIFICATION NOTE

1. So in Ord. 79-19.

For purposes of this Chapter 41B, the following definitions apply: “Agency” means the Mayor’s Office of Housing and Community Development, or any successor agency, department, or office. “Area Median Income” means the Unadjusted Area Median Income published by the U.S. Department of Housing and Urban Development for the geographic area that includes the City. “City” means the City and County of San Francisco. “Fee Interest” means ownership of real property in fee simple absolute. “Multi-Family Residential Building,” or “Building,” means any privately-owned real property in San Francisco improved with three or more residential rental units (whether or not the property also includes non-residential uses), any privately-owned real property on which three or more residential units are under construction, and any privately-owned vacant lot on which the Planning Code and other applicable laws would permit the construction of three or more residential rental units. “Notice of Special Restrictions” means an agreement executed by a Qualified Nonprofit and recorded against a Multi-Family Residential Building Purchased by such Qualified Nonprofit, substantially in the form published by the Agency. “Purchase of a Multi-Family Residential Building,” or “Purchase,” means to acquire any interest that is transferred pursuant to the Sale of a Multi-Family Residential Building. “Purchaser” means the individual, individuals, entity, or entities engaged, or seeking to engage, in the Purchase of a Multi-Family Residential Building. “Sale of a Multi-Family Residential Building,” or “Sale,” is defined in Section 41B.3. “Sell” means to engage in the Sale of a Multi-Family Residential Building. “Seller” means the individual, individuals, entity, or entities engaged, or seeking to engage, in the Sale of a Multi-Family Residential Building. “Qualified Nonprofit” is defined in Section 41B.4(a). (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019)

(a) General Definition. As used in this Chapter 41B, “Sale of a Multi-Family Residential Building,” or “Sale,” means any of the following: (1) The transfer, in exchange for money or any other thing of economic value, of a present interest in the Multi-Family Residential Building, including beneficial use, where the value of the present interest is the Fee Interest in the Multi-Family Residential Building, or substantially equal to the value of that Fee Interest; or (2) If an interest in the Multi-Family Residential Building is held by a trust, the transfer, in exchange for money or any other thing of economic value, of a beneficial interest in the trust, where the value of the beneficial interest in the trust is substantially equal to the value of the Fee Interest of the Multi-Family Residential Building; or (3) If an interest substantially equal to the value of the Fee Interest of the Multi-Family Residential Building is held by any kind of corporate entity or partnership (including, but not limited to, a corporation, limited liability company, general partnership, limited partnership, or limited liability partnership), and if that interest is substantially equal in value to the total value of assets held by the corporate entity or partnership, the transfer, in exchange for money or any other thing of economic value, of a controlling interest in the corporate entity or partnership; or (4) The transfer of the Fee Interest or other beneficial interests of the Multifamily Residential Building made under a deed in lieu of foreclosure and/or related agreement related to the repayment of a loan and avoidance of foreclosure. (b) Multiple Owners. For purposes of this Section 41B.3, in any instance in which multiple entities (whether those entities are natural persons, trusts, corporate entities, partnerships, or any other kind of entity, or any combination of different kinds of entities) hold interests in a Multi-Family Residential Building, the transfer of multiple interests by or in those entities shall be considered the transfer of a single interest, if the transfers are made in connection with substantially the same transaction or set of transactions. (c) Exclusions. Notwithstanding subsections (a) and (b), “Sale of a Multi-Family Residential Building,” or “Sale,” does not include any of the following: (1) Any transfer made under a mortgage or deed of trust; or (2) Any transfer made in connection with any bankruptcy proceeding (including, but not limited to, any transfer made by a

