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

the SFBG should emphasize. Uncovering the financial relationships and economic interests behind the people trying to hijack what's left of our "democracy."

If you want your viewpoint represented, talk to the journalist. Complaining after refusing to speak is whining and childish.

Posted by Eddie on Feb. 23, 2013 @ 8:43 am

I found this article in support of rent control in SF. Thought I'd pass it along:

http://www.pinkbarrio.com/blog/articles/protejamos-la-ley-del-control-de...

Posted by Guest on Feb. 22, 2013 @ 3:50 pm

False characterizations of the proposed conversion law to get the customer fired up to buy their product. Hilarious.

Posted by Guest on Feb. 22, 2013 @ 5:27 pm

Denial. Denial is not hilarious.

Posted by Guest on Feb. 22, 2013 @ 5:58 pm

Ellis Act evictions reek of the little kid who takes his ball home and refuses to play with others. An entitled bore.

Insight into the philosophy of the economic rulers: we get what we want by making sure the rules insure our interests, and we'll subvert any rules that protect the peasants that might have slipped through our grasp in a moment of weakness.

Posted by Eddie on Feb. 23, 2013 @ 8:50 am

The State officials whom we elected saw fit to pass a law restricting the worst excesses of local rent control i.e. Costa-Hawkins and Ellis.

It is the guys you voted for that passed these laws.

Posted by Guest on Feb. 23, 2013 @ 9:00 am

The Ellis Act is straightforward: an owner is free to exit the rental business. The most effective way to limit Ellis Act evictions is to create incentives for owners to stay in the rental business. More realistic annual rent increases? Means testing? Rent vouchers?

Posted by Guest on Feb. 23, 2013 @ 9:48 am

strict rent control. So, for instance, both Oakland and Berkeley have rent control, but in a milder form. This helps the poor but isn't too invasive, punitive or confiscatory.

Result? No Ellis evictions in either city, as far as I know.

The best protection against eviction for a tenant is to pay a decent rent.

Posted by anon on Feb. 23, 2013 @ 10:07 am

Get rid of rent control, and there will be no such thing as decent rent.

There will be 1% vacancies every year, and tenants will be handed monstrous increases because landlords will know the renter has virtually nowhere to go. This is why we have rent control to begin with.

Sure, Ellis evictions wouldn't go on if the stabilization laws were lifted, but only because landlords would be able to screw tenants with complete impunity.

And if we're going to ask for "decent'' rents, let's also demand reasonable property taxes from longtime owners so income and sales taxes can revert to lower 1978 levels. Let's demand that these TIC owners make decent payments on their property -- what they agreed to pay when they purchased, not lower costs that allow them to skirt the risks of their own choices and the free market.

Let's undo all the excesses of protecting the ownership society. Let's demand that interest rates reset to proper levels and be forced onto owners, because we're all about undoing contractual rights for renters, who have been forced to bail out banks gutted by idiot owners. Let's make flippers go back and pay taxes on their profits. Let's make anyone who has ever scored in real estate pay the same taxes on that profit that hard workers pay on their wages. Let's make the red ink of Fannie Mae, Freddie Mac and the FHA be absorbed only by their mortgage holders, and not offloaded partly to tenants.

Above all, let's reverse the non-recourse nature of CA mortgages and make defaulters pay off their remaining debts. That would include Supervisor Malia Cohen, a tenant hater, whose idea of property rights does not include the responsibility of paying the agreed-upon sum for the property. She defaulted on a $600,000 mortgage, leaving a deficiency of $270,000 that the bank will seek from innocent taxpayers. Garnish her wages until the debt is paid.

So what if she had a mortgage deal that permitted her to walk away? Rent control is a deal that you and she want to kill. You expect "decent'' rents? Then let decency overrule the deal that abetted bad behavior by Cohen and millions of other mortgage deadbeats.

Posted by Guest on Feb. 23, 2013 @ 2:37 pm

and the average rent for vacant untis went down.

Not very convenient for you, I realize, but no less true for that.

The rest of your endless prose was the usual left-wing nonsense that you rarely hear outside of college.

