Housing stability for all

Think of the TIC owners, says Supervisor Wiener


OPINION San Francisco is in the midst of a housing affordability crisis. It's way too expensive to live here, and for those fortunate enough to have housing they can afford, we need to provide stability. This need for housing stability applies to renters as well as homeowners. If we've learned anything from the foreclosure crisis, homeowners are not all rich, and they are not all stable in their housing.

Last week's Guardian argued against legislation I'm co-sponsoring, which provides one-time relief to owners of tenancies-in-common (TICs) — mostly middle- and working-class first-time homeowners who reside in their units — while providing strong protection to renters. While the editorial correctly stressed the need to support rent control, it failed to acknowledge the need to support housing stability for homeowners as well.

Rent control is one of the pillars of our city. It stabilizes housing prices, recognizes that housing isn't just another commodity, keeps communities intact, and helps maintain San Francisco's diverse fabric. I've long supported rent control, as reflected by my voting record. I supported a series of rent control measures designed to reduce evictions, including requiring sales disclosure of a unit's eviction history, requiring increased relocation benefits to evicted tenants, outlawing harassment of tenants, and restricting use of the Ellis Act by real-estate speculators. As a member of the Board of Supervisors, I authored successful legislation to ban conversion of rent-controlled units to student dorms and to provide temporary affordable units to renters displaced by disasters.

The current legislation I'm co-sponsoring will provide needed relief to struggling TIC owners, many of whom are experiencing serious financial distress, while protecting the small number of tenants who live in these units. TIC owners have group mortgages, meaning that if one owner defaults, all owners default. They pay double the interest rate other homeowners pay and usually cannot refinance. The legislation will allow them to convert their units to condos and obtain their own mortgages, at lower rates and less foreclosure risk.

While some caricature TIC owners as speculators and wealthy people, that's untrue. Many TIC owners are quite middle class, former renters who scraped together a down payment to purchase a home. Many are teachers, social workers, public employees, and other workers who are anything but speculators. These are people who, if they didn't own TICs, would be renting. They aren't Martians who dropped out of the sky. They're our neighbors, co-workers, and fellow San Franciscans. They are part of the city's fabric.

Under the legislation, owner-occupied TICs that are in the condo lottery will be able to convert to condos by paying a fee of $20,000 per unit, with the proceeds dedicated to affordable housing. Buildings with Ellis Act and other problem evictions are typically prohibited from condo converting in San Francisco, under a 2006 law, and that restriction applies to this legislation. In other words, this legislation won't encourage Ellis Act evictions. Moreover, buildings that aren't owner-occupied can't condo convert. Nor can buildings with more than six units. The legislation is one-time in nature and not an ongoing invitation to condo convert.

The legislation covers very few units with tenants — 85% are owner-occupied — and protects this small number of tenants by mandating they receive lifetime leases, with full rent and eviction controls identical to our rent control laws. This protection is stronger than what most tenants receive in buildings that win the condo lottery currently.

Renters and homeowners both deserve housing stability. This legislation moves us in that direction.

Supervisor Scott Wiener represents District 8.



As you note, Ellis'ed building will continue to be ineligible for condo conversion, and so your proposed legislation will not encourage evictions nor affect existing tenants. It simply helps those on the bottom rung of the home ownership ladder to have a little more security, and reasonable people should support that.

It's also good to hear that the funds from the bypass fee are plegded to create affordable housing. It is good to see real money being used to furnish housing rather than the war of words proferred by so many other.

Keep up the good work. I live in the Castro and am proud to have such a hard-working and independent-minded supervisor working for the district.

Posted by Guest on Jan. 30, 2013 @ 10:17 am

The problem supervisor wiener is that there has been a solid LACK of essential workforce housing built since Parkmerced in the 1950's.

The GOVERNMENT needs to step up to the plate with a philanthropic mindset, and develop essential rental housing to an equitable level of the last decades of market rate housing.

