Condo conversion legislation on hold for now

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Tenants rallied outside City Hall in a show of opposition to proposed condo-conversion legislation
Guardian Photo by Rebecca Bowe

Following a contentious five-hour hearing, a committee of the Board of Supervisors postponed voting on a controversial housing proposal, and agreed to revisit the issue on Feb. 25. Over the next few weeks, opposing sides are expected to negotiate a possible alternative.

Authored by Sups. Scott Wiener and Mark Farrell, the proposed condo conversion impact fee would have allowed as many as 2,000 tenancy-in-common (TIC) units to be immediately converted to condos for a fee, allowing owners to bypass a housing lottery system that places an annual cap on conversions.

While TIC owners voiced frustration about the backlogged lottery system, tenants expressed fears that the legislation could give rise to a wave of Ellis Act evictions if landlords or speculators interpreted it as a signal that lucrative condo conversion would be easier to achieve.

Prior to the hearing, a group of tenants gathered in front of City Hall in a show of opposition to the condo-conversion legislation, waving signs that read, “Stop the Attack on Rent Control.”

“The reality is, if this legislation passes, there will be more evictions in San Francisco,” said Tommi Avicolli Mecca of the Housing Rights Committee, who spoke at the rally.

Tenant advocates worry that the legislation would result in a permanent loss of affordable, rent-controlled units from the city's housing stock, at a time when rents are soaring. When landlords rent out their condos or TICs in San Francisco, there's a key difference: TICs are covered by rent control, but condos are exempt.

"I've been evicted three times," one woman said while addressing members of the Land Use & Economic Development Committee. "I know so many people who have gotten evicted. I don't know anyone who's won their case against eviction."

During the hearing, Farrell adopted a defensive tone against critics who’d described the proposal as an attack on rent control. “The tactics that these opponents have deployed is out of line,” he said. To assuage concerns, he noted that he and Wiener had included a provision guaranteeing lifetime leases for existing tenants in units that qualified for condo conversion under the program.

But Sup. Jane Kim drilled down on this detail, questioning whether such an agreement would be legally enforceable in the long run. In response, a representative from the City Attorney’s office said he thought the provision was on solid legal ground, but noted that the specific matter “has not been litigated before,” meaning there is still a question as to whether it could withstand a court challenge. When Kim asked if any funding was set aside to enforce these lifetime leases, the response was "no."

Board President David Chiu proposed holding off on a vote for several weeks. “I do not support the legislation in its current form,” he said. If the current generation of TIC owners were allowed to convert this time, he explained, the next generation’s frustrations with the housing lottery would only “lead us back to an identical debate in a short period of time.”

Kim echoed this point. “My concern was that … folks were looking at this legislation as an ice-break for more condo conversion,” she said just after a public comment session that lasted several hours. And she acknowledged that there is a larger problem to consider. "It's very tragic that we have set up a situation where [TICs and renters] are pitted against one another," she said.

Comments

More and more families are choosing to stay in SF rather than flee to the suburbs. The demand for more homeownership opportunities is certain to increase. It is only a matter of time before the conversion laws evolve.

Posted by Guest on Jan. 28, 2013 @ 8:42 pm

Are Families Leaving San Francisco?
examiner.com
March 9, 2012
Is San Francisco becoming a child-free zone? According to the Chronicle, that may just be the case. The newspaper reported today that last year, a family with an annual income of $111,000 could afford less than a quarter of the homes for sale in the city.

Families leaving SF: It's housing costs, stupid
Bay Guardian
March 9, 2012
City officials continue to wring their hands over why families are leaving the city, and I'm sure there are a number of factors, but I can tell you that from the people I know -- families who live in the city or want to live in the city -- it's all about the cost of housing.

Posted by Guest on Jan. 28, 2013 @ 9:11 pm

Next you'll be bitching that San Francisco does not have enough heterosexual families because there are too many LGBT here.

Posted by marcos on Jan. 29, 2013 @ 9:13 am

one could in fact construct an argument that it isn't in the long-term interests of SF to become too much of a gay ghetto.

Posted by anon on Jan. 29, 2013 @ 9:32 am

SPUR sees San Francisco as a gene pool in which young affluent professionals swim for about five years, find a mate and then spin off to the suburbs to spawn.

Developers don't make money off of families.

Posted by marcos on Jan. 29, 2013 @ 10:02 am

Draws include UCSF, Hastings, professional services firms, IT and biotech.

SF's population is growing rapidly and that is why RE is back with a bang so soon after the sub-prime blip.

Posted by anon on Jan. 29, 2013 @ 10:21 am

He talks a good game about "our shared progressive values," but in reality he has no values at all. It's up to tenants to make sure he knows there is a very high price to be paid if he goes along with more condo conversions.