Posted by anon on Feb. 23, 2013 @ 2:56 pm

The complete story is (I guess "anon" doesn't know how to use Google):

Time to Bring Rent Control Back to Boston, Cambridge?
Monday, January 9, 2012, by Tom Acitelli
In 1994, Massachusetts residents voted 51 percent to 49 percent to do away with rent control in Boston, Cambridge and Brookline. Rents jumped, driving tenants to cheaper digs, but so did housing quality, as landlords were able to make capital improvements with the higher rents in hand. Now, with rents going nowhere but up Hub-wide (even micro-apartments will cost ya), we ask the question...

http://boston.curbed.com/archives/2012/01/time-to-bring-rent-control-bac...

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

Also...

Jan 12, 2012, 12:52pm EST
Hamilton Co. CEO Harold Brown warns landlords that raising rents too high could bring rent control back to the Bay State.

"Boston’s apartment vacancy rate at 1 percent and rising rents add up to one thing for Hamilton Co. CEO Harold Brown: the prospect of a return to rent control."

Posted by Guest on Feb. 23, 2013 @ 11:18 pm

The going rent for a vacant unit decreased.

Posted by anon on Feb. 25, 2013 @ 11:09 am

months without any backing except some Cato Institute study for which he can't even provide a link.

Thanks for providing some real information.

I'm familiar with Harold Brown from my time in Boston. He once owned something like one-third of all rental apartments there. He once said to the head of the housing inspection department, "What else is there but to acquire?"

Posted by Eddie on Feb. 23, 2013 @ 11:40 pm

Try it sometime, Eddie.

Posted by anon on Feb. 25, 2013 @ 11:08 am

A means tested property tax credit?

Posted by Guest on Feb. 23, 2013 @ 2:35 pm

Older homeowners do get a break, however, as you would expect.

Posted by anon on Feb. 23, 2013 @ 2:57 pm

Rent control is just Prop 13 for renters, and we do not means-test Prop 13. Means-testing for rent control would keep the trust-fund babies in place and ruin hard workers.

Let's not inflict the free market on only one group of people. Dump all prop-ups for homeowners -- including the lowered interest rates and $8,000 tax credits -- before touching rent control. We have transferred far too much wealth to the ownership society in the last 6 years. To attack renters now is an abomination. They have been forced to pay for the foolishness of the ownership society long enough.

Posted by Guest Molly on Feb. 26, 2013 @ 9:29 pm

"True, cago, but of course the opposition to condo's is all from
losers who never made an effort, took a risk, worked hard or saved."

Renters have to work hard. They either pay their bills or get evicted. No foreclosure moratoriums for them. No modifications to push down their costs. No principal writedowns. No benefit -- only deleterious inflation -- from the suppressed interest rates aimed at protecting overextended mortgage holders.

In SF, they do get something comparable to Prop 13, but you believe that makes them losers.

A lot of us actually save very hard. I do, and I hoped to buy a home during the boom. I went out in 2004 and soon realized that my down payment and decent salary would not allow me to outbid people with no down payments and lower salaries unless I took out the same stupid mortgages they were using.

Even then, I knew government would bail out these people. Why? Because our country has been brainwashed into believing that homeowners are the true Americans, and renters are trash. It wouldn't matter that these buyers (and serial cash-out refinancers) were spectacularly foolish and irresponsible. They would still be held in higher esteem than prudent renters. They would be allowed to kill the economy, and government would rally to save them while ignoring the collateral damage. Maybe I should have bought in and waited for my bailout, but I can't help looking at things from the perspective of a self-reliant, responsible person.

I almost didn't move to SF because of the volatile housing prices. When my landlord explained the rent stabilization laws, I changed my mind and took my new job. It seemed like a sensible approach to finances, just as I'm sure mortgage interest deductions seem sensible to many homeowners. Both are government interference, but somehow I imagine you would not see them as comparable.

I continue to work very hard, save hard and watch in disgust as government props up real estate prices. At the same time, government fails to offer the majority of renters any remotely comparable protections from the free market it allows mortgage holders to dodge.

My landlord has been able to refinance from a 1993 interest rate to a 2013 one that is more than 50 percent lower. He has been able to pay 1990 tax rates and a principal based on 1993 crash prices. I am paying 2001 rent adjusted for inflation $1950 for a 1-bedroom). I am largely fine with that, because I accept the consequences of my choices.

