Plan C, and the C stands for Condo conversions

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No politically savvy San Franciscan has ever really bought the rhetoric espoused by the so-called “moderate” political action group Plan C that it's all about finding middle ground between what its website calls “a 'downtown' machine, and a far-left, dogmatic, so-called 'progressive' machine.” As if that unbalanced labeling wasn't enough of a indicator, the fact that its funding comes from all the biggest cogs in the downtown machine should be.

But now, as the group's members aggressively work to open the flood gates on converting San Francisco's rent-controlled apartments into privately controlled condominiums, it's become more clear than ever that the C stands for Condo and that the financially motivated group is moving the agenda of the real-estate and investment interests that dominate its Board of Directors.

City Hall sources connected to the ongoing meetings that Sups. David Chiu and Mark Farrell have been holding with stakeholders on the controversial condo lottery bypass legislation sponsored by Farrell and Sup. Scott Wiener say there were indications of possible compromise that came out of the first mediation meeting.

That one primarily involved the tenant advocates who have led the charge against the legislation and the representatives for tenancy-in-common owners seeking to buy a bypass to the city's condo conversion lottery that only allows 200 new condos per year. There were whispers that came from that meeting of a compromise that would allow a one-time bypass in exchange for shutting down the lottery for several years, or indexing it to the construction of new housing for low-income San Franciscans.

Since then, the sources say, Plan C and their partners in the real-estate industry have dominated the meetings with their dogmatic advocacy for indefinitely allowing the maximum number of condo conversions. Despite public statements by Farrell and Wiener that they just want to clear out some backlog without encouraging more landlords to convert apartments to TICs in the future, Plan C just wants to feed more affordable apartments into the expensive real estate market.

Some basic research on the group and its Board of Directors seems to show that this position is about financial self-interest rather than values or ideology.

Plan C Co-Chair Steve Adams is a regional manager for Sterling Bank & Trust, which has consistently been one of the city's top TIC lenders and which recently sponsored a forum encouraging more conversion of apartments, promising to increase its loan volume, and painting a rosy picture of the TIC financing market that belies Wiener's claims that TIC owners can't get financial relief and need the city's intervention.

One of the key presenters at that symposium was TIC attorney Lyssa Paul, who is also a Plan C board member and someone who makes her living creating more TICs. Other members of the 12-member board who make their living in the real estate industry and benefit directly for TICs conversions are Amanda Jones and Brian Hecktman. Other bankers or investment managers on the board that benefit from the TIC business are Ashley Lyon and Bob Gain.

Co-Chair Mike Sullivan is a venture capital attorney who created Plan C in 2001 and used it to help then-Sup. Gavin Newsom sell his Care Not Cash homelessness plan and run for mayor. Randy Brasche is in software marketing and got involved in the issue being frustrated with the condo lottery and [[CORRECTION/DELETION: last year]] forming the San Francisco TIC Coalition.

Board member David Fix is [[CORRECTION/ADDITION: the former]] president of the Small Property Owners of San Francisco, so it's possible that his interest is as much ideological as financial, particularly given his past public statements against rent control. That may also be the case with Baha Hariri, a principal at A&F Properties and the former political director of the downtown-funded-and-created Committee on Jobs.

Among the downtown players that fund Plan C, which was sitting on $73,872 in the bank as of the start of this year, are the Committee on Jobs, the San Francisco Association of Realtors, PG&E, San Francisco Apartment Association, Small Property Owners of San Francisco, Shorenstein Realty, the San Francisco Chamber of Commerce, and venture capitalist Ron Conway.

So Plan C appears to be little more than Plan A's deceptive effort to push Plan Condo. BTW, I've been waiting more than 24 hours now to get a call back from the Plan C board, after leaving a message with its only paid administrator, Richard Magary, who told me Sullivan and his colleagues are all quite busy now. But I'll be happy to update this post if and when I hear back.

2/22 UPDATE: Still no call back from Plan C, but Fix made a comment requesting the two minor corrections above. C'mon, Plan C, gimme a call, what are you so afraid of?

Comments

You are one either one of these people or you are one of the criminals who have chosen to rob them as your profession....fractional TICs are just the latest fraud.