Met-Life built Parkmerced with a 3% profit margin. Now Fortress Investments wants 20%+

The reality is that housing is an essential need, and we have many citizens, community members of all walks of life needing housing and not having means to pay for it due to the current job market and lack of security.

The solution is not just building out of the hole, but building equitably.

When the Housing Element was revised by the SF Planning Department they excluded one simple section under 8.1 that stated very clearly that people need to have the OPTION TO RENT OR TO BUY in the housing created.

Than means we need to be balanced in what Is built and created and whom it is for.

Not just the wealthy, the 1%, the TIC owners, the condo-wish-we-can-convert-our-tic, or any other level of housing.

We need to ensure that when someone needs to rent in SF we have a generous supply of housing that does not eat up more than 30% of ones income.

Mini-micro units may be a good initial thought but without adequate open space and infrastructural solutions you just building slums.

What we need are people in planning with better solutions on how to densify and garner more housing development while protecting and preserving our existing stock.

Your legislation does not do this and therefore as prior should be rejected soundly.

Aaron Goodman

Posted by Guest on Jan. 30, 2013 @ 7:46 pm

If you are going to make a loss on every unit, then someone has to pay for that. If you think the voters will pay more tax so that they will be built, then go to the polls with your idea. But the last initiative to do that lost, as I recall.

Posted by Guest on Jan. 31, 2013 @ 9:49 am

TIC Conspiracy Theory: The banks are being inflexible because they can profit handsomely if they foreclose on the current, lower economic tier TIC owners. They can then sell an updated brand of TIC financing to the higher income buyers who will scoop up these properties.

Posted by Guest on Jan. 31, 2013 @ 9:40 am

while they rather obviously have to have a price margin over more conventional loans, they have been increasing market share. Margins should come down more as more banks start doing them - there's only a couple right now.

TIC's really are not much different from co-op buildings in NYC, which have been the standard form of housing there for decades without too many problems.

Posted by Guest on Jan. 31, 2013 @ 9:51 am

Sup. Wiener is ignoring the reality of continuing TIC problems: While buildings with Ellis Act evictions can't participate in the condo conversion under the 2006 ordinance, developers have still found ways to force renters out through intimidation and buyouts (de facto evictions). In fact, they use the Ellis Act as leverage--threatening Ellis evictions if the tenants don't accept buyouts. Wake up, Wiener--TIC-related evictions still continuing because of this practice, and your bill will only make that worse because the precedent for more condo conversions will whet developer appetites to force out more renters for TIC conversion$$$.

Posted by Guest on Jan. 31, 2013 @ 10:41 pm

move out, and any tenant is free to accept that deal if he or she feels that it is favourable. Clearly it is worth something for a LL to be able to get a vacant building without an Ellis restriction and so such cash payouts may in fact be higher and better for the tenant than otherwise.

Also, as a tenant I would actually appreciate advance notice from a LL that my building is likely to be Ellis'ed as it would give me more time to prepare and look for a new home.

Finally, I also have seen cases of a tenant getting a pay out and then the unit being re-rented. In fact, I once paid a tenant 5K to move out and then re-rented the unit. since i got 1K per month more for the unit, I got my money back in six months - everyone won and was happy

Posted by Guest on Feb. 01, 2013 @ 9:49 am

I have trouble listening to Wiener's justification for legislation. Ever since he told me that public nudity spreads disease and is therefore a public health concern (even after the towel law was passed), I can't believe a word he says. Public nudity makes people feel uncomfortable, and some see it as inappropriate, but it absolutely does not spread disease. Scientifically speaking, Wiener lied, and he did so repeatedly. Wiener decides answers first and then fabricates information to fit the answer he wants. I'd rather hear analysis from someone honest.

Posted by Guest on Feb. 05, 2013 @ 4:07 pm

Wiener is trying to help his constituents rather than impose an ideology on them. His constituents told him that they don't want the naked guys and that they want to condo convert their TIC's. So he's doing what he is being asked to do.

Posted by Guest on Feb. 05, 2013 @ 4:38 pm

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