A win for the tenants

A compromise that actually improves the current situation and could help slow the wave of speculative evictions
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EDITORIAL In a stunning victory, tenant advocates have managed to derail a terrible piece of condo-conversion legislation — and replace it with a compromise that actually improves the current situation and could help slow the wave of speculative evictions.

The supervisors need to support the revised version of the bill — and if Mayor Lee wants to have any credibility at all with tenants, he needs to sign it.

For some 30 years, San Francisco has had a strict policy limiting the conversion of rental apartments to condominiums. Only 200 units a year get permission, through a lottery.

But thanks to the popularity of tenancies in common (a backdoor way around the limit) and the state's Ellis Act, which allows landlords to evict all their tenants and sell the units as TICs, there's now a long waiting list.

TIC owners say it's unfair that they have to accept (somewhat) higher mortgage payments and reduced value on their homes because the wait for a conversion permit has grown to ten years or more. Real-estate speculators see huge profits in clearing buildings of long-term tenants with rent-controlled apartments and selling the places as TICs.

When Supervisors Scott Wiener and Mark Farrell first proposed allowing more than 2,000 tenancy-in-common units to bypass the lottery, tenant advocates began organizing to defeat the bill. Nobody thought a compromise was possible — particularly when the landlord-backed Plan C refused to negotiate in good faith and look for a solution everyone could accept.

But with the help of Supervisors Norman Yee, Jane Kim, and David Chiu, the tenants were able to craft a deal that clears up the backlog — and then prevents any further conversions for at least a decade. That's fair: If the limit is 200 a year, and TIC owners want to clear up a backlog of 2,000 all at once, a ten-year moratorium makes sense. The tenant package also bars conversion of any buildings with more the five units and includes more protections for existing tenants.

If this proposal is really about helping TIC owners who face a long and uncertain time on the conversion list, then the compromise ought to be fine — and indeed, many TIC owners support it. The real-estate speculators who want to see evictions continue at a rapid pace hate it — this would make TICs less appealing and less valuable. But that's fine: Buying a TIC has never been, and should never be, based on a future promise of condo conversion. And if this slows down the horrifying epidemic of evictions and displacement, it will be a very positive change.

Wiener and Farrell didn't accept the compromise, but it was amended into their legislation anyway. The new version will come before the supervisors May 7. The supervisors should see this for what it is — greedy speculators against everyone else — and vote yes.

Comments

"with more the five units" ?

Posted by Guest on Apr. 30, 2013 @ 9:33 pm

the practical upshot of this isn't so onerous.

It's poor law but, as usual, property owners will find ways around it.

Posted by Anon on Apr. 30, 2013 @ 10:14 pm

Rich people yay!!

http://www.counterpunch.org/2012/10/31/the-san-francisco-giants-of-real-...

"Scott Seligman’s company owns the Sterling Bank & Trust, and numerous office properties in California, Nevada, and Michigan. Seligman has been singled out as the ugly face of gentrification in San Francisco by non other than Lawrence Ferlinghetti"

Posted by Guest on May. 04, 2013 @ 11:39 am

2000+ more condos is a very good start. Also TICs will become more affordable during the 10 year moratorium.

Posted by Guest on Apr. 30, 2013 @ 10:24 pm

any evidence for the proposition that TIC's will become cheaper. The opposite is more likely, especially over a ten-year view.

Posted by Guest on May. 01, 2013 @ 2:10 am

This could represent a fantastic opportunity. TICs could become cheaper in the confusing early years of the government imposed conversion moratorium. The strict moratorium will eventually be weakened or defeated in court.

Posted by Guest on May. 01, 2013 @ 9:10 am

what a silly statement...the basic act of condo conversion is a government granted benefit and the statement implies that someone has a fundamental right to turn their property into a condominium. talk about entitled...

Posted by MossyBuddha on May. 01, 2013 @ 1:06 pm

Grossly entitled. They must think they actually own the place.

Posted by Guest on May. 01, 2013 @ 1:37 pm

First the government tells you have to have to go thru a process to get title to your unit, and then they tell you that you can join a lottery to get what you should have anyway.

With new build, every unit is a condo because nobody wants to build anything else. Should be the same for existing stock too.

Posted by Guest on May. 03, 2013 @ 9:43 am

developments being built right now in San Francisco. Facts. A funny thing.