"February 24, 2007 the Wall Street Journal interviewed Lewis Ranieri when he was at Salomon Brothers. He worried about the proliferation of risky mortgages and convoluted ways of financing them, saying “too many investors don’t understand the dangers.” He also worried that with so many risky mortgages being packaged and sold in slices to investors all over the world, U.S. mortgages were being spread to a much less sophisticated community. Some risky mortgages probably will perform ‘horribly’ in terms of defaults due to subprime mortgage fraud, leading to major losses for some investors.”

http://www.seegerweiss.com/law-practices/securities-fraud/Subprime-Mortg...

-Risky Mortgages and Subprime Mortgage Fraud-

Posted by Guest on Feb. 23, 2013 @ 7:11 am

Worry more about paying your rent

Posted by Guest on Feb. 23, 2013 @ 8:56 am

Let's see what happens to the health of mortgages once QE is withdrawn.

Posted by marcos on Feb. 23, 2013 @ 9:44 am

economy has grown enough to allow inflation and growth to make the debts more manageable.

And QE is working. SF RE at an all-time high, and stocks within 1% of their all-time high. Ben's strategy is working - you must really hate that.

Posted by anon on Feb. 23, 2013 @ 9:57 am

and part of their rent pays property taxes because their rental payments are higher than the property owners costs. That's why people become landlords--to make a profit.

Your disingenuity know no bounds.

Posted by Eddie on Feb. 23, 2013 @ 8:35 am

It is the cost of buying and maintaining the property.

The rent has to cover ALL those costs and then give a profit that is at least as equal as the ROI on any equivalent investment.

Where those costs are not covered and that ROI isn't there, then the business is closed which, for a landlord, means Ellis.

Posted by Guest on Feb. 23, 2013 @ 8:58 am

Property prices reflect their value, so that poor owner you describe would that have paid far less than market rate because of rent control, just as those who buy TICs are getting good deals precisely because of the limitations they face, which the government is now trying to remove. If it weren't for rent control, multi-unit buildings in San Francisco would be far more expensive. The fact that right-wing lawmakers in Sacramento undermine the housing dynamics of a city they don't like, understand, or support should have nothing to do with the decisions that we as San Franciscans make about our needs. The bottom line is that landlords and TICs owners knew the rules and got good deals because of those rules, and now they want to change them in order to enrich themselves.

Posted by steven on Feb. 22, 2013 @ 2:33 pm

Why do you complain about Ellis evictions when you knew that was the law when you first rented? And yet that does not stop you whining about Ellis, and wanting the rules changed.

So why criticize others for the exact same response?

Posted by anon on Feb. 22, 2013 @ 3:05 pm

Not really complaining about the rules we're complaining that the rules are being changed to benefit the usual criminals.

Posted by Guest on Feb. 23, 2013 @ 7:24 am

he knew about them when he chose to rent.

So there is a hypocrisy here i.e. it's "OK" to want to change the Ellis rules but it is not "OK" to want to change the TIC rules.

And the TIC change harms nobody, but an Ellis change will harm property owners.

So, it's pure bias and prejudice on Steven's part. Shocked?

Posted by Guest on Feb. 23, 2013 @ 8:17 am

The argument you and Anon are making here is illogical. Unless I want to be homeless or I fall into a fortune, I have no choice but to rent my home, abiding by whatever statewide rules (ie the Ellis Act) are in place. Those with the means to buy a home have many options, and if they choose to do a TIC in San Francisco, they'll pay less than market rate for the home but assume several other downsides for that decision, including a shared mortgage and difficulties in refinancing. It's a choice they make willingly, and not the same thing as renters being forced to accept whatever rules those with more financial and political power have created for them. 

Posted by steven on Feb. 25, 2013 @ 10:34 am

Ellis'ed. Here are just a few:

1) Pay a market rent
2) Live outside of SF, where rent control generally does not apply and yet (interestingly) rents are actually lower
3) Do not hog the same unti your entire life
4) Move away from the Bay Area to somewhere with a 20% rental vacancy rate like Phoenix or houston

But if you do rent in SF, know that Ellis is a risk and, if you hog the place long enough, a near certainty. So why whine about the rules?

