New restrictions could shift more financial risk onto rental property owners—and influence policies across California.

San Francisco’s nonpayment eviction threshold moves through City Hall as a broader legal battle takes shape statewide.

San Francisco housing providers may soon have another number to know before pursuing an eviction for unpaid rent.

Supervisor Jackie Fielder’s ordinance would generally prohibit eviction for unpaid rent below the federal government’s Fair Market Rent (FMR) for an equivalent-sized rental unit. The Board of Supervisors approved the measure in October, with final passage on October 27, 2026. As of October 29, city records list it with the Mayor’s Office, without an enactment date. The measure should not yet be treated as an operative rule.

Mayor Daniel Lurie has publicly supported the measure, as have several supervisors. That political backing has moved the proposal beyond a hypothetical policy debate and toward a potential change in how housing providers enforce payment obligations.

For housing providers accustomed to the traditional rule that unpaid lawful rent can support a three-day notice to pay rent or quit, the proposed restriction represents a significant change. San Francisco would not be the first Bay Area city to take this approach: Oakland and Berkeley already have similar restrictions, and Bornstein Law has dealt with their practical consequences firsthand.

A Different Way of Looking at Unpaid Rent

For decades, the basic premise was straightforward. If lawful rent became due and was not paid, a housing provider could generally serve a three-day notice to pay rent or quit, subject to applicable law. Serving a notice over a trivial balance might have been impractical, but there was no federally determined minimum arrears amount that first had to accumulate.

Daniel Bornstein recently put the change into perspective while discussing the rules already in effect in Oakland and Berkeley.

That analysis has changed in those East Bay cities. Before advising an owner whether a nonpayment case can proceed, we now need to know the unit size, the amount owed and the applicable FMR threshold. San Francisco is poised to bring that same basic concept across the Bay.

What Does Fair Market Rent Have to Do With an Eviction?

HUD publishes Fair Market Rents annually for different metropolitan areas and unit sizes. The numbers are familiar in the subsidized-housing world, but using FMR as an eviction threshold gives the federal benchmark an entirely different significance. For FY 2026, the San Francisco-area FMR is $2,485 for a studio, $2,977 for a one-bedroom and $3,604 for a two-bedroom.

The figures rise to $4,604 for a three-bedroom and $4,772 for a four-bedroom. Importantly, FMR is not necessarily what a particular tenant pays. A long-term rent-controlled tenant may have contractual rent substantially below FMR, while a subsidized tenant may personally be responsible for only a fraction of the property’s total rent. Under the San Francisco measure, that difference could determine how long a housing provider must wait before unpaid rent reaches the eviction threshold.

But Is San Francisco Really Experiencing an Eviction Crisis?

This is where the rationale surrounding the measure deserves closer examination.

In announcing his support, Mayor Lurie cited an increase in evictions. An increase can be consequential, but a percentage change by itself does not tell us whether the underlying level of filings is unusually high—or how many filings result in actual displacement.

There is a problem with that framing: something can be increasing without being unusually high.

We recently examined San Francisco’s eviction numbers because headlines about an “eviction surge” were not telling the entire story. Our analysis counted 3,654 unlawful-detainer lawsuits in 2025. Against approximately 235,275 renter households, that works out to roughly 1.55 filings for every 100 renter households.

For perspective, our analysis placed New York City’s filing rate at approximately five per 100 renter households, while the average among the more than 40 locations tracked by Eviction Lab was approximately eight per 100. Different jurisdictions have different laws, court systems, time frames and reporting practices, so these are not apples-to-apples comparisons. Still, the broader context matters: San Francisco’s calculated filing rate was substantially lower.

There is another problem with the rhetoric. A lawsuit is not an eviction.

A 3-day notice may never result in a lawsuit. An unlawful-detainer case may settle or be dismissed, and some settlements result in the tenant remaining in possession. Only some cases travel the entire path to a judgment for possession and an eventual sheriff lockout. Our previous examination of San Francisco’s numbers made this distinction explicit: a case can be resolved at multiple stages, and a lawsuit does not necessarily mean the tenant will ultimately be removed.

A Solution Should Start With the Right Diagnosis

None of this means that losing a home isn’t consequential, nor does it answer the separate policy question of whether someone should face eviction over a relatively small rent balance.

But those are different questions from whether San Francisco is experiencing an unusually high level of eviction.

If the concern is tenants actually losing their homes over nominal amounts of unpaid rent, it would be useful to know how frequently that occurs. How many nonpayment cases involve very small balances? How many are resolved before judgment? How many tenants remain in possession? And how many ultimately result in physical eviction?

Simply pointing to an annual percentage increase in filings doesn’t answer those questions.

That matters because the restriction extends considerably beyond preventing an eviction over a few dollars of unpaid rent. Depending on the tenancy, tying the right to pursue a nonpayment eviction to FMR can require a housing provider to carry a substantially larger unpaid balance.