bankruptcy trustee); or (3) Any transfer of an interest in real property held by the Federal government, by the State government, or by any special district created by State law (including, but not limited to, any transfer of any such interest held because of a taxpayer’s nonpayment of tax); or (4) Any transfer by devise or intestacy, or any other transfer made in connection with a bona fide effort to pass an interest in real property to one’s devisees or heirs (including, but not limited to, such transfers made in connection with a living trust); or (5) Any transfer between or among spouses, domestic partners, siblings (including, but not limited to, half-siblings, step-siblings, and adoptive siblings), parents (including, but not limited to, step-parents and adoptive parents) or guardians and their children, grandparents and their grandchildren, aunts or uncles and their nieces or nephews, great-aunts or great-uncles and their grand-nieces or grand-nephews, or first or second cousins, or any combination thereof; or (6) Any transfer of an interest in a Multi-Family Residential Building income-restricted at or below an average of 80% of Area Median Income for a minimum of 10 years, if such transfer is to an entity controlled by a California public benefit corporation, and that entity also participates in the management, direction, or control of the Building; or (7) For the purpose of a land dedication under the Planning Code or a development agreement or similar agreement approved by the Board of Supervisors, any transfer to the City or its designee of an interest in any privately-owned lot on which the Planning Code and other applicable laws would permit the construction of three or more residential rental units. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019; amended by Ord. 228-20, File No. 200948, App. 11/13/2020, Eff. 12/14/2020; Ord. 88-24, File No. 240262, App. 5/3/2024, Eff. 6/3/2024)

(a) Annual Selection of Qualified Nonprofits. The Agency shall establish a process for certifying nonprofit organizations that meet the following criteria: (1) The organization is a bona fide nonprofit, as evidenced by the fact that it is exempt from federal income tax under 26 U.S.C. § 501(c)(3); (2) The organization has demonstrated a commitment to the provision of affordable housing for low- and moderate-income City residents, and to preventing the displacement of such residents; (3) The organization has demonstrated a commitment to community engagement, as evidenced by relationships with neighborhood- based organizations or tenant counseling organizations; (4) The organization has demonstrated the capacity (including, but not limited to, the legal and financial capacity) to effectively acquire and manage residential real property at multiple locations in the City; and (5) The organization has, within the previous five years, acquired or partnered with another housing development organization to acquire at least two residential buildings using funding provided by the Agency, or has acquired or partnered with another nonprofit organization to acquire at least two residential buildings under this Chapter 41B. Nonprofit organizations that the Agency certifies as having met these criteria shall be known as “Qualified Nonprofits.” An organization’s certification as a Qualified Nonprofit shall be valid for three years. The Agency shall solicit new applications for Qualified Nonprofit status at least once each calendar year, at which time existing Qualified Nonprofits shall be eligible to apply for renewed certification as Qualified Nonprofits. In the absence of new information raising doubts about whether the organization qualifies as a Qualified Nonprofit, an existing Qualified Nonprofit’s application for renewed certification as a Qualified Nonprofit shall be routinely and swiftly granted. (b) Existence and Publication of Qualified Nonprofits List. The Agency shall publish on its website, and make available upon request, a list of Qualified Nonprofits. In addition to such other information as the Agency may include, this list shall include contact information for each Qualified Nonprofit. This contact information shall include, but need not be limited to, a mailing address, an e-mail address that the Qualified Nonprofit monitors regularly, and a telephone number. (c) Disqualification of Qualified Nonprofits. The Agency shall promptly investigate any complaint alleging that a Qualified Nonprofit has failed to comply with this Chapter 41B. If, after providing the Qualified Nonprofit with notice and opportunity to be heard, the Agency determines that a nonprofit organization listed as a Qualified Nonprofit has failed to comply with this Chapter, the Agency may suspend or revoke that nonprofit organization’s certification as a Qualified Nonprofit. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019)

(a) First Right to Purchase Conferred. This Chapter 41B shall be construed to confer upon each Qualified Nonprofit a first right to

