No sympathy for TICs

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Got a fascinating letter from a local lawyer named Richard Hurlburt, who has some thoughts on the TIC-condo conversion legislation sponsored by Sups. Scott Wiener and Mark Farrell. He writes:

I’m a tenant’s rights lawyer and real estate broker. Whenever possible I help tenants facing eviction buy their TIC units. I also own and reside in a TIC unit. My building has twelve units and would not be affected by the proposed law.

I just read the actual text of the legislation sponsored by Sups. Farrell & Wiener and I’m against it.

TIC financing isn’t that difficult anymore. Fractional loans are the norm and not that much more expensive than condominium loans. It does cost a little more to finance a TIC, but the units cost less to begin with. So I don’t really see a hardship on the part of TIC owners who generally have smaller mortgages because they paid less for their units to start with.

The supposed $20,000 per unit condo conversion impact fee to benefit low-income housing is largely illusory. The proposed law contains a reduction for each year the building has participated in the lottery, so a building that participated in the lottery for five years, which is the majority, would get an 80% reduction and pay only $4,000.

Although the law would provide lifetime leases for the few tenants occupying converted units, this benefit is seriously disproportionate. For the tenants getting lifetime leases, good for them but that is a huge windfall for a very few lucky individuals. For tenants generally the legislation is actually quite bad. Once any of the affected units becomes vacant, all future tenants would be exempt from the rent increase protections of the Rent Ordinance. And allowing certain owners to bypass the condo lottery will only encourage more Ellis-TIC conversions.

 

Comments

The affordability of TICs vanish for future generations when one is handed a windfall condo conversion. We need to build more condos, not turn affordable TIC stock into them.

Posted by Guest Molly on Feb. 23, 2013 @ 12:50 am

this ONE-TIME bypass.

There is no assurance that it will ever happen again.

Posted by Guest on Feb. 23, 2013 @ 8:07 am

On the one had we have the politics of envy "Screw you, Landholder!"
On the other we have the politics of disdain "The usual suspects (renters)" and at least ten people on this thread (and anyone who buys property, really) apparently believe that somehow 'saving and scrimping' to buy property makes them better people. 'Taking a risk' 'Investing capital' is brave and noble?
You also seem to feel entitled to a profit from your investment, at the expense of low-class grown folks in rent-controlled apartments, who, if they were worth anything, would have bought homes in their lifetime.

Wow. You guys are horrible. You think you own something but you don't because the bank has you by the balls. When it doesn't work out and your investment fails and the banks get richer you think you should be rewarded for trying to be rich too. Disgusting. Just because I don't follow your failing model of protestant self-sufficiency or swallow the "everybody can be rich under capitalism." lie, does not mean I am the 'usual suspects' tenant, lazy, underemployed or under-educated. You greedy bigots.

Posted by Guest on Feb. 23, 2013 @ 10:54 am