Posted by Greg on Jan. 28, 2013 @ 9:18 pm

I agree, it does sound like he's trying to find a way to make it happen.

Please make it happen, Supervisor Chiu!

Posted by Guest on Jan. 28, 2013 @ 9:43 pm

For once Greg may be right.

Posted by Lucretia Snapples on Jan. 28, 2013 @ 10:00 pm

Sounds like what you said to me in the car!

Posted by Granny Gear on Jan. 29, 2013 @ 10:27 am

Lifetime leases would be a good first step, but what about my children? And my children's children? I'm entitled to pass the 3 bedroom flat I rent down to my descendants like a family estate, but these property owners treat us like Serfs (not Smurfs - I know, that's what I thought too but I looked it up and it's definitely Serfs). Here's the way it should be: the landlord retains the privilege of owning the property -- and with this privilege comes the responsibility of paying all property taxes, upkeep, replacement of appliances as current ones become outdated, etc. As the tenant, all other rights and privileges belong to me.

And none of this BS about my descendants technically having to be related to me by blood. My Burning Man Tribe is just as much a family to me as any landlord's biological children are to him.

San Francisco used to take care of it's artists. What happened? When I developed carpal tunnel last Spring and was no longer able to make a living as a DJ every other weekend in Soma, do you think my landlord cared? Hell no! He was nearly able to evict me for non-payment! They're so heartless. I mean, I could barely afford to keep my medical marijuana prescription filled.

We can't let them get away with this! We need to burn some shit! Let's occupy something!

Posted by Guest on Jan. 28, 2013 @ 9:32 pm

You seem dissatisfied in our "second rate" city. Why don't take your comedy act on the road where you might find a more receptive audience wherever that might be?

Posted by Eddie on Jan. 29, 2013 @ 12:28 am

Classic. Anyone who doesn't agree with "Progressive" views, shouldn't live in San Francisco. The arrogance never ceases to amaze.

Sorry, no. I think I'll stay.

Posted by Guest on Jan. 29, 2013 @ 3:47 am

Not everyone can stand living here, perhaps you'd be more comfortable with your own kind in a red libertarian tax-taker state?

Posted by marcos on Jan. 29, 2013 @ 9:14 am

perhaps you'd be more comfortable somewhere cheaper like Oakland?

Posted by anon on Jan. 29, 2013 @ 9:33 am

We can afford to live here because we made rational, conservative choices that were within our means.

Posted by marcos on Jan. 29, 2013 @ 10:13 am

You might call that living. I don't.

Posted by anon on Jan. 29, 2013 @ 10:22 am

Self-centered troll.

Posted by Eddie on Jan. 29, 2013 @ 10:36 am
:)

Not everyone can deal with reality and handle life on life's terms. Perhaps you'd be more comfortable if you shoved your head even further up your own ass :)

Posted by Guest on Jan. 29, 2013 @ 2:56 pm

He thinks he can only exist in one possible microcosm of the planet and therefore desperately clings to that as if it is life itself.

It's rather sad.

Posted by anon on Jan. 29, 2013 @ 3:15 pm

just your detestible attempts at humor and your apparent misery.

Posted by Eddie on Jan. 29, 2013 @ 10:19 am

Miserable? The sun's shining, birds are singing, and all the entitled asshole, reverse-snob Guardian types will soon be booted out of town!

Having a great time, thanks!

Posted by Guest on Jan. 29, 2013 @ 3:04 pm

pimps to be driven out, and the city restored to what it was before rent control and NIMBY land use regs - the city that used to be.

Posted by anon on Jan. 29, 2013 @ 3:17 pm

TIC commune members and the scamster agents are the entitlement whores.

Posted by marcos on Jan. 29, 2013 @ 6:12 pm

than some whiney tenant squatting in a rent controlled hovel.

Posted by anon on Jan. 30, 2013 @ 10:11 am

only satisfied if everyone is exactly like you and thinks like you, and dismissive and hostile towards every one else. In San Francisco, of all places. Yuck.

Posted by Eddie on Jan. 29, 2013 @ 10:00 pm

If your landlord cashes rent checks issued by your children, the residence magically passes on to them! Try it, it's fun!

Posted by Mr. James on Jan. 30, 2013 @ 9:59 am

Lots of TIC owners today screaming they were lied to.

Posted by Guest on Jan. 28, 2013 @ 9:53 pm

If TIC owners are paying high interest rates or facing balloon payments the answer is to sue their brokers, unless of course legally there was full disclosure and the bag holders were informed co-conspirators rather than naive victims.

Posted by Guest on Jan. 28, 2013 @ 9:59 pm

Hi TIC prospect! Last year's average wait in the lottery was 5 years. But now that you and 6000 more people who me and my agent buddies are entering the lottery, hey, look over here, what magnificent period detail!