purchase any Multi-Family Residential Building for Sale in the City. This first right to purchase shall consist of both a right of first offer, as set forth in Section 41B.6, and a right of first refusal, as set forth in Section 41B.7. (b) Confidential Information Protected. With the exception of the notice to Sell a Building under Section 41B.6(b), any information obtained from a Seller by a Qualified Nonprofit under this Chapter 41B—including, but not limited to, disclosures made under Section 41B.6(c) and (e), and terms and conditions of an offer of Sale made under Section 41B.7(b)—shall be kept confidential to the extent required by law, except that a Qualified Nonprofit may, if otherwise permitted by law, share such information with other Qualified Nonprofits to facilitate Qualified Nonprofits’ exercise of the rights conferred by this Chapter. Nothing in this Chapter permits or requires the disclosure of information where such disclosure is otherwise prohibited by law. (c) Preexisting Rights Unaffected. This Chapter 41B shall not be construed to impair any contract, or affect any property interest held by anyone other than the Seller of a Multi-Family Residential Building (including, but not limited to, any interest held under a mortgage, deed of trust, or other security interest; any option to purchase; or any right of first offer or right of first refusal), in existence before the effective date of this Chapter. (d) Notice of Default. All owners of a Multifamily Residential Building shall provide written notice to each Qualified Nonprofit and the Agency of a non-judicial foreclosure or a judicial foreclosure related to an owner’s Multifamily Residential Building. Within two business days of receipt of any of the following documents, an owner of a Multifamily Residential Building shall deliver to each Qualified Nonprofit and the Agency, via e-mail, a copy of: (1) a notice of default related to such Multifamily Residential Building under California Civil Code Section 2924b(b), or successor provision; (2) a civil complaint filed in superior court of a judicial foreclosure action related to such Multifamily Residential Building under the California Code of Civil Procedure Sections 725a – 730.5, or successor provisions; (3) a notice of sale related to such Multifamily Residential Building under California Civil Code Section 2924f(b)(4), or successor provision; (4) a notice of levy related to such Multifamily Residential Building under the Code of Civil Procedure sections 699.540 and 700.015, or successor provisions; (5) a notice of sale related to such Multifamily Residential Building under the Code of Civil Procedure section 701.540; (6) any other notice of default or notice of sale related to a judicial foreclosure or a non-judicial foreclosure of such Multifamily Residential Building under California law. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019; amended by Ord. 228-20, File No. 200948, App. 11/13/2020, Eff. 12/14/2020; Ord. 88-24, File No. 240262, App. 5/3/2024, Eff. 6/3/2024)

(a) General Construction. This Section 41B.6 shall be construed to confer upon each Qualified Nonprofit a right of first offer with respect to any Multi-Family Residential Building for Sale in the City, as set forth in this Section. (b) Opportunity for Qualified Nonprofits to Submit Offers. Before the Seller of a Multi-Family Residential Building may (1) allow any prospective Purchaser, other than a Qualified Nonprofit, to view that Building in person or physically inspect that Building, (2) offer that Building for Sale to any prospective Purchaser other than a Qualified Nonprofit, or (3) otherwise solicit any offer to Purchase that Building from any Purchaser other than a Qualified Nonprofit, the Seller shall notify each Qualified Nonprofit, via e-mail, of its intent to Sell the Building, and shall provide each Qualified Nonprofit with an opportunity to make an offer to Purchase the Building as set forth in subsections (d)–(f). The Seller shall submit this notification on the same calendar day and, to the extent possible, at the same time, to each of the e-mail addresses included on the Agency’s list of Qualified Nonprofits pursuant to Section 41B.4(b). If, within one year of providing the notification required under this subsection (b), the Seller does not execute a written and binding purchase and sale agreement for the Sale of a Multi-Family Residential Building or complete the Sale of a Multi-Family Residential Building, but still intends to Sell the Building, the Seller shall provide each Qualified Nonprofit with a new notification under this subsection (b) of the Seller’s continued intent to Sell the Building, and at that time shall provide each Qualified Nonprofit with a new opportunity to Purchase the Building under this Chapter 41B. Every year thereafter, on the anniversary of the first required notification under this subsection (b), if the Building remains for sale, the Seller shall provide each Qualified Nonprofit with a new notification under this subsection (b) of the Seller’s continued intent to Sell the Building, and at that time shall provide each Qualified Nonprofit with a new opportunity to make an offer to Purchase the Building as set forth in subsections (d)-(f), until the Building is Sold to a Qualified Nonprofit or a Purchaser, as applicable. If the Seller elects to not Sell the Building, the Seller shall provide each Qualified Nonprofit with written notice that the Seller no longer has intent to Sell the Building, but the Seller shall continue to comply with this Chapter 41B before the Sale of the Building. (c) Related Disclosures. When the Seller, pursuant to subsection (b), notifies each Qualified Nonprofit, via e-mail, of its intent to sell a Multi-Family Residential Building, the Seller shall also provide each Qualified Nonprofit with the following information: (1) The number of rental units in the Building; (2) The address or location of each rental unit; and

