Author: Eric Baird

San Francisco Rent Increase 2026: What the 1.6% Allowable Increase Means for Landlords and Tenants

Posted: January 2026
Prepared by ReLISTO

Each year, San Francisco sets a citywide limit on how much rent can be increased for rent-controlled apartments. For rent increases effective March 1, 2026 through February 28, 2027, the San Francisco allowable rent increase is 1.6%.

This percentage applies to San Francisco rent control units and is published annually by the San Francisco Rent Board. While the percentage itself is straightforward, how it was calculated this year — and how it should be applied — is not.

Behind the 1.6% figure is an unusual situation involving missing federal inflation data, a temporary adjustment by the Rent Board, and a calculation process that many landlords and tenants are understandably confused about. Below is a clear explanation of what happened, what the current rent increase rules are, and how to calculate a lawful rent increase correctly.

How San Francisco Rent Increases Are Normally Calculated
Under the San Francisco Rent Stabilization Ordinance, annual rent increases are tied to inflation using the Consumer Price Index (CPI) for the San Francisco region.
Normally:
– The Rent Board compares October-to-October CPI data
– The allowable rent increase equals 60% of inflation
– The result is rounded to the nearest tenth
– The increase is capped at 7%
– The increase becomes effective March 1 each year

This methodology has been used consistently for decades and applies to most rent-controlled apartments in San Francisco.

Why the 2026 San Francisco Rent Increase Was Different
In 2025, a federal government shutdown prevented the U.S. Bureau of Labor Statistics from publishing the October 2025 CPI. The BLS later confirmed that this data will never be published retroactively.

Because San Francisco law specifically requires an October-to-October comparison, the Rent Board could not calculate the annual allowable rent increase using its normal method — not just for 2026, but for two consecutive years. This created a technical problem, not a policy change.

How the San Francisco Rent Board Calculated the 1.6% Increase
To address the missing CPI data, the Rent Board considered two approaches. The method ultimately used was to estimate the missing October 2025 CPI using a recognized statistical technique called a geometric mean.

In simple terms:
– The Rent Board used published CPI data from August 2025 and December 2025
– It calculated the midpoint between those two figures
– That estimate was used in place of the missing October data

This approach allowed the Rent Board to:
– Rely only on published federal CPI data
– Preserve the long-standing October-to-October framework
– Avoid skipping or double-counting inflation

Using this method, the San Francisco allowable rent increase for 2026 was set at 1.6%.

What Happens in 2027 (and Beyond)
Because the October 2025 CPI was never published, a similar temporary methodology will be required again for the 2027 allowable rent increase.

Once the CPI timeline fully moves past the missing data, the Rent Board can return to its standard calculation method. In other words:
– 2026 and 2027 are transition years
– Future years will return to the normal process

What the 1.6% Rent Increase Means for Landlords and Tenants
Here’s what matters in practice:
– 1.6% is the maximum allowable rent increase for covered units
– The increase applies to rent increases effective on or after March 1, 2026
– Banked rent increases may still be applied where allowed
– Rent control coverage and tenant protections have not changed
– Improperly calculated increases may be partially or fully unlawful

Because banked rent and rounding rules apply, two landlords using the same percentage may still end up with different lawful rents.

Calculate Your San Francisco Rent Increase
San Francisco publishes the annual allowable rent increase percentage, but it does not provide a calculator that applies the increase to a specific unit or accounts for banked rent. That calculation is left to landlords and tenants to perform correctly.

ReLISTO’s San Francisco Rent Increase Calculator fills that gap. It allows landlords and tenants to calculate rent increases down to the penny, including the correct application of banked rent under San Francisco rent control.


Use the calculator here:
https://www.relisto.com/calculators/calculator/rent-increase

The tool is designed to eliminate guesswork, reduce disputes, and help both parties clearly understand what is — and is not — allowed per City guidelines. Best of all its free and you don’t need to enter any personal data!
If you’re planning a rent increase or reviewing one you’ve received, using a precise, rules-based calculator is one of the easiest ways to stay compliant and informed.

ALERT: Update to California Security Deposit Law — AB 414 Now in Effect

Posted: January 2026
Prepared by ReLISTO
A new California law — Assembly Bill 414 (AB 414) — is now in effect and will significantly change how landlords and property managers handle security deposits.

This law was passed in October 2025 and became active almost immediately, applying to new tenancies starting in 2026. While the intention may be to protect tenants, the speed of implementation presents real challenges for small landlords and housing providers.

What Changed?
The biggest change is this: If your tenant pays their security deposit through wire, ACH, or Zelle, you are now required to return it in the same manner — unless the tenant provides written authorization for you to return it another way (like by check). This is now part of California Civil Code §1950.5(h).

What Landlords Must Do
If you accept deposits electronically and want to return the deposit by check, you must obtain a written agreement from the tenant stating they agree to that method.