Posted by anon on Feb. 25, 2013 @ 11:15 am

Rules/laws change all the time. For instance, when rent controll was put into place, the existing rules changed. I think it is a pretty weak argument to just say that TIC owners want to change the rules.

Further, the change in the rules that they are seeking may be to "enrich" themselves in some instances. But in other instances, they are just seeking to make their living situation more stable by being able to refinance as a condo at a much reduced interest rate. Who needs more foreclosures in SF? That hurts everybody.

I think throwing these people a bone isn't the end of the world and with the protections for renters that have been included in the law, a decent balance of interests has been met.

obviously, reasonable minds may differ...

Posted by guestD on Feb. 22, 2013 @ 3:28 pm

objecting to it is like objecting to gay marriage, which doesn't affect anyone except gays.

But of course if you wage class warfare, then it's more important that they other side lose than that you win.

Posted by anon on Feb. 22, 2013 @ 4:27 pm

That's simply not true, anon, however many times you want to repeat this lie. Every condo conversion takes an apartment off the rental market, which affects that market and everyone in it, which is two-thirds of San Franciscans. You can't get something from nothing, and most of the "new" condos created by TICs are rent-controlled apartments that are in high demand by the working class of this city.

Posted by steven on Feb. 25, 2013 @ 10:39 am

when it became a TIC, and is now owner occupied.

In fact, it is MORE likely to be returned to being a rental if it is allowed to go condo, because the owner would then have more incentive to re-rent it.

The untis you claim to want to "save" have already been lost forever. And why? Because rent control went too far and have the LL a sub-optimal ROI.

Posted by anon on Feb. 25, 2013 @ 11:20 am

Steven, The SFBG really want these trolls here, more than you want liberals and progressives to participate here, don't you?

Posted by marcos on Feb. 25, 2013 @ 11:33 am

"But why should anyone have an entitlement to a low rent?"

Heard that before....

""There are 47 percent of the people who will vote for the president no matter what," Romney said at a private fundraiser in Florida. "All right -- there are 47 percent who are with him, who are dependent on government, who believe that, that they are victims, who believe that government has the responsibility to care for them. Who believe that they are entitled to health care, to food, to housing."

- Mitt Romney

Posted by Guest on Feb. 23, 2013 @ 7:18 am

It isn't about being more "virtuous" - it's about creating security in our (like it or not) capitalist society. It's about having something that provides far greater protections under our system of laws.

Having among the lowest homeownership rates in the country is unacceptable.

Posted by Guest on Feb. 22, 2013 @ 11:12 am

What could be more capitalist than collecting rent from one's capital investment? And why is our low homeownership rate "unacceptable" if you aren't judging homeowners to somehow be more virtuous and desireble? In a city where tourism is our top industry, one brimming over with low-wage workers serving high-income visitors and residents, on a peninsula accessed by transportation options that are all maxed out, it makes no sense to force this city's working class to live elsewhere. And the only way to keep them here is to protect rent-controlled housing for the two-thirds of San Franciscans that don't own their homes.

Posted by steven on Feb. 22, 2013 @ 2:41 pm

Since when? What about the East Bay as a housing solution?

Posted by Lucretia Snapples on Feb. 22, 2013 @ 2:54 pm

It might make you look like a local to be aware of that, though.

Posted by lillipublicans on Feb. 22, 2013 @ 3:29 pm

down there below the normals lil' lilz?

Posted by Lucretia Snapples on Feb. 22, 2013 @ 3:59 pm

Distract, deflect and obfuscate.

Posted by Guest on Feb. 22, 2013 @ 4:28 pm

He never really adds anything to the conversation.

Posted by Lucretia Snapples on Feb. 22, 2013 @ 4:44 pm

question as to the maxed-out capacity of BART.

Pointing towards her previous self-revelatory malapropism in using a direct article before the transit agency's name is simply "icing on the cake."

Posted by lillipublicans on Feb. 22, 2013 @ 4:53 pm

One of lil' lilz oldies but goodies. Golden hits include "you're not REALLY from San Francisco."

Posted by Lucretia Snapples on Feb. 22, 2013 @ 5:30 pm

sure, it's busy at rush hour. What isn't. But living a few minutes away in Oakland or Daly City isn't a big deal for those who cannot afford SF.