But don't bash me as a renter. Government redistributes from me to the ownership society by raising taxes to compensate for Prop 13, by allowing $8,000 tax credits for two years of purchases, and by lowering interest rates in ways that decimate my savings, devalue my paycheck and artificially inflate my rent -- all so that homeowners can be "saved'' from their own choices. All the while, my ability to buy my own home is impeded by protections the current owners are receiving from the free market. These protections, unlike rent control, were not in place when these people bought.

Their irresponsibility generated endless pity parties and pleas to "keep people in their homes.'' Guess what? Rent control keeps people in their homes, too. It should be nationalized now that property owners have been nanny-stated beyond all reason.

Posted by Guest on Feb. 23, 2013 @ 2:14 pm

renters. In fact, several:

1) There are more owners: about 65% own nationally
2) Owners are more likely to have families
3) Owners are more likely to be more economically productive
4) Home ownership tends to confer more stability

and so on, which is why voters vote for these breaks - it's not "the government" decidind this - it is US.

SF LL's would LOVE it if renters "rise up". Evicting for non-payment of the rent is a doozie. Go on, make my day.

Posted by anon on Feb. 23, 2013 @ 2:53 pm

I wish to make an inquiry. Are you paid per word or by paragraph, and which supervisor(s) and/or Real Estate Industrial Complex entities are paying you? And it's (at least) an 8 hour day and you don't have weekends off, since you're on here today.

Do you find it more lucrative financially per word or by paragraph? There has got to be an incentive for you otherwise you would not be "occupying" this site as much as you do with your remedial "anon" screen name.

Your spamming/saturation of this site with your right-wing, pro-Real Estate Industrial Complex, pro-homeowners, pro-TIC, smug elitism and amateur trolling reminds me of what this forum looked like during the sit-lie "debate." A cesspool. It was no different then.

I clearly remember you from recently (unfortunately). You're that redneck hick who wants to turn San Francisco into Topeka. You wrote some diarrhea about two weeks ago on here that explicitly implied that all people are straight and that "white liberals" can't make a commitment to a woman. In that same mess, you wrote willful-ignorance about renters. Clearly you have all of this time on your hands for saturating this forum with your right-wing filth.

Can't they find something for you to do with your limited abilities at Westboro there in Topeka? It would be easier than trying to bring Topeka here, which is your goal. Maybe you should inquire of them tomorrow when you're there for services, pleb.

International Troll Society Member #12360969212

Posted by International Troll Society Member #12360969212 on Feb. 23, 2013 @ 3:36 pm

Are you a barrister in service to her majesty per chance?

Fucking poser.

Posted by Lucretia Snapples on Feb. 23, 2013 @ 9:21 pm

Or maybe that's marcos.

Posted by anon on Feb. 25, 2013 @ 11:16 am

How about we amend the legislation and say that these converted units we will be under a special provision where they are still subject to rent control for something medium term, like 10 years?

Posted by Guest on Feb. 25, 2013 @ 9:04 pm

There are restrictions over re-renting that expire after 5 and 10 years.

Posted by Guest on Feb. 27, 2013 @ 2:52 am

TIC's are bullshit, period. they aren't a good investment, they are NOT condos, and only an idiot would buy one.

Posted by Guest on Mar. 01, 2013 @ 3:32 pm

life, so that landlords like me can collect rent that will eventually be more than their home is worth, will pay off my mortgage, and will give me great tax breaks.

Yes, please, please don't buy a TIC because there is so much more money I want to make off you before you eventually die in your rent-controlled hovel.

Posted by Guest on Mar. 01, 2013 @ 4:15 pm

Speculators create TICs by evicting tenants, then renovating and selling as TICs to gullible people.

By the time those gullible people buy the TICs, the tenants are long-gone, most likely forced to move out of SF.

The fact that speculators work in concert with unscrupulous lawyers and bankers to get those TICs to market adds insult to injury. These people have no scruples, they only seek their own profits. They could care less about creating an "ownership" society.

Posted by Guest on Mar. 01, 2013 @ 4:52 pm

tenants buying out their landlords. There are many paths to home ownership.

But hey, if you don't like the idea of a TIC, then stay renting. I'm sure there are plenty of property owners willing to collect rent from you.

Posted by Guest on Mar. 01, 2013 @ 5:08 pm