Property owners warn that in-law legalization carries rent control risk

Allowing San Francisco landlords to legalize their heretofore-outlawed “in-law” units would also create more rent-controlled housing, a property owners group warns.

There are as many as 40,000 in-law apartments — small living spaces often built in garages or basements of older housing stock — in The City. Many in-laws were built without the proper permits and are illegal, but are nonetheless considered an invaluable source of below-market-rate housing in housing-starved San Francisco.

Under state law, multiunit housing built before 1979 is subject to rent stabilization. But those controls don’t extend to single-family homes like the Mediterranean-style residences dotting the Sunset and Richmond districts. Landlords would be able to legalize in-law units as a “legal nonconforming use” under legislation introduced Nov. 26 by Board of Supervisors President David Chiu. Housing and immigrant advocates both back the idea, which would give tenants of these units added legal protection and incentive to report unsafe housing conditions.

But landlords would also have an incentive to keep the units illegal forever, according to the Small Property Owners Institute of San Francisco. The group notes that legalizing the in-law would put the entire home under rent control as a multiunit building.

Single-family homes and condominiums both have higher value on the market because future renters wouldn’t enjoy such protections, according to Noni Richen, president of the Small Property Owners Institute.

“Once a unit is legalized, the building cannot revert to being a single-family home, exempt from rent control,” she wrote on the group’s website.

Chiu’s proposed legislation has yet to be heard in committee.Bay Area Newsbelow market rate housingDavid Chiuin-law unitsneighborhoods

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