Posted by Guest on Feb. 22, 2013 @ 5:32 pm

the Bay Area. and it is typical in many world-class cities that the downtown is too expensive for many workers who then commute into downtown.

The Poles who work in London, the Sri Lankans who work in Geneva, the Turks who work in Frankfurt, and the Algerians who work in Paris all commute in from the burbs.

So why not here?

Posted by anon on Feb. 22, 2013 @ 3:08 pm

One point that many folks are forgetting in their frenzied grasp for money & power is that San Francisco has, for decades, been globally influential because it doesn't automatically bow down to those who are both rich (in money) & indifferent to their neighbors' concerns (i.e., indifferent to others' concerns). We are known to be a city that makes every attempt to continue to be INCLUSIVE, which is why SF is representative of hope internationally & domestically. If you want to live in a city like every Other city, move away. This issue ( plus most others that S. Wiener represents) is a blatant attempt to change what's best about SF - its DIVERSITY. And why? In part because we now have a shrewd, nay, dishonest wiener who disingenuously calls himself a "good, liberal Democrat," despite his very Republican agenda. Maybe we San Franciscans have gotten politically rusty from an absense of cunning Republican opponent. So here's a reminder that will help us assess who is what: If you want to know a person, look only at his actions, not his words. Thanks stjones for your profile, even tho Wiener's duplicity makes me sick.

Posted by Guest on Feb. 22, 2013 @ 4:41 pm

Usually cited by those who have never lived anywhere else, and so think they could not live anywhere else, and so feel entitled to live in SF, even if they cannot afford it.

And hide behind meaningless code words like "diversity"

Posted by Guest on Feb. 22, 2013 @ 5:31 pm

People who brag about how rarely they leave. It's like - there's a whole other world out there and a lot of it is pretty awesome.

Posted by Lucretia Snapples on Feb. 22, 2013 @ 5:43 pm

place else, but it is of course a delusion based on low self-worth.

SF exceptionalism is as unattractive as US exceptionalism.

Posted by Guest on Feb. 22, 2013 @ 6:55 pm

No one is more diverse than an aging white person in rent-controlled housing!

Posted by Demented, Yet Terribly, Terribly, Persistent on Feb. 23, 2013 @ 7:33 am

The low homeownership rate is Unacceptable because the people who live in this city - those who make this city what it is - should be the owners of it.

Owners don't live in fear that livability improvements translate into eviction. They directly benefit from them.

It is not a question of "virtue" or "judging". It is simple, pragmatic reality.

Posted by Guest on Feb. 22, 2013 @ 3:53 pm

The current situation makes no sense- Live in your unit as a renter and it's yours with protections for as long as you like. Decide you'd like to own that very same unit and you have no protections. Same housing for the same individual, yet your bias if for the former. That's not good housing policy and the city should not be promoting or discouraging either choice (to buy or rent).

Rent control only benefits a single individual at a time. Every new renter that moves to this city is taking for themselves a rent controlled unit at market rate (I doubt you really care about the Twitter/Google/Appler's and their ilk). If that renter chooses to become an owner in the form of a TIC/rather than rent, there's not net change in "affordable" inventory. Same unit for that one individual.

It's a stretch at best to suggest that the TICs (being mostly lived in by former renters) that are eligible to convert to Condos have taken away "affordable rentals". We can all agree there is nothing affordable about current market rents, and all of these TIC units, were they not being lived in by their "owners", would be rented out at market rates. Also the SFBG conveniently leaves out in its reporting of this issue that a TIC that has eviction/Ellis act histories is not eligible to become a Condo under current rules.

If you're interested in reporting the facts, why don't you report that not all TICs are the same, and that only a fraction of those TICs that exist in this city are eligible under current law to participate in the lottery and condo conversion process. That TIC owners deserve the same housing stability as owners as they did as renters.

Posted by @Steven on Feb. 22, 2013 @ 1:55 pm

Considering Prop 13, open ended Federal Reserve stimulus, IRS tax breaks, and GSE mortgage support, I've seen Tenderloin crack addicts saner than the SF housing market.

Posted by Guest on Feb. 22, 2013 @ 2:19 pm

If you're not one of them, then you should be bitter.

