- Studio threshold
- $2,485
- One-bedroom threshold
- $2,977
- Two-bedroom threshold
- $3,604
FY 2026 HUD fair market rent
FY 2026 HUD fair market rent
FY 2026 HUD fair market rent
Data: Ordinance enacted October 29, 2026; HUD FY 2026 fair market rents; DataSF eviction notices through August 12, 2026 for the nonpayment subset.
San Francisco has changed the math on nonpayment cases. Under Ordinance 220-26, a landlord cannot evict a residential tenant for unpaid rent while the balance is below one month of HUD fair market rent for a unit with the same number of bedrooms. The ordinance was enacted October 29 and says it takes effect on the 31st day after enactment, November 29, 2026.
The threshold depends on bedroom count
The law points to HUD’s local fair market rent, not the tenant’s contract rent and not the Housing Authority’s higher payment standard. For FY 2026, the San Francisco HMFA covers San Francisco, Marin, and San Mateo counties. The same dollar schedule applies across that geography.
| Unit size | Monthly threshold |
|---|---|
| Studio | $2,485 |
| 1 bedroom | $2,977 |
| 2 bedrooms | $3,604 |
| 3 bedrooms | $4,604 |
| 4 bedrooms | $4,772 |
HUD FY 2026 fair market rents for the San Francisco, CA HMFA. Check the current HUD schedule before using these numbers after FY 2026.
That distinction matters. The San Francisco Housing Authority’s 2026 payment standards are set at 110% of HUD fair market rent. They are useful for voucher administration, but they are not the figures named in this ordinance. A two-bedroom FMR is $3,604; the SFHA payment standard is $3,964. Using the wrong column would overstate the threshold by $360.
What changes, and what does not
| What changes | What stays the same |
|---|---|
| A nonpayment balance below the applicable FMR cannot support an eviction for nonpayment. | The unpaid rent is still owed. |
| The notice must identify the unit’s bedroom count. | Owners still need an accurate rent ledger and a valid notice. |
| Partial payments can keep a balance below the threshold longer. | Reaching the threshold does not skip other notice, just-cause, court, or procedural requirements. |
| The relevant FMR can change when HUD publishes a new schedule. | Contract rent, lawful rent increases, and collection rights remain separate questions. |
For a small owner, the biggest operational change is the partial-payment pattern. A tenant who is short $400 or $600 each month may create a meaningful unpaid balance without crossing the threshold right away. The owner needs to decide early whether the issue is temporary, whether a written payment plan is realistic, and how much liquidity the building can carry.
How quickly can a recurring shortfall reach the threshold?
The table below is simple division, but it is the part I would put into an operating model. It shows the number of monthly shortfalls needed for the cumulative balance to reach or exceed FY 2026 FMR. It is not a forecast of an eviction timeline.
| Unit size | $500 short each month | $1,000 short each month |
|---|---|---|
| Studio | 5 months | 3 months |
| 1 bedroom | 6 months | 3 months |
| 2 bedrooms | 8 months | 4 months |
| 3 bedrooms | 10 months | 5 months |
| 4 bedrooms | 10 months | 5 months |
Calculation: round up HUD FMR divided by the assumed monthly shortfall. It assumes no additional payments, credits, fees, rent changes, or prior balance.
A two-bedroom tenant who pays $500 less than the amount due each month would take eight months to accumulate at least $3,604 in this clean example. At $1,000 short per month, it would take four. That is the reserve problem in plain English: the rule can turn a modest monthly miss into a longer working-capital obligation for the owner.
Recent notice data gives context, not a forecast
San Francisco’s Eviction Notices dataset recorded 278 notices marked for nonpayment from January 1 through August 12, 2026, compared with 374 over the same dates in 2025. That is a 25.7% decline. The filing count is useful context, but each row is a notice, not a completed eviction, and the 2026 nonpayment subset stops in August even though the broader dataset contains later records.
DataSF records with non-payment=true and file_date between January 1 and August 12 in each year. Notices are not completed evictions.
