If you live in San Francisco and have a rental unit on your property that was built without proper permits, the City has an amnesty program which will allow you to legalize the unit. If you are legalizing voluntarily, the program allows you to legalize your illegal rental unit without having to pay any penalties or fines. You have to be able to prove that the unit was both built and rented out prior to January 1st, 2013, and you have to be willing to make the changes to the property to bring the unit into compliance with the current building codes.
Some of the biggest issues that have to be addressed include meeting the ceiling height requirements, meeting the fire separation requirements, and meeting the natural light and ventilation requirements. Having adequate and safe exiting is also important. The process will include having to meet the planning regulations requiring a street tree, adequate front yard landscaping, and adequate permeable paving/landscaping. Depending upon when and how the illegal unit was built, the cost of legalization can vary wildly.
The process is anonymous until you decide if you want to move forward with the project and apply for the permit. At the moment, the City is waiving the initial Planning and Building Department plan review fees. I just submitted a legalization project, and we only had to pay $2 for the application fee, saving over $2500. I do not know how long this new fee waiver will remain in effect. I should point out that the Building Permit fees still have to be paid. This fee waiver only applies to improvements directly related to meeting the building codes. No additional work can be included in the permit application.
Legalizing an unpermitted rental unit puts you as the property owner and landlord in a more secure position when renting your unit and provides some protection from difficult tenants. It will increase the value of your home and increase your property taxes. But the higher property value and ease of selling a property with a legal rental unit may outweigh the construction cost and added property tax.
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