(3) The rate of rent due for each unit. (d) Time for Qualified Nonprofits to Express Interest. No later than 11:59 p.m. on the fifth full calendar day after a Seller has, pursuant to subsection (b), notified each Qualified Nonprofit, via e-mail, of its intent to Sell a Multi-Family Residential Building, each Qualified Nonprofit shall notify the Seller and every other Qualified Nonprofit, via e-mail, as to whether or not the Qualified Nonprofit wishes to further consider whether to make an offer to Purchase the Building. If, after 11:59 p.m. on the fifth full calendar day after a Seller has notified each Qualified Nonprofit of its intent to Sell the Building, no Qualified Nonprofit has notified the Seller that it wishes to further consider whether to make an offer to Purchase the Building, the Seller may immediately proceed to offer the Building for Sale to, and to solicit offers of Purchase from, prospective Purchasers other than Qualified Nonprofits, subject to the right of first refusal set forth in Section 41B.7. If, at or before 11:59 p.m. on the fifth full calendar day after a Seller has notified each Qualified Nonprofit of its intent to Sell the Building, each Qualified Nonprofit has notified the Seller that the Qualified Nonprofit does not wish to further consider whether to make an offer to Purchase the Building, the Seller may likewise immediately offer the Building for Sale to, and solicit offers of Purchase from, prospective Purchasers other than Qualified Nonprofits, subject to the right of first refusal set forth in Section 41B.7. (e) Additional Disclosures. If, no later than 11:59 p.m. on the fifth full calendar day after a Seller has notified each Qualified Nonprofit of its intent to Sell a Multi-Family Residential Building, any Qualified Nonprofit has, consistent with subsection (d), notified the Seller that the Qualified Nonprofit wishes to further consider whether to make an offer to Purchase the Building, the Seller shall disclose to each such Qualified Nonprofit, via e-mail, the following additional information regarding the Building: (1) the name or names of any tenant or tenants in each rental unit, as well as any available contact information for each tenant, (2) the number of bedrooms and bathrooms in each rental unit, (3) each tenant’s move-in date, (4) base rent for each rental unit, (5) Building costs passed through to each tenant, if any, (6) whether each tenant has a written lease or rental agreement, and (7) the annual expenses for the Building, including, but not limited to, management, insurance, utilities, and maintenance. Concurrently with the release of this additional information, the Seller shall provide to each tenant in the Building an information sheet, prepared by the Agency, containing a brief overview of the Community Opportunity to Purchase Act and the Agency’s Small Sites Program. (f) Time for Qualified Nonprofits to Make Offer. Upon receipt, via e-mail, of the disclosures described in subsection (e), each such Qualified Nonprofit (that is, each Qualified Nonprofit that has, consistent with subsection (d), notified the Seller that the Qualified Nonprofit wishes to further consider whether to make an offer to Purchase the Building) shall have 25 additional calendar days to decide whether to make an offer to Purchase the Building, and to submit any such offer to the Seller. Any such offer of Purchase shall be presumed to be contingent upon the Qualified Nonprofit’s ability to conduct due diligence and secure financing in a manner consistent with subsection (h), unless the Seller and the Qualified Nonprofit expressly agree otherwise in writing. (g) Seller Free to Accept or Reject Offer. The Seller is free to accept or reject any offer of Purchase submitted by a Qualified Nonprofit under subsection (e). Any such acceptance or rejection shall be communicated in writing. If the Seller rejects all such offers of Purchase, or if the 25-day period described in subsection (e) has elapsed and no Qualified Nonprofit has submitted an offer of Purchase, the Seller may immediately offer the Building for Sale to, and solicit offers of Purchase from, prospective Purchasers other than Qualified Nonprofits, subject to the right of first refusal set forth in Section 41B.7. (h) Seller’s Acceptance of Offer. If the Seller accepts an offer of Purchase submitted by a Qualified Nonprofit, the Qualified Nonprofit shall have 60 days to conduct due diligence and secure financing related to the Purchase, unless the Seller and the Qualified Nonprofit have expressly agreed otherwise in writing. At the end of this 60-day period (or any other period to which the Seller and the Qualified Nonprofit have expressly agreed in writing), the Seller shall proceed to Sell the Multi-Family Residential Building to the Qualified Nonprofit in a manner consistent with the Qualified Nonprofit’s offer of Purchase. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019; amended by Ord. 228-20, File No. 200948, App. 11/13/2020, Eff. 12/14/2020)