I would not underwrite a building on the assumption that the citywide decline will continue. A buyer cares about the actual leases, payment history, current balances, and management practices in the property being acquired. Citywide notice counts cannot answer those questions.
What I would review before buying a rental building
- A tenant-by-tenant ledger that separates rent due, payments, credits, deposits, fees, and any disputed amounts.
- The legal bedroom count for each unit. Do not let a marketing label or an informal sleeping room determine the threshold.
- Any current payment plan, notice, pending case, settlement, or collection arrangement, reviewed by the buyer’s attorney.
- The owner’s bad-debt history and collection policy, including how partial payments are posted.
- A liquidity reserve that can carry debt service and operating expenses through a longer shortfall.
- The management workload. A clean monthly close and prompt follow-up are now part of protecting the asset, not just bookkeeping hygiene.
This belongs beside the rest of the acquisition work. Start with the investment-property diligence framework, confirm the building’s financing route, and keep any projected vacant-unit premium separate from the occupied-unit receivables you may inherit.
How I would change the operating plan
| Timing | Owner or manager action |
|---|---|
| Before the month starts | Confirm lawful rent, bedroom count, recurring credits, and the opening balance for every unit. |
| When a payment is short | Post it consistently, calculate the remaining balance, and contact the tenant promptly. |
| When a plan is discussed | Put the dates and amounts in writing and make sure the accounting system follows the agreement. |
| Before serving a notice | Have the ledger, bedroom count, applicable FMR, notice language, and current law reviewed for the specific tenancy. |
| At acquisition or refinance | Stress-test reserves for several months of partial payment rather than modeling only full rent or zero rent. |
The right reserve will vary by debt load, unit count, tenant history, and the owner’s other liquidity. I would rather see a buyer model a few explicit shortfall cases than bury one generic vacancy percentage in the pro forma. A $500 monthly miss, a $1,000 monthly miss, and a full nonpayment case tell you much more about how the building behaves under pressure.
The investment takeaway
Ordinance 220-26 does not make a good rental building bad. It does make sloppy receivables management more expensive. The owners best positioned for the change will know the lawful balance in every unit, respond early, keep enough cash to avoid a forced decision, and price inherited arrears into the purchase rather than treating the rent roll as cash.
Common questions
Does the new threshold forgive unpaid rent?
No. The ordinance says the landlord may not evict for nonpayment while the unpaid balance is below the applicable HUD fair market rent. The balance remains owed.
Is the threshold based on the tenant’s monthly rent?
No. It uses HUD fair market rent for an equivalent-size unit, based on bedroom count.
Does reaching the threshold mean an owner can evict immediately?
No. It means the new minimum-balance restriction is no longer the barrier described here. The owner still has to satisfy the other rules and procedures that apply to the tenancy and case.
Which number should an owner use for a two-bedroom in FY 2026?
$3,604, the HUD fair market rent. Do not substitute SFHA’s $3,964 payment standard.
Will the dollar thresholds stay the same?
No. They are tied to HUD fair market rent, so owners should check the current schedule when evaluating a notice or underwriting future years.
Methodology
The threshold table reproduces HUD FY 2026 fair market rents for studios through four-bedroom units in the San Francisco, CA HMFA. The shortfall table divides each FMR by $500 and $1,000, then rounds up to a whole month. DataSF counts use non-payment=true and identical January 1 through August 12 windows for 2025 and 2026: (278 - 374) / 374 = -25.7%. The dataset records notices, not completed evictions, and does not support a property-type split.
Sources
- San Francisco Board of Supervisors, File 260962 and Ordinance 220-26, enacted October 29, 2026 ↗
- HUD, FY 2026 Fair Market Rent Schedule for the San Francisco, CA HMFA ↗
- San Francisco Housing Authority, 2026 Payment Standards effective January 1, 2026 ↗
- DataSF, Eviction Notices dataset, retrieved November 1, 2026 ↗
- San Francisco Rent Board, Administrative Code Section 37.9, checked November 1, 2026 ↗