Posted by Guest on May. 03, 2013 @ 10:02 am

small new rental buildings being built - the 2-4 unit mom'n'pop buildings that make up much of SF's rental housing stock are not being built because there is no demand. Even tho new build is exempt from rent control, developers and landlords cannot risk that that might change, as many of the earlier exclusions from rent control were reversed after the fact.

There are larger buildings going up but they are easier for property companies to manage because you always get turnover in larger buildings, and they can probably be in profit within 10-12 years, after which it doesn't matter so much any more.

The rest - all condo's as far as I see.

Posted by Guest on May. 03, 2013 @ 10:16 am

Your interpretation is inaccurate and dishonest.

Rent control cannot be extended to buildings constructed after 1980. This is part of the state constitution. It cannot be overturned. So rent control has nothing to do with restricting new construction.

Older buildings have been brought under rent control but no new ones. But they were not covered by Costas-Hawkins, the state law, because they were older buildings constructed as rentals.

Posted by Guest on May. 06, 2013 @ 6:08 pm

Owned by mega-corporate landlords. Nice job.

Posted by Guest on May. 03, 2013 @ 10:41 am

Which leaves a vacuum for corporate property managers, REIT's and hedge funds. And they won't tolerate shitty little tenants - look how they did a once over on Park Merced.

Posted by Guest on May. 03, 2013 @ 10:54 am

If you think you should have had a condo anyway, why didn't you buy a condo? Did you offer the previous owner the chance to treat the property as a condo in the sale, and did you pay a condo price out of disrespect for the terrible government restrictions attached to the unit? No, you loved the fact that it was a TIC going in, because you paid a lower price as a result.

You want government to rewrite the deed to your advantage. That is government interference. You have a TIC contract that defines the property lines. If that's insufficient, you should not have bought a TIC. Your sense of entitlement has debased homeownership. It is filled with people who always want more than they paid for. Loan mods and principal writedowns and condo conversions. Aren't Prop 13 and mortgage breaks and capital-gains exemptions enough for you people?

Posted by Guest on May. 06, 2013 @ 5:57 pm

This proposal may accelerate that process for a few people, but every one of those TIC's would have gone condo anyway. The deal was understood from the start.

And nobody loses if a TIC goes condo.

Posted by Guest on May. 08, 2013 @ 4:12 pm

Real TIC owners support this legislation as a fair and reasonable compromise. I have no idea why Plan C is pulling their support for the legislation.

If this isn't a fair compromise, then what is?

Tenants and home owners do not have to be enemies. We are not fighting some battle against each other. Most of my friends and co-workers are renters. But we can all agree that this legislation makes sense. So we are all winning now.

Posted by TIC Owner on May. 01, 2013 @ 1:12 am

you get to condo and that is your dominant concern.

I don't speak for Plan C but suspect the basis of their objection is how this deal shuts the door on anyone wanting to do what you have done, and who now face a wait of at least ten years.

There again, I do not understand why tenants oppose this either, because these 2,000 or so units are all owner-occupied anyway, and are already lost to renters forever.

In short, this bill favors a few and has little effect on the rest. Only in SF would so many get so worked up and so little.

Posted by Guest on May. 01, 2013 @ 2:13 am

This has always about real estate investment and outrageous windfall returns on condo conversions, not about obtaining real housing.

TICs are absurdly bad form of ownership, and no one in their right mind would by a TIC to obtain a real home.

Posted by Guest on May. 01, 2013 @ 12:35 pm

From Plan C's Website: http://www.plancsf.org/2013/04/condo-bypass-update-422/

"We believe taken in combination, the amended legislation penalizes both current and future TIC owners and creates a number of unintended consequences, especially for those TIC owners that purchased their TICs within the last year (after 4/12/12). We believe no Supervisor should support legislation that penalizes TIC owners retroactively."

Seems like they are suggesting the legislation has a number of technical issues in addition to leaving some folks out in the cold. A fair compromise wouldn't fuck over any existing TIC owners, and would make prospective changes that new TIC owners would be fully informed of. It's not the TICs that have been eligible for the lottery that the tenants advocates should be focused on. It's the ones that use the Ellis Act to clear large buildings that can never convert to condos that they should look to address.

