HOTEL CONVERSION ORDINANCE
LEGISLATIVE HISTORY : The Residential Hotel Unit Conversion and Demolition Ordinance ( HCO ) was originally adopted by the Board of Supervisors on June 26 , 1981 in order to preserve the existing stock of residential guest rooms as housing for low-income , elderly , and disabled persons . The Board found it necessary to adopt legislation that would minimize the loss of residential guest rooms since this stock of housing had been decreasing at an alarming rate due to conversion and demolition .
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RESIDENTIAL HOTEL CERTIFICATION : Beginning in 1981 , the HCO required all hotel and apartment house owners and operators with guest rooms to report to the Bureau of Building Inspection ( now the Department of Building Inspection ) how the guest rooms were being used on September 23 , 1979 . If the guest room was actually occupied by a tenant for thirty-two consecutive days or longer , the room was designated as residential . Guest rooms occupied by a tenant for thirtytwo days or longer , were designated residential . Guest rooms occupied less than thirty-two days were designated as tourist . The property owner / operator had fifteen days to appeal the certification of these designations by the Bureau of Building Inspection .
Now , a hotel is considered residential if it has one or more residential guest rooms as certified by the HCO . Approximately five hundred ( 500 ) hotels are designated residential by Chapter 41 of the S . F . Administrative Code , which includes those hotels owned or operated by nonprofit organizations . The overall number of residential hotels can fluctuate because the Ordinance permits a hotel to change its residential designation upon approval of a Permit to Convert application . The Permit to Convert requires the hotel owner to replace the converted residential guest rooms at a rate of one-for-one ; or to pay an in lieu ( replacement housing ) fee .
OPERATION REQUIREMENTS All residential hotels which do not have documentation on file with the Department of Building Inspection indicating that the hotel is operated by a nonprofit agency ( recognized by the IRS ) must file an Annual Unit Usage Report on November 1st every year . These residential hotels must also maintain records of use . Required records of use include daily logs , weekly reports , and corresponding rent receipts . Hotel owners / operators must maintain two years of records of use on site . The Certificate of Use indicating the number of residential and tourist guest rooms assigned to the hotel must be posted at the hotel lobby along with the weekly report .
Residential hotel owners and operators are prohibited from renting , or offering to rent , any rooms certified as residential guest rooms under the HCO for a “ Tourist or Transient Use ”. A “ Tourist or Transient Use ” is defined as any use of a guest room for less than a 30-day term of tenancy by a party other than a permanent resident . This definition of “ Tourist or Transient Use ”, however , is currently the subject of a legal challenge . Accordingly , the City has agreed to enforce a 7-day term of tenancy minimum pending full resolution of the lawsuit .
The Housing Inspection Services Division maintains files on residential hotels which are available for public review . These files contain documentation required by Chapter 41 of the S . F . Administrative Code , such as the Certificate filings have been resolved .
Department of Building Inspection | Fiscal Year 2018 - 19 Annual Report
of Use , filed Annual Unit Usage Reports and documents regarding enforcement activities .
SUMMARY OF ENFORCEMENT EFFORTS : Notices of Violation Issued for Recordkeeping Violations and / or Unlawful Conversion : HIS issued 2 Notices of Violation which cited a residential hotel ’ s failure to meet Chapter 41 requirements . Upon issuing these Notices , both of the cited hotels cooperated with HIS and immediately came into compliance .
Notices of Apparent Violation Issued for Recordkeeping Violations HIS issued 10 Notice of Apparent Violation , most of which cited the subject residential hotels ’ failures to properly maintain and post the required records of use . Of the 10 NAVs issued , 7 were resolved . The remaining three NAVs are open and the subject hotels are being monitored to ensure the recordkeeping requirements are being met .
Annual Unit Usage Reports Every November 1st all 393 for-profit residential hotels under the jurisdiction of Chapter 41 of the San Francisco Administrative Code are required to file a report which shows how these protected residential guest rooms are occupied throughout the year . In particular , the AUUR require hotel owners to report on the number of occupied and vacant guest rooms as of October 15th of the reporting year , and on the types of services provided to permanent residents ( maid service , utilities , internet , etc .). Additionally , a graphic floor plan for each floor of occupancy as well as Daily Logs , which show the occupied and vacant guest rooms must be submitted with each AUUR filing .
Penalties Assessed for Failing to File the Annual Unit Usage Reports Hotels that fail to file the AUUR are sent delinquent notices beginning on December 1st . These notices explain that an owner / operator has 15 calendar days to file the delinquent Annual Unit Usage Report before a $ 1,000.00 per month penalty will be assessed per Section 41.10 ( g ). If after the 15-day compliance period has passed and no AUUR has been received , a penalty assessment notice is sent out . This year , 15 penalty notices for failing to file the AUUR were issued . Of these 15 failure to file penalty assessments , 11 have been resolved and 4 remain outstanding .
Penalties Assessed for Failing to Correct Insufficient Annual Unit Usage Report Filings Hotels that file an incomplete or insufficient AUUR are sent official notices outlining the deficiencies of the insufficient filings via Certified Mail to the hotel owner . These official notices , which follow at least one informal attempt at obtaining a complete AUUR filing , explain that the owner / operator has 15 days to file a complete report before a $ 500.00 per day penalty is assessed . This year 2 penalty assessment notices for insufficient filings were issued . Both of these insufficient