Oakland and Berkeley already demonstrate how that can work in practice.

Subsidized Tenancies Expose the Problem

The consequences become particularly striking when a housing subsidy pays most of the monthly rent.

Daniel has used the example of a two-bedroom apartment renting for $3,000 per month. Suppose a housing subsidy pays $2,500 while the tenant is responsible for $500. If the tenant stops paying his or her portion, the housing provider doesn’t accumulate $3,000 in unpaid rent every month. The arrears attributable to the tenant grow by only $500.

Now apply that hypothetical to the threshold approved by San Francisco’s Board of Supervisors.

The FY 2026 FMR for a San Francisco-area two-bedroom is $3,604. After seven completely missed $500 tenant payments, the housing provider would be owed $3,500—still below that benchmark. An eighth missed payment would bring the unpaid tenant portion to $4,000.

The precise application of the rule will depend on the final enacted ordinance, its effective date and the facts of the tenancy. But the example illustrates the concern: a protection against eviction over a modest rent shortage could potentially require an owner to tolerate months of nonpayment before reaching the threshold.

Partial Payments Add Another Wrinkle

There is also the practical question of what happens when a tenant makes a partial payment as the unpaid balance approaches the threshold.

An unexpected partial payment should not be handled casually. Whether an owner may decline, return or retain a payment—and what happens after doing so—can depend on local ordinances, the rental agreement, subsidy-program requirements and the status of any notice or case.

Accepting a partial payment can have legal consequences, particularly when a nonpayment notice is being contemplated or has already been served. Housing providers should consult counsel before deciding how to handle an unexpected payment, rather than assuming a check, transfer or electronic payment can always be rejected without consequence.

Breathing Room Isn’t Free

Supporters describe the restriction as providing tenants with breathing room, and the objective is understandable. Losing a tenancy over an insignificant shortage is a harsh result, and prudent housing providers generally are not racing to court over a few missing dollars anyway.

But there is a meaningful difference between discouraging evictions over nominal balances and requiring unpaid rent to reach a federal housing benchmark that may bear little relationship to what the tenant actually pays.

While the balance accumulates, the property’s mortgage, taxes, insurance, utilities, repairs and other operating expenses don’t pause. The rent remains owed, but the remedy ordinarily associated with nonpayment may be temporarily unavailable.

For a tenant paying close to FMR, the delay may be relatively short. For a long-term rent-controlled tenant or a heavily subsidized tenancy, the difference between the tenant’s actual obligation and HUD’s benchmark can make the wait considerably longer.

That is why the San Francisco measure deserves scrutiny beyond the appealing idea of preventing someone from being evicted over a small rent shortage.

San Francisco’s filing rate appears comparatively low in our analysis. A filing is not synonymous with an eviction. And this kind of threshold could prevent housing providers from acting even after months of nonpayment by tenants whose actual rent obligations are substantially below FMR.

Those facts do not settle the policy debate. But they belong in it.

Why Owners Across California Should Be Paying Attention

San Francisco’s approach raises questions well beyond its city limits. Oakland and Berkeley already have similar restrictions, while Los Angeles has established its own monetary threshold for nonpayment evictions. What began as a series of local tenant protections has become a broader debate over how much unpaid rent a housing provider must absorb before seeking possession of a rental property.

That debate has reached California’s highest court. In August 2026, the California Supreme Court agreed to review a challenge involving Los Angeles’s threshold. The court will consider whether California’s unlawful-detainer law preempts local ordinances that require a minimum amount of unpaid rent before an owner may commence eviction proceedings. Its eventual decision could affect existing local rules and the authority of other cities to adopt similar measures.

For rental property owners elsewhere in California, the lesson is straightforward: a regulation adopted in San Francisco today could influence the policies debated in another community tomorrow. Even owners operating in jurisdictions without these restrictions should watch how local governments balance tenant protections against the financial obligations of providing rental housing.

After all, unpaid rent does not eliminate an owner’s responsibility to pay the mortgage, property taxes, insurance, maintenance and other operating expenses. When the ability to enforce payment obligations is delayed, someone must carry that burden.

Protecting tenants from displacement over insignificant rent balances is a legitimate policy objective. But so is preserving the financial viability of rental housing. As these policies spread and their legal boundaries are tested, California housing providers have every reason to pay attention.

The rules may be local, but the precedent—and the consequences—could be statewide.

Practicing law for the better part of three decades, Daniel Bornstein is one of the foremost authorities in managing rental relationships, handling landlord-tenant disputes, and representing clients in complex real estate litigation throughout the San Francisco Bay Area. Having successfully resolved thousands of conflicts, Daniel is also the broker of record for Bay Property Group, an expert witness, and a real estate investor himself. Renowned for his informative events, he has made it a lifelong mission to educate rental property owners on a maddening regulatory regime, how to mitigate risk, and how to avoid common pitfalls in landlordording and property management. Contact his office today. Call 415-409-7611 or email daniel@bornstein.law.