Need advice on Rent Raise

[Matthew E.]

Need some advice on how to handle a tricky situation. 

This year I took over managing a few rental properties for my elderly aunt. She has a 4plex (all 2 bed, 1 bath) in the SF bay area that she's owned since the 70's. One tenant has been there for 20 yrs, and my aunt has barely raised rents in all that time....last time she did it was $10!   Market rate is $2700 in current condition. 

This tenant is paying $1300. Currently there is no rent control in this county. All that's required is 30 day notice for anything under 10% increase, and 60 day for over 10%.  They're nice people, but I can't justify giving them a 50% discount on their rent any longer. I sent them a rent increase notice bringing it to $1950 in 60 days....still a $700+ discount because we like them. They are arguing it's unfair and want a justification for the large increase etc... And saying that they can't afford it. I don't think they're all that aware of the current rental market.

How do I respond to this? I don't want to cruel, but it is a business for our family. And there is a chance rent control could pass this year, so I can't risk keeping it that low.