Posted by marcos on Jan. 29, 2013 @ 9:16 am

Ideall the lottery should just go away, as it has done for 2-unit buildings. They are being converted much more quickly now the city wants the fees. I know of what that converted in just 6 months!

Posted by anon on Jan. 29, 2013 @ 9:35 am

We need fraud prosecutions.

Posted by marcos on Jan. 29, 2013 @ 10:13 am

by dumb borrowers. They get flushed out but the other 95% are doing just fine.

Posted by anon on Jan. 29, 2013 @ 10:23 am

For a lot of TIC Owners, their homeownership opportunity came at someone else's expense--the tenants who developers kicked out under Ellis!!! Yeah,, developers lie, but I don't have a lot of sympathy for TIC owners who should have done their homework. Their bad decision's no reason to compromise the 30 plus year old condo lottery limit which is there to PROTECT RENTAL HOUSING.

Posted by Guest on Jan. 29, 2013 @ 12:08 am

I have lived in SF for 25 years. 6 years ago I was finally able to afford a home of my own - a TIC. Now I'm facing the same thing as other homeowners that I'm sure all the super left was screaming to save. We thought that when our mortgage started to adjust we could just refinance. Everyone does that, right? But now, no bank will touch a TIC jumbo loan refinance. No bank at all. None of us wants to sell or convert, but the only way to keep our mortgage rate down is to convert. All the existing renters would be protected, even more so than they are now! To the Guest above, we did our homework, but we never thought the economy would crash and the banks would stop doing refis. I am a low-middle class person. If I lose my home, I will have to leave the city. I am the kind of person that you normally would be screaming to protect, if I was a renter. If they don't want a whole new wave of another 2000 tic's entering the lottery, then why not change those rules and not allow TIC's to be formed anymore? And let those of us who have them now keep our homes.

Posted by Guest on Jan. 29, 2013 @ 5:35 am

Anyone who fell for the adjustable rate mortgage scam deserves what is coming to them.

Messing with renters who saw through these obviously fraudulent sales pitches by a handful of psychopathic TIC attorneys will only get you into even more trouble because we have already proved we are smarter than you.

You thought you were bright enough to play with professional real estate conmen and now you think you can play with the renters, both of whom are clearly your betters, and both of whom will swat you like the pesky insects that you all are.

Posted by Guest on Jan. 29, 2013 @ 8:06 am

We got our condo with a liar's stated income ARM loan and a second. The moment equity built, we refinanced down to more conservative financing. We did this several times over and now our mortgage payment is 55% of comparable rent. It can be done, but only if you realize that you've got to sacrifice in the short term to play by the rules to make things better in the long run.

Posted by marcos on Jan. 29, 2013 @ 10:15 am

3.25% is a steal. Call that 2% with the tax break. No wonder SF RE is booming again.

Posted by anon on Jan. 29, 2013 @ 10:26 am

And the reason why those interest rates are so low and the likelihood that these interest rates will stay low for the mid term are....?

Hell yeah we're at 30 fixed < 4%. Why are the TICsters not able to secure such favorable financing? Is all they can get funded for is their incessant whining?

Posted by marcos on Jan. 29, 2013 @ 10:36 am

you got yours and fuck everyone else? charming.
it has always been way more difficult and expensive to secure TIC financing, that is why TIC owners are seeking to convert to condos: for better pricing on their mortgage and to reduce the chance that somebody else's screw up's can come back to haunt them

Posted by guest on Jan. 29, 2013 @ 10:55 am

TIC owners got theirs now fuck all future tenants, change the rules and give them more?

Posted by marcos on Jan. 29, 2013 @ 10:59 am

saying fuck all tenants who don't want to be tenants?

Posted by anon on Jan. 29, 2013 @ 12:01 pm

Sickening, isn't it?

It's strange how SF is filled with people who own their homes but work against others who want the same thing.

Posted by Guest on Jan. 29, 2013 @ 11:33 am

Strange how people expect to have the rules changed for them so that they don't have to play by the same ones that everyone else has had to play by.

Posted by marcos on Jan. 29, 2013 @ 11:56 am

Pulling the rug under people who have already bought them?

Posted by anon on Jan. 29, 2013 @ 12:09 pm

In what year was your Mission District condo converted?

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

Around 2000, it was one of the last 2 unit buildings but was apparently always owner occupied.

Posted by marcos on Jan. 29, 2013 @ 12:21 pm

Are you saying that, in that case, you would not have bought it?

Posted by anon on Jan. 29, 2013 @ 12:41 pm

Probably not. We bought after our own eviction and had no appetite to continue the cycle of displacement.

Posted by marcos on Jan. 29, 2013 @ 12:45 pm
Posted by anon on Jan. 29, 2013 @ 4:07 pm