And it also appears the whole piece of legislation as ammended can be taken down by a single lawsuit. All this grandstanding and it's going to be moot.

Posted by Guest on May. 01, 2013 @ 3:28 pm

There is no "horrifying epidemic of evictions and displacement", the number of Ellis evictions each year is less than 200. I can thinking of alot of things much more horrifying, and as far as epidemics go eviction rates don't really compare to a mild cold.

It is good to see that this is a victory (I am sure the Supervisors will pass it), but I the Victory is premature.

But continue with the hyperbole as it makes transparent where your prejudice lies

Posted by Chris Pratt on May. 01, 2013 @ 10:09 am

"makes transparent where your prejudice lies "

No shit, Sherlock, really, you've just figured that out?

Posted by marcos on May. 01, 2013 @ 10:19 am

No I didn't but I am not a cunt

Posted by Chris Pratt on May. 01, 2013 @ 12:36 pm

no horrifying epidemic of evictions and displacement? have you tried to find a place to rent lately? Its horrible right now. Ellis and OMIs are only the tip of the iceberg.

Posted by Guest on May. 06, 2013 @ 3:52 pm

Yes, the rental market has been completely destroyed in SF. Luckily we're building many new luxury rentals owned by mega-corporate landlords. (sarcasm)

Posted by Guest on May. 06, 2013 @ 4:19 pm

clearly there was demand for them. If not, the developers lose money - why would you care about that?

Posted by Guest on May. 08, 2013 @ 4:10 pm

"Buying a TIC has never been, and should never be, based on a future promise of condo conversion."

Actually buying a TIC has ALWAYS been about converting to condo.

If it were not then why so may TIC investors demanding to be able to convert?

Posted by Guest on May. 01, 2013 @ 12:27 pm

The attack on rent control has always been orchestrated by big real estate and the real genius of this compromise is that it acknowledges and exposes this.

Posted by Guest on May. 01, 2013 @ 12:29 pm

Regardless how bad it could have been, this legislation is still profoundly unfair.

You buy a TIC that costs less than a condo, but you pay a higher rate. Over time the condo and the TIC cost about the same.

By converting, you allow investors to purchase a cheaper home, and then avoid paying a higher rate, turning a TIC meant to allow first time home owners a chance to afford San Francisco into an investment vehicle that can return hundreds of percent on a down payment for a lucky few, unscrupulous real estate a$$holes....

Posted by Guest on May. 01, 2013 @ 12:32 pm

Why do we have to keep offering government support and bailouts for immoral, unscrupulous real estate cons that victimize and prey upon normal people?

No evidence has been offered that a Plan C ballot measure has the slightest chance.

Posted by Guest on May. 01, 2013 @ 12:53 pm

For the same reasons that no elected officials have come out against Pride's blacklisting Bradley Manning. This town is on political lockdown.

Posted by marcos on May. 01, 2013 @ 12:59 pm

For realz.

Posted by Guest on May. 01, 2013 @ 7:28 pm

Where exactly is this bailout coming from? Oh, you probably don't know that because you base your opinion on baloney the Tenants Union has fed you. Actually, if you READ the legislation it says that TIC owners will be PAYING their own way with this measure- up to $20,000 per unit to transfer. There's no government money going into this (other than the time Norman Yee and Jane Kim wasted sucking up to tenants rights activist deadbeats).

Posted by Guest on May. 01, 2013 @ 9:12 pm

"Up to" $20,000. Scam. As usual.

First, lots of conversions will be "as low as" $4000.

Second, this money would have been raised anyway from the coming real estate conversion tax, now diluted.

Third, the bail out is for the banks who financed thousands and thousands of these trashy five and seven year balloon mortgages, not the TIC owners.

Seriously. NO ONE believes home owners get bailed out. BANKS get bailed out.

Posted by Guest on May. 03, 2013 @ 8:58 pm

have been foreclosed upon. We saved the banking system because we had to. And the vast majority of mortgagees are current with their loans. It's all good.

This conversion opportunity is good for the city and good for it's residents. And SF gets a lot of other fees in a conversion as well as this one-time fee of up to 20K. Given that no tenants will by evicted, it's a win-win, as the article notes.

Posted by Guest on May. 03, 2013 @ 9:15 pm

Just another financial abomination from our friends the Republicans.

