City officials estimate there are more than 40,000 illegal in-law units in San Francisco. (Wikimedia Commons)
City officials estimate there are more than 40,000 illegal in-law units in San Francisco. (Wikimedia Commons)

Tens of thousands of San Franciscans are living in illegal apartments known as in-law units. Tenants in this shadow housing market are often low-income and vulnerable to eviction.

While many in-law apartments are not up to code, city officials say they’re an important source of affordable housing. That’s one reason why a San Francisco supervisor wants to legalize them.

For the past year, 65-year-old Kai Man Lee, a recent immigrant from Hong Kong, has been living with his wife and son in an illegal unit in the Outer Sunset.

At the Asian Law Caucus, Lee spoke through a translator to explain he’s now being evicted:

“When I started renting the place my landlord told me the unit is a legal unit. That I don’t have to worry about anything. A year later the landlord asked me to move out. The landlord said the unit is actually illegal.”

Lee’s family can’t afford most legal units because they struggle to get by on $20,000 a year, just above the federal poverty level.

Illegal in-laws are often small apartments hidden from street view, and tucked in the garages and basements of single-family homes. Some lack basics like heating and kitchens.

City officials estimate there are more than 40,000 of these in-law units in the city. Many were built after World War II.

Supervisor David Chiu is sponsoring the ordinance to legalize them, as one fix to the city’s affordable housing crisis.

“For decades, we have had a shadow economy in San Francisco involving these technically illegal in-law units that were housing thousands of immigrants, seniors, families — many of our lowest-income and longest-term residents,” Chiu said.

City building inspectors don’t go after illegal units unless there are complaints. Every year the department takes about 100 units off the market for code violations.

Some landlords report their own illegal unit so the city will remove it from the market. Then they can evict the tenants, sell the house as a single-family home or raise the rent for new tenants.

Omar Calimbas with the Asian Law Caucus says this is one reason why landlords evict families like the Lees without consequences.

“The landlord can do that because there is no regulatory mechanism for tracking what a landlord does to that property, to that unit, once it’s removed from housing permanently,” Calimbas said.

Chiu and others say they don’t want to lose these affordable rentals.

In the past, Chiu says neighborhood groups opposed to density have blocked efforts to legalize, but, he says, things are different now.

“We’re in the midst of an affordability crisis,” Chiu said. “We’ve had skyrocketing eviction rates. We’ve had way too many families who are being pushed out of the city, and I think this is the right time for us to change our city’s policy toward in-laws.”

Chiu’s ordinance would simplify the process for landlords, but the details are still being worked out. The apartments would have to meet state health and safety codes, including having a working kitchen and bathroom.

Groups that represent landlords haven’t taken a formal position on the ordinance.

Henry Karnilowicz with the San Francisco Small Property Owners Association doesn’t think many landlords would take advantage of it.

“To legalize these units, it’s going to cost some money, and it might not be cheap,” Karnilowicz said. “It could be 50, 60, a hundred thousand, who knows how much that’ll be even.”

While the cost of bringing a unit up to state code might be prohibitively expensive for some landlords, building inspectors would have discretion to waive city requirements.

Ted Gullickson with the San Francisco Tenants Union is helping to write the measure.

He says two big things in the measure would help landlords legalize their units. One, it would change current zoning rules that don’t allow density. And two, it would not require street parking for a legal unit.

“Those requirements have always been fatal to any illegal units where the landlords actually wanted to legalize after being cited, because you just can’t get past those,” Gullickson said.

If this attempt to legalize in-law units passes, Kai Man Lee says it will take a lot of stress off tenants, and landlords.

But this debate isn’t helping the Lees right now. They’re going to have to move into another in-law that costs twice as much and is worse than their current apartment.

“The new place doesn’t have a sink, doesn’t even have a kitchen area, not even a refrigerator for him to wash any of his produce, or wash anything to prepare for dinner,” said Lee through a translator. “Most of the time he will have to prepare in the bathroom because that’s the only place that he can do it.”

Chiu’s ordinance is currently in a public review period and must be considered by the Planning Commission before it goes to the Board of Supervisors.

  • LC

    Aside from the benefits to the City and the problems of waiving or removing the normal planning department requirements for them, a major problem with legalizing in-law units and then requiring landlords to bring them up to code AND adding the basic features to make them more habitable is that the City will still limit the landlord’s ability to recover all the costs of remodeling by limiting how much the rent can be raised. This is and has been the main reason that most landlords do not bring their units up to current “standards.” Indeed, it’s also one of the reasons there are so many illegal units out there!

    • Geotron VonDoja

      That’s exactly right. If the landlord can’t recover their $50-100k investment meaningfully by charging fair market rate (which is insanely high, I know), then they are in essence being required to subsidize below market rent for tenants at their own expense. Which isn’t fair to them. It’s a “damned if you do, damned if you don’t” scenario really, because it will take MUCH more than 40,000 in-law units to ease the market tensions that keep rents stubbornly high. And, the market for those units is typically two demographics: poor, struggling immigrant families; and middle class or working class college students.

  • ngehani

    What about creating *new* inlaw units in existing SFR with kitchen and bathroom? Will this make that process easier?

  • abocha

    I’ve read the proposed ordinance. Here are the issues I see…
    1. Most of these units are probably already rented. So allowing owners to apply to make them legal is a bookkeeping win for the City without increasing actual rental stock for residents.
    2. The ordinance requires that the units comply with current building codes. This is good from a safety perspective, but I’m guessing a large number of the units do no meet code. I’ve seen hundreds of in-laws while house hunting and most of them aren’t to code. Thus, owners will have sizable construction bills to bring their units to code. In most cases, I’m guessing this cost isn’t outweighed by a legal status change.
    3. The premise of this ordinance is that there are numerous empty in-law units in single family homes that aren’t being rented because they are illegal. However, the rent board has ruled in several cases this year, including my current rental, that if you rent a SFH with an unoccupied, illegal in-law unit, you are a single tenancy and the property is not subject to the Rent Control Ordinance under the Costa-Hawkins ruling. In this currently inflated rental market, owners would not be acting in their own self interest to legalize their in-law unit. Doing so would change the status of their property and bring it under the jurisdiction of the Rent Ordinance.


Bryan Goebel

Bryan Goebel is a reporter focused on transportation and housing issues. He was previously the editor of Streetsblog San Francisco, and an anchor/editor at KCBS Radio. He's a lifelong Californian and has also worked at radio stations in Barstow, Redding and Sacramento.

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