(a) General Construction. This Section 41B.7 shall be construed to confer upon each Qualified Nonprofit a right of first refusal, as set forth in this Section, with respect to any Multi-Family Residential Building which that Qualified Nonprofit has previously made an offer of purchase under Section 41B.6(f), or for which that Qualified Nonprofit was not previously given the opportunity described in Section 41B.6(b). (b) Written Offer of Sale to Qualified Nonprofits; Terms and Conditions Set by Market. Except as provided in subsection (f), whenever the Seller of a Multi-Family Residential Building receives from a Purchaser other than a Qualified Nonprofit an offer to Purchase the Multi-Family Residential Building that the Seller wishes to accept, and whenever the Seller of a Multi-Family Residential Building makes an offer to Sell the Multi-Family Residential Building that a Purchaser other than a Qualified Nonprofit expresses a desire to accept, the Seller shall, before any such offer of Purchase or Sale may be accepted, offer to Sell the Building to any Qualified Nonprofit that has previously made an offer of purchase under Section 41B.6(f) with respect to that Building, or that was not previously given the opportunity described in Section 41B.6(b) with respect to that Building. Any such offer of Sale to a Qualified Nonprofit shall contain the same terms and conditions (including, but not limited to, price, time frame to close the Sale, and commission to the Purchaser’s broker) as the offer of Purchase previously received by the Seller which the Seller wishes to accept or the offer of Sale previously made by the Seller which a Purchaser has expressed a desire to accept, except that the terms and conditions in the offer of Sale to a Qualified Nonprofit shall not be inconsistent with the applicable timeframe described in subsection (c) or (d). The Seller shall submit such an offer of Sale in writing, as well as all terms of the offer and all disclosures provided to the Purchaser, to a Qualified Nonprofit on the same calendar day (and, to the extent possible, at the same time) to each of the e-mail addresses for any Qualified Nonprofits that have previously made an offer of purchase under Section 41B.6(f) with respect to the relevant Building, or that were not

