The San Francisco Board of Supervisors unanimously approved an ordinance on December 13, 2016, that could significantly affect an apartment firm’s ability to manage communications services for their communities. Specifically, the ordinance creates a right for residents to request service from any city-authorized internet provider regardless of whether, or how many, providers already serve the property. The ordinance, which covers both apartments and commercial office buildings, is expected to be signed into law by Mayor Ed Lee and take effect in January.
Importantly, apartment firms will be entitled to “just and reasonable compensation” from a provider for using the property to deliver internet service to residents. Owners may challenge the compensation proposed by a provider, but those parameters are unclear. The implications for existing contracts between apartment owners and providers already serving a building are also uncertain since the ordinance does not make an exception for agreements already in place. The ordinance imposes a civil penalty of up to $500 per day against a property owner that does not allow access to the provider without cause.
NMHC member firms from across the country, along with the San Francisco Apartment Association and other interested parties, raised significant concerns with the Board and secured several helpful changes to the original proposal. NMHC/NAA are monitoring the new ordinance as it moves toward implementation, as well as any other legislative or regulatory developments that could impact a multifamily owner’s ability to control access to their properties by communications services providers.
More information on San Francisco’s Mandatory Access Ordinance can be found here.