A landlord failing to follow this could result in:

  • Loss of the right to claim any portion of the deposit
  • Statutory damages of up to twice the deposit amount

Sample Agreement Language (For Tenants to Sign)

You can use the following clause or form to get written consent to return the deposit by check:

Security Deposit Return – Alternative Payment Method Agreement

This Addendum is incorporated into and made part of the Residential Lease Agreement
between Landlord and Tenant.

1. Acknowledgment of Electronic Payment
Tenant acknowledges that the security deposit was paid electronically, including but not
limited to payment by ACH, wire transfer, Zelle, or an online payment platform.

2. Notice of Statutory Right
Tenant is hereby notified that, under California Civil Code §1950.5, as amended by Assembly
Bill 414, when a security deposit is paid electronically, the Tenant has the right to receive
any refund of the security deposit electronically in the same manner or by an electronic method.

3. Voluntary Agreement to Alternative Method
Tenant voluntarily elects and agrees to receive any refund of the security deposit by check,
rather than electronically. Tenant understands that this election is optional and is not
required as a condition of tenancy.

4. Delivery of Refund
The refund check shall be made payable to the Tenant and mailed to the forwarding address
provided by Tenant within 21 days of move-out. If Tenant does not provide a forwarding address,
the refund check shall be mailed to Tenant’s last known address in compliance with applicable law.

5. No Waiver of Other Rights
This Addendum applies solely to the method of refund delivery and does not waive or alter any
other Tenant rights under California law, including but not limited to the statutory timeframe
for return of the security deposit and the requirement for an itemized statement of deductions.

Tenant Acknowledgment and Agreement

By signing below, Tenant acknowledges receipt of this notice, understands their right to receive
an electronic refund, and voluntarily agrees to the alternative refund method described above.

Tenant Name(s): _______________________________

Tenant Signature(s): __________________ Date: ____________

Landlord/Agent Signature: _____________ Date: ____________

Disclaimer: This sample agreement is provided for informational purposes only and does not constitute legal advice. Use of this form does not guarantee compliance with California Civil Code §1950.5 or other applicable laws. Landlords and property managers are strongly encouraged to consult with qualified legal counsel to ensure that any security deposit procedures, forms, or agreements are compliant with current state and local laws. ReLISTO and its affiliates are not responsible for any liability or damages arising from the use or misuse of this form.

Summary of California Security Deposit Laws (As of 2026)
Since there have been multiple changes lately, I have listed below a  summary of the most current rules as we understand them that California landlords must follow:

 Security Deposit Limits
– 1 month’s rent max for most rentals
– 2 months’ rent max only allowed for: Individual landlords or LLCs of natural persons or Owning no more than two properties totaling four units
– Service members: Never more than 1 month’s rent

Deadline to Return: Must return any unused portion of the deposit within 21 calendar days after the tenant vacates.

Return Method
– If paid electronically: Must be returned electronically
– Can only return via check if: The tenant signs a written agreement allowing it
– For multiple tenants: Default: Check made payable to all adult tenants. Can be changed with a written agreement (as will be required if sending electronically)

Required Photos
– Before tenancy begins
– After move-out, both: Before deductions/repairs and After work is completed
– Photos must be shared with the tenant via email, mail, or online link

Itemized Statement Requirements
Must include:
– Reasonable breakdown of deductions
– Receipts/invoices
– Labor costs with hourly rates
– Photos of damage or cleaning issues
– Can be delivered by mail or email (email only with tenant’s written/signed consent)

What Can Be Deducted
Allowed:
– Unpaid rent
– Damage beyond normal wear
– Cleaning to restore to move-in condition
Not allowed:
– Normal wear and tear
– Pre-existing conditions

Optional Pre-Move-Out Inspection
Tenants have the right to request a walkthrough before moving out. Landlords must:
– Give 48-hour notice
– Provide an itemized list of deductions
– Allow time to correct issues

Penalties for Non-Compliance
If a landlord wrongfully withholds a deposit or violates return procedures:
– May owe up to 2x the deposit in damages
_ The burden of proof falls on the landlord

Why This Matters
While the intent behind AB 414 is to improve transparency and strengthen tenant protections, the speed of its implementation has left many small landlords and property managers with little time to adjust internal systems and documentation. If you are a legislator, I strongly urge you to consider allowing more time between the passage and the enforcement of new housing laws — a one-year implementation window would be a reasonable and fair standard.

At ReLISTO, we remain committed to helping our landlord clients stay compliant, stay informed, and navigate the ever-changing landscape of California rental laws. We advocate for landlords while supporting independent owners in securing qualified tenants, and we also provide full-service property management.

We proudly serve San Francisco, the Peninsula, East Bay, North Bay, and surrounding areas. Contact us if you need expert help with leasing or managing your rental property — whether it’s a home, condo, or apartment.

 

What California’s AB 246 Means for Property Owners & Managers

As your partner in property management, I want to keep you fully informed of major legislative changes so you’re always ahead of the curve. One of the most relevant recent developments is Assembly Bill 246 (AB 246), which was signed into law on October 6, 2025 (an urgency statute) and is effective immediately.
Here’s a breakdown of what it does—and what you, as a property owner, need to know.