previously given the opportunity described in Section 41B.6(b) with respect to that Building. If in the past year the Seller has not previously made the disclosures set forth in Section 41B.6(c) and Section 41B.6(e) with respect to the Multi-Family Residential Building, the Seller shall include those disclosures with any offer of Sale required by this subsection (b). (c) Time for Qualified Nonprofits to Accept Offer, in General. Except as provided in subsection (d), no later than 11:59 p.m. on the fifth full calendar day after a Seller has submitted an offer of Sale under subsection (b) to a Qualified Nonprofit via e-mail, that Qualified Nonprofit shall notify the Seller and every other Qualified Nonprofit, via e-mail, of its decision to accept or reject the Seller’s offer of Sale. If, during this time period, any Qualified Nonprofit that has received such an offer of Sale decides to accept the Seller’s offer of Sale, that Qualified Nonprofit shall immediately notify the Seller and every other Qualified Nonprofit of that decision, via e- mail. After a Qualified Nonprofit notifies the Seller of its decision to accept the Seller’s offer of Sale, and notwithstanding any defect in that Qualified Nonprofit’s notice to other Qualified Nonprofits, that Qualified Nonprofit shall be deemed to have accepted the offer of Sale, and no other Qualified Nonprofit may accept the Seller’s offer of Sale, whether or not the time period described in this subsection (c) has elapsed. (d) Time for Qualified Nonprofits to Accept Offer, Absent Prior Opportunity to Exercise Right of First Offer. Notwithstanding subsection (c), if Qualified Nonprofits have not previously had an opportunity to exercise the right of first offer set forth in Section 41B.6 with respect to the Sale of a Multi-Family Residential Building (because, for example, the Seller of the Building has received an unsolicited offer to Purchase the Building), each Qualified Nonprofit shall notify the Seller and every other Qualified Nonprofit, via e- mail, of its decision to accept or reject the Seller’s offer of Sale no later than 11:59 p.m. on the 30th full calendar day after the Seller has, pursuant to subsection (b), notified the Qualified Nonprofit of its intent to Sell a Multi-Family Residential Building. The Seller shall provide to each Qualified Nonprofit, via e-mail, the terms and conditions of such offer of Sale and the disclosures required by Section 41B.6(c), Section 41B.6(e), and Section 41B.7(b). Upon request, the Seller shall exhibit the Building to each Qualified Nonprofit that has expressed interest in the Building and cooperate with efforts to inspect the condition of the Building. If, during this time period, any Qualified Nonprofit decides to accept the Seller’s offer of Sale, that Qualified Nonprofit shall immediately notify the Seller and every other Qualified Nonprofit of that decision, via e-mail. After a Qualified Nonprofit notifies the Seller of its decision to accept the Seller’s offer of Sale, and notwithstanding any defect in that Qualified Nonprofit’s notice to other Qualified Nonprofits, that Qualified Nonprofit shall be deemed to have accepted the offer of Sale, and no other Qualified Nonprofit may accept the Seller’s offer of Sale, whether or not the time period described in this subsection (d) has elapsed. (e) Qualified Nonprofit’s Acceptance of Offer. If, in accordance with subsection (c) or (d), as applicable, a Qualified Nonprofit notifies the Seller that the Qualified Nonprofit has decided to accept the Seller’s offer of Sale, the Seller shall proceed to Sell the Multi- Family Residential Building to that Qualified Nonprofit in a manner consistent with the offer of Sale. A Qualified Nonprofit that so notifies the Seller (that is, before any other Qualified Nonprofit so notifies the Seller) shall be obliged to Purchase the Multi-Family Residential Building in a manner consistent with the offer of Sale. (f) Qualified Nonprofits’ Rejection of Offer. If, at or before the deadline set forth in subsection (c) or (d), as applicable, each Qualified Nonprofit that has received an offer of Sale has notified the Seller that it does not wish to accept the Seller’s offer of Sale, the Seller may immediately proceed with the Sale of the Multi-Family Residential Building, consistent with the offer of Purchase or offer of Sale that the Seller previously received from, or made to, a Purchaser other than a Qualified Nonprofit, as described in subsection (b). If, after the deadline set forth in subsection (c) or (d), as applicable, no Qualified Nonprofit has notified the Seller that it has decided to accept the Seller’s offer of Sale, the Seller may likewise immediately proceed with the Sale of the Multi-Family Residential Building, consistent with such offer of Purchase or offer of Sale. If, however, the Seller does not proceed with the Sale of the Building in a manner consistent with such offer of Purchase or offer of Sale, and instead receives from a Purchaser other than a Qualified Nonprofit a materially different offer to Purchase the Multi-Family Residential Building that the Seller wishes to accept, or makes a materially different offer to Sell the Multi-Family Residential Building that a Purchaser other than a Qualified Nonprofit expresses a desire to accept, that materially different offer of Purchase or offer of Sale shall be considered a new offer of Purchase or offer of Sale for purposes of subsection (b). (g) Conditional Third-Party Sales Agreements Permitted. If, as described in subsection (b), the Seller of a Multi-Family Residential Building receives from a Purchaser other than a Qualified Nonprofit an offer to Purchase the Multi-Family Residential Building that the Seller wishes to accept, or if the Seller of a Multi-Family Residential Building makes an offer to Sell the Multi-Family Residential Building that a Purchaser other than a Qualified Nonprofit expresses a desire to accept, that of

ller of a Multi-Family Residential Building receives from a Purchaser other than a Qualified Nonprofit an offer to Purchase the Multi-Family Residential Building that the Seller wishes to accept, or if the Seller of a Multi-Family Residential Building makes an offer to Sell the Multi-Family Residential Building that a Purchaser other than a Qualified Nonprofit expresses a desire to accept, that offer of Sale or offer of Purchase may be accepted subject to the contingency that no Qualified Nonprofit exercises the right of first refusal conferred by this Section 41B.7. In such a circumstance, the Seller and the Purchaser shall each expressly acknowledge, in writing, that the Purchaser’s Purchase of the Multi-Family Building will not occur if a Qualified Nonprofit exercises the right of first refusal conferred by this Section. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019; amended by Ord. 228-20, File No. 200948, App. 11/13/2020, Eff. 12/14/2020)