Posted by anon on Feb. 22, 2013 @ 2:37 pm

"Many people have becoke millionaires thru SF RE"

Oh sure lots of millionaires.

"In 2008 alone, the United States government allocated over $900 billion to special loans and rescues related to the US housing bubble"

http://en.wikipedia.org/wiki/United_States_housing_bubble

Posted by Guest on Feb. 23, 2013 @ 7:50 am

home equity. If you are not one of them then envy, while understandable, is not persuasive.

Posted by Guest on Feb. 23, 2013 @ 8:13 am

sell the house and afford to buy another one. Good luck with that in an hyperinflated market. Or if you downsize, or if you move to an area with cheaper real estate, or if you die and leave the property to your heirs, who can cash out. And if you buy near the peak of a speculative bubble, well good luck with that. The effects of that are clear on the millions nationwide who will never regain their pre-2008 footing.

That's why the Fed is trying to reinflate the housing bubble. The real economy is largely dead. For the last 15 years, consumer spending was fed by people using their houses as ATMs. That well is empty. Now policymakers are financing their hedge fund friends for quick profits on distressed properties. Fuck the commoners.

I'd rather have cash in the bank then all my assets tied up in speculative real estate and be in debt. Too many TIC owners drank the American Dream kool aid and find themselves in a worse financial situation than they imagined or than the real estate criminals led them to believe.

Posted by Eddie on Feb. 23, 2013 @ 8:31 am

1) Everyone needs homes - demand is universal and enduring
2) It's a real asset, not a security
3) Home prices relate to income, and income goes up with inflation
4) The population and the economy is growing

More millionaires are made by reale state in America than anything else. It works and it is proven.

Posted by Guest on Feb. 23, 2013 @ 8:55 am

to live in a nice rent-controlled apartment that we maintain well, enabling us to save money rather than being saddled with a more expensive mortgage for a possibly underwater property.

I've seen the financial situations of many of my cohorts destroyed by the bursted housing bubble and deteriorated labor market.

You have many negative stereotypes about renters and working class people. Talk about social engineering.

Posted by Eddie on Feb. 22, 2013 @ 9:59 am

They pay off their loans. One in three homes in the US are owned free and clear.

If you want to spend your life renting, then fine. But over the last 30 years I have accumulated 2 million in home equity, while paying probably less in total, after tax, than you did in rent.

Your choice, of course.

Posted by anon on Feb. 22, 2013 @ 12:21 pm

people to move from their homes, by practicing wage theft against vulnerable undocumented workers, and by bribing DBI inspectors.

No thanks.

Posted by Eddie on Feb. 23, 2013 @ 4:56 pm

Do I molest choldren too?

Evictions are routine all over the planet. Why would you expect SF to be different?

Not everyone can afford to live in the world's favorite city.

Posted by anon on Feb. 23, 2013 @ 6:24 pm

"I don't know which guy that was but I have used day laborers and
have been very satisfied with their efforts."

"Since when is giving someone a job "exploiting" them?

Would it be better to leave them on the street earning nothing? The fact they compete with each other to be hired when I pull up in my truck should tell you that they want my business and appreciate my custom.

And, again, the employment regulations only apply to an employer. when you call out a plumber to fix your toilet, you are not entering into an employment contract with them. They are self-employed, and so the taxes and requirements are self-provided.

Oh, and here's a clue. If you ask someone whether they are breaking the law, they will always say "NO", regardless of whether they are or not"

"Bribes. I never met a DBI guy who didn't take them."

Posted by Eddie on Feb. 23, 2013 @ 11:33 pm

Only you would rather see them starve than work.

Posted by anon on Feb. 25, 2013 @ 11:13 am

"the overwhelming majority of Americans either own (about 65%) or want to own...."

Sounds like a real nightmare.

http://www.cnbc.com/id/45209336/Half_of_US_Mortgages_Are_Effectively_Und...

Half of US Mortgages Are Effectively Underwater

Posted by Guest on Feb. 22, 2013 @ 11:55 am

"If you have no pride in your home nor desire to build
wealth or long-term security, then I suppose you might think that."

Trying to understand how a 7 year interest only balloon loan builds long term security.

Posted by Guest on Feb. 22, 2013 @ 12:02 pm