Department of Building Inspection Annual Report Fiscal Year 2016-2017 | Page 21

Legislative History Reports and Records Required
The Residential Hotel Unit Conversion and Demolition
Ordinance (HCO) was originally adopted by the Board of
Supervisors as Ordinance No. 330-81 on June 26, 1981.
The Board found that the Ordinance was necessary to
preserve the existing stock of residential guest rooms as
housing for low-income, elderly, and disabled persons.
The Board noted in 1981 that the residential guest room
housing stock had been decreasing at an alarming rate due
to vacation, conversion, and demolition of these units to
tourist and other uses. The Board found that this reduction
created a housing emergency and adopted Chapter 41 of
the S. F. Administrative Code to minimize the conversion and
demolition of residential guest rooms. 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 (recognized by the IRS) must file an Annual
Unit Usage Report on November 1 every calendar year. These
residential hotels must also maintain daily logs, weekly reports,
and corresponding receipts for up to two years. 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 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 32 consecutive days or longer, the
room was designated as residential. If the guest room was
occupied for less than 32 days the room was designated
tourist. The property owner/operator had fifteen days to
appeal the certification of these designations by the Bureau
of Building Inspection.
Residential Hotel Description
A hotel is considered residential if it has one or more residential
guest rooms as certified by the HCO. Approximately five
hundred and two (502) 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.
Residential guest rooms can be legally converted to tourist
uses with approval by the Director of Building Inspection. The
Permit to Convert requires the hotel owner to replace the
converted residential guest rooms with in lieu (replacement
housing) fees, the construction of new units, or the creation
of new residential guest rooms in an existing building.
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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
32-day term of tenancy by a party other than a permanent resident.
From May 1 through September 30, residential hotel operators may
rent twenty-five percent of their residential guest rooms on a nightly
basis provided that the guest room was occupied for at least 50
percent of the period of October 1 through April 30, and is now
legitimately vacant and offered for residential use first. However, a
residential hotel that fails to maintain the requisite records or illegally
converts residential guest rooms will not be eligible for temporary
tourist rentals for twelve (12) months.
Residential hotel owners may apply to rent residential units for
tourist use during the winter months. Within the last five years, no
winter rentals have been applied for pursuant to Sections 41.19(a)
(3) and 41.19(c) of Chapter 41 of the S. F. Administrative Code.
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 of Use, filed Annual Unit
Usage Reports, and documents regarding enforcement activities.
Funds deposited into the San Francisco Residential Hotel
Preservation Fund Account are transmitted to the Mayor’s Office of
Housing for disbursal pursuant to Section 41.13 of Chapter 41 of
the S. F. Administrative Code. During this fiscal year one Permit to
Convert was approved which required replacement housing fees to
be deposited in the San Francisco Residential Hotel Preservation
Fund Account.
Summary of Enforcement Efforts
Delinquent notices are sent to residential hotel owners/operators
who have not filed their Annual Unit Usage Report (due November
1 every year) or are missing other historical information.
Department of Building Inspection, Fiscal Year 2016-2017 Annual Report
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