PROTECTIONS. Any Multi-Family Residential Building Purchased by a Qualified Nonprofit under the first-right-to-purchase conferred by this Chapter 41B shall be maintained as rent-restricted affordable housing in perpetuity. For purposes of this Section 41B.8, “rent-restricted affordable housing” shall mean that the mean value of all rents paid by residential tenants in the Building shall not exceed 80% of Area Median Income, and that the gross household income of new tenants in the Building shall not exceed 120% of Area Median Income. A Qualified Nonprofit may convert such Multi-Family Residential Building maintained as rent-restricted affordable housing into a limited equity housing cooperative under Subdivision Code Division 11, provided that such Qualified Nonprofit shall fully comply with the

requirements of Subdivision Code Division 11 and such Multi-Family Residential Building shall remain restricted as affordable housing consistent with this Section in perpetuity under a new Notice of Special Restriction. The Agency shall establish procedures to ensure that each Building acquired under this Chapter is subject to a Notice of Special Restrictions that: (a) sets forth the manner in which that Building shall be preserved as rent-restricted affordable housing, and (b) provides that no existing residential tenants at the time of the Purchase or new residential tenants following the Purchase may be evicted without just cause consistent with the substantive provisions of Administrative Code Section 37.9(a). (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019; amended by Ord. 228-20, File No. 200948, App. 11/13/2020, Eff. 12/14/2020)

(a) Access to Buyers. The Agency shall endeavor to maintain and publicize the list of Qualified Nonprofits described in Section 41B.4 in a manner that, to the maximum extent feasible, promotes the existence of the Qualified Nonprofits as a readily accessible pool of potential buyers for Multi-Family Residential Buildings. The Agency shall, to the maximum extent permitted by law and otherwise feasible, publicize the existence of this list in a manner intended to facilitate voluntary sales to Qualified Nonprofits in a manner that avoids or minimizes the need for a broker, other search costs, or other transaction costs. (b) Partial City Transfer-Tax Exemption. As set forth in Section 1108.6 of the Business and Tax Regulations Code, the increased tax rate imposed by subsections (d), (e), and (f) of Business and Tax Regulations Code Section 1102 shall not apply with respect to any deed, instrument or writing that effects a transfer under Section 41B.6 of this Administrative Code, as Administrative Code Section 41B.6 exists as of the effective date of the ordinance in Board File No. 181212. (c) Potential Federal Tax Benefits. Any Qualified Nonprofit that Purchases a Multi-Family Residential Building under the right of first offer set forth in Section 41B.6 shall, to the maximum extent permitted by law and otherwise feasible, be obliged to work with the Seller in good faith to facilitate an exchange of real property of the kind described in 26 U.S.C. § 1031, for the purpose of facilitating the Seller’s realization of any federal tax benefits available under that section of the Internal Revenue Code. (d) Information to Sellers. The Agency shall produce an information sheet describing the benefits of a Seller’s decision to accept a Qualified Nonprofit’s offer of Purchase made in connection with the right of first offer set forth in Section 41B.6. The information sheet shall further explain that, even if a Seller does not accept a Qualified Nonprofit’s offer to Purchase a Multi-Family Residential Building pursuant to the right of first offer set forth in Section 41B.6, the Building will still be subject to the right of first refusal set forth in Section 41B.7. The information sheet shall contain a field in which the Seller may acknowledge, in writing, that the Seller (or the Seller’s authorized representative) has read and understood the information sheet. A Qualified Nonprofit that makes an offer to Purchase a Multi-Family Residential Building under the right of first offer set forth in Section 41B.6 shall include a copy of, or link to, this information sheet with that offer of Purchase, but any failure to comply with this Section 41B.9(d) shall have no effect on a Qualified Nonprofit’s exercise of the right of first offer set forth in Section 41B.6. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019)