Posted by Guest on May. 03, 2013 @ 11:46 pm

"If the banks had not been bailed out then more homes would have been foreclosed upon."

Because giving money to victims instead of criminals is communist...

"Oh, are we getting ripped off. And now we've got the data to prove it. From 2009 to 2011, the richest 8 million families (the top 7%) on average saw their wealth rise from $1.7 million to $2.5 million each. Meanwhile the rest of us -- the bottom 93% (that's 111 million families) -- suffered on average a decline of $6,000 each."

http://www.alternet.org/economy/rich-have-gained-56-trillion-recovery-wh...

-- The Rich Have Gained $5.6 Trillion in the 'Recovery,' While the Rest of Us Have Lost $669 Billion

Posted by Guest on May. 04, 2013 @ 4:10 pm

And wealth inequality in itself isn't necessarily a bad thing. If the 100 wealthiest Americans all moved to Switzerland tomorrow, the rest of us would be worse off, not better off, even though technically we'd be a more equal society, for what that is worth.

Posted by Guest on May. 08, 2013 @ 4:09 pm

Fact check:

1.3MM underwater homeowners were bailed-out in 2012 alone.

Although I don't believe in bank bail-outs, banks were actually bailed out in 2008, and have since all repaid that money.
Banks are not being bailed-out of your bad mortgage now. The are taking the losses with set-aside loss reserves.

Please apply for your underwater mortgage loan to be restructured and forgiven so that hard-working savers/financial responsible citizens/taxpayers can bail you out too. Thanks.

Posted by Guest on May. 17, 2013 @ 8:24 am

the plan now is to let current TIC owners convert, but then shut the door behind them so future TIC owners won't have that chance for 10 years. If you ask me, that just hurts middle class people in SF who want to own rather than rent.

why not just change the lottery to 400 units per year? or get rid of the lottery and let an owner convert a TIC one time, thus getting rid of speculators who, allegedly, are habitually doing this?

Frankly, I don't see how the current legislation is the "win" for tenants that Tim is masturbating all over himself about.

Posted by GuestD on May. 01, 2013 @ 1:03 pm

TICS that EVICT MULTIPLE TENANTS OR ELLIS are NOT eligible to CONDO CONVERT. They are NOT on the list TIM! This has been the case since 2005. So the list of 2000+ TIC owners in the backlog were not caused by ELLIS. There are 1000's of other TIC units that have ELLISED, are not part of the lottery, won't ever convert, and this "compromise" doesn't change that one bit. TICs aren't going away, conversions or not.

The last part of this statement is false: "For some 30 years, San Francisco has had a strict policy limiting the conversion of rental apartments to condominiums. Only 200 units a year get permission, through a lottery. But thanks to the popularity of tenancies in common (a backdoor way around the limit) and the state's Ellis Act, which allows landlords to evict all their tenants and sell the units as TICs, there's now a long waiting list."

Posted by Guest on May. 01, 2013 @ 3:18 pm

line from the condo lottery when you admit that Ellis'ed buildings cannot be condo'ed anyway?

That makes no sense at all.

Posted by Guest on May. 03, 2013 @ 9:40 am

The SF TIC market is based on potential for condo conversion, and the market prices reflect that. TICs may be cheaper than condos, but not THAT MUCH cheaper. If condo conversion stops altogether, some people may be interested in forming a group to buy buildings as a "co-op" like in NYC, but then the price won't be inflated based on the mere possibility of condo conversion.

The Supes should not change the rules retroactively. It's unfair. All existing TIC owners should eventually be able to pay the bypass fee and condo convert. No TIC orphans!

Posted by TIC owner too on May. 06, 2013 @ 7:47 pm

and yet they do sell, albeit for less than a TIC with that potential.

What we will see here is that the existing bifurbication between condo's and TIC's will become now a three-way split: condo's, TIC's that can condo, and TIC's that cannot condo.

That latter group are mostly the result of an Ellis eviction and those will continue because the demand is there to biuy them AND because landlords eventually lose patience with tenants who never move.

The rental market will become more and more based on new high-rise developments that you can see going up all over SF. Smaller 2-4 unit buildings will gradually be Ellis'ed out of existence, because rent control hurts small landlords much more than big landlords - the exact opposite of the original intent.

Posted by Guest on May. 07, 2013 @ 7:20 am

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