Key Provisions

  • AB 246 enacts the Social Security Tenant Protection Act of 2025.
  • Until January 20, 2029, the law allows a tenant to assert what it calls “Social Security hardship” as an affirmative defense in an unlawful‑detainer (eviction) action based on nonpayment of rent.
  • “Social Security hardship” is defined as a loss of income due to a delay, termination or reduction of benefits from the Social Security Administration (SSA) that is through no fault of the tenant.
  • If a tenant successfully proves hardship, the court must stay (pause) the unlawful‑detainer proceeding (i.e., cannot proceed with eviction immediately) until:
    1. the tenant’s Social Security benefits are restored + 14 days, or
    2. up to 6 months from the start of the benefit interruption, whichever comes first.
  • The tenant is not relieved of the obligation to pay past‑due rent. Within 14 days of restoration of benefits they must either pay the back‑rent in full or enter a mutually agreed payment plan with the owner.
  • The law requires notices and tailored “3‑day” demand notices for rent due during a declared benefit interruption; if those notices don’t comply with the new form/requirements, they may be void and not support eviction.

What this means for you as an owner and for ReLISTO’s role

  1. Increased legal complexity in eviction proceedings.
    Because of AB 246, if a tenant claims their inability to pay rent is directly due to an interruption of SSA benefits, an eviction for nonpayment becomes more complicated. The law triggers protections during a “declared Social Security benefit payment interruption.” That means we must properly monitor notices, ensure our demand letters comply with any new requirements, and be prepared for potential stays in unlawful‑detainer actions.

➤ As your property manager, ReLISTO will handle that compliance burden: drafting or reviewing notices, tracking any SSA‑related claims, and coordinating with counsel when needed.

  1. Watch for triggers: benefit payment interruptions.
    The law is specifically triggered during a declared Social Security benefit payment interruption, which the bill defines as a disruption of SSA payments of 3 or more calendar days beyond scheduled disbursement.

➤ While benefit interruptions are not common, as of this writing, we are currently experiencing shut down of the Federal Government. For our clients who have SSA tenants this law means we must be alert to any federal or SSA announcements of delay, and document if a tenant claims such an interruption.

  1. Tenant obligation remains; backlog risk remains.
    It’s important to emphasize: the law doesn’t forgive rent. The tenant must pay past‑due rent or enter into a plan once benefits restore. The property owner’s right to rent is still intact. The difference is the eviction procedure is delayed or suspended under certain circumstances.

➤ From a management perspective, we will continue documenting rental debt, communicating with tenants, and working quickly to address defaults. At the same time, we’ll incorporate the new procedural timeline into our tracking.

  1. Procedure for demand notices must change.
    AB 246 requires that during an interruption, notices for covered rental debt must include a declaration of Social Security‑related financial distress, and inform the tenant of their right under the Act. If a notice fails to comply, it may be void and cannot support an unlawful‑detainer judgment.

➤ If SSI benefits are interrupted, we will update our 3-day notices (and other related demand documents) accordingly. This is part of the standard compliance service we provide to all properties under ReLISTO management.

Risk Management Isn’t Optional—It’s What We Do

Assembly Bill 246 introduces a new legal defense for tenants, and with that comes more complexity for landlords. But here’s the thing: when you work with ReLISTO, you’re not navigating it alone.

We’ve already dialed in the risk management protocols to protect your investment. That means:

  1. Maintaining clear, detailed records of rent payment history, defaults, notices, and tenant communications.
  2. Responding quickly and consistently to any nonpayment—so there’s no ambiguity or delay that could weaken your position.
  3. Collaborating with our legal team to assess any tenant claim of Social Security hardship and prepare a strategic response.

In short, we’re already doing what the law now demands. While AB 246 may catch some owners off guard, ReLISTO clients can be confident that if enacted—we will be  ahead of it.

The Good News

  • As of today, there has been no declared cessation or delay in Social Security benefits. That means AB 246 has not yet been triggered, and landlords are not currently required to serve special notices under this law.
  • If your tenant is late on rent, you may proceed as you normally would—with your standard 3-day notice to pay or quit, following existing protocols.
  • ReLISTO will continue to monitor developments closely. If the situation changes, we’ll notify our clients who may be impacted and be ready with compliant templates and procedures to protect your interests.
  • Until then, stay the course—and know that ReLISTO has you covered.

About ReLISTO
ReLISTO is a full-service property management and leasing brokerage based in San Francisco, California. We specialize in residential property solutions for independent landlords, HOAs, and portfolio owners throughout the Bay Area. Our services include tenant placement, lease execution, regulatory compliance, and ongoing property management—delivered with a focus on professionalism, risk mitigation, and proactive service.

With decades of combined experience and a deep understanding of California’s evolving rental landscape, ReLISTO is committed to protecting our clients’ investments and providing tenants with quality housing experiences. Whether you’re seeking long-term management or simply need help leasing your unit, ReLISTO is your trusted partner in rental real estate.