Although offering cash is not illegal if done through an attorney (usually just over $5100 per tenant), the process for protected tenants is different (case by case).
Unfortunately there is no easy answer for this. Get a good real estate attorney to investigate your particular situation, but because of the protected tenants, this is really up to a the San Francisco rent court.
I hope this helps!
To answer your second question, yes the value would be affected significantly in most cases. I'd be happy to provide you a complimentary market analysis taking each scenario into account for your property specifically. Thanks and hope to hear from you-