New Ordinance Notice Publisher's Note: This section has been ADDED by new legislation (Ord. 79-19 , approved 5/3/2019, effective 6/3/2019). The text of the section will be included below when the enacting legislation is effective. (a) Seller Certification. Every Seller of a Multi-Family Residential Building in the City shall, within 15 days of the Sale of that Building, submit to the Agency a signed declaration, under penalty of perjury, affirming that the Sale of that Building substantially complied with the requirements of this Chapter 41B . Each such declaration shall include the address of the relevant Building; the Agency shall publish all such addresses on its website at least once per week. Failure to file the declaration required by this subsection (a) shall be an infraction punishable to the maximum extent provided by Section 36900(b) of the California Government Code. (b) Civil Action. In the event that a Seller Sells a Multi-Family Residential Building without substantially complying with the requirements of this Chapter 41B , a Qualified Nonprofit may institute a civil action, in a court of competent jurisdiction, to remedy that violation of this Chapter, in a manner consistent with subsections (c) and (d).

(c) Remedies. Remedies in a civil action brought under this Section 41B.10 shall include, but need not be limited to, the following, which may be imposed cumulatively: (1) Damages in an amount sufficient to remedy the harm to the Qualified Nonprofit. There shall be a rebuttable presumption that this amount is equal to the difference between the price of the relevant Multi-Family Residential Building at the time of the Sale made in violation of this Chapter 41B, and the price for which the Qualified Nonprofit could purchase that Multi-Family Residential Building at the time when damages are awarded; (2) If the Seller’s violation of this Chapter was knowing or willful, mandatory civil penalties in an amount proportional to the culpability of the Seller and the value of the relevant Multi-Family Residential Building. There shall be a rebuttable presumption that this amount is equal to 10% of the Sale price of the Multi-Family Residential Building for a first willful or knowing violation of this Chapter, 20% of the Sale price for a second willful or knowing violation, and 30% of the Sale price for each subsequent willful or knowing violation. Civil penalties assessed under this subsection (b)(2) shall be payable to the Citywide Affordable Housing Fund established by Section 10.100-49 of the Administrative Code; (3) Reasonable attorneys’ fees; and (4) Such other remedies as might be available under State law, except to the extent that any such remedies would be inconsistent with subsection (d). (d) Limitation on Remedies. Any remedy imposed in a civil action under this Section 41B.10 shall be imposed only against the Seller or a party that has willfully colluded with the Seller to violate this Chapter 41B . In no event shall any such remedy deprive the Purchaser of a Multi-Family Residential Building of any interest in that Multi-Family Residential Building, or otherwise affect any property interest held by the Purchaser, unless the Purchaser willfully colluded with the Seller to violate this Chapter. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019)

The Agency shall have the power to interpret and implement this Chapter 41B. The Agency shall, within 90 days of the effective date of this Chapter, promulgate appropriate rules or regulations interpreting and implementing this Chapter, including the establishment of procedures to implement this Chapter, in a manner that the Agency deems most appropriate. The Agency may thereafter revise those rules or regulations from time to time. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019)

In enacting and implementing this Chapter 41B, the City is assuming an undertaking only to promote the general welfare. It is not assuming, nor is it imposing on its officers and employees, an obligation for breach of which it is liable in money damages to any person who claims that such breach proximately caused injury. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019)

Nothing in this Chapter 41B shall be construed to conflict with any State or Federal law, or with any provision of the Charter. (Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019)

If any section, subsection, sentence, clause, phrase, or word of this Chapter 41B, or any application thereof to any person or circumstance, is held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions or applications of the Chapter. The Board of Supervisors hereby declares that it would have passed this Chapter and each and every section, subsection, sentence, clause, phrase, and word not declared invalid or unconstitutional without regard to whether any other portion of this Chapter or application thereof would be subsequently declared invalid or unconstitutional.

(Added by Ord. 79-19, File No. 181212, App. 5/3/2019, Eff. 6/3/2019)