On March 8, Andrew Sirkin, one of San Francisco’s most prominent land use attorneys involved with converting rental housing into Tenancy in Commons (TICs), will hold a public seminar in Los Angeles detailing the use of TICs as a means to homeownership. The event may reflect that the supply of 2 to 4 unit buildings in San Francisco that can be converted to TICs is decreasing, and those that profit from TIC conversions hope to expand their market to other cities. Their success remains dubious, as the housing market in Los Angeles may not be difficult enough to create buyers willing to share mortgages with strangers. However, should TICs catch on down south, the area could see a dramatic spike in Ellis Act evictions alongside a significant shift in their housing market.

Because TICs require that the residents of each unit in a multi-unit building share both the liability and the mortgage for the entire residence, banks rarely provide financing to buyers wishing to purchase a unit in buildings any larger than 4 units. This forces lawyers like Sirkin seeking to convert rental housing into TICs to primarily confine their searches to smaller buildings.

The recent rash of conversions of rental units to TICs locally - causing a spike in evictions through the Ellis Act on par with the rate occurring during the dot-com boom - may be beginning to slow, however. During the past six months, the number of applications for TIC conversions per month in San Francisco declined from an average of 40 units to an average of 31. The fact that a limited number of smaller buildings exist in San Francisco, as does the number of owners willing to sell their rental housing units, are likely the primary reasons for the trend.

This decline now appears to be forcing TIC proponents to begin the search for other cities where they can engage in the practice, and the first targeted location is Los Angeles. Sirkin’s seminar there next month will detail for attendees the process of creating a TIC, the state a local regulations on TIC conversions, and ways potential buyers can finance TICs.

Perhaps most troubling, the seminar will also include information on the using the Ellis Act to evict tenants so a condo conversion can take place. The Ellis Act remains a rarity in Los Angeles, but should TICs become popular there, the city could see a major increase in evictions and the displacement of primarily low-income residents that accompanies them.

Los Angeles, however, remains home to a dramatically different housing market than San Francisco. While prices have skyrocketed down south as well, the crunch on available homes available for purchase in L.A. doesn’t approach the level of San Francisco’s. TICs may simply be a creation of the severe housing crisis our city faces, and could seem far too risky to those living anywhere else.

If TICs became commonplace in L.A., along with the rash of Ellis Act evictions that would likely accompany their grown, there could be a silver lining for tenant advocates – attempts to change state law governing the use of the Ellis Act could gain steam. Los Angeles’ large population gives it a high number of state representatives, and widespread displacement could generate enough uproar to push these representatives to action.

Lawyers like Sirkin will continue to push TICs regardless of whether they fail in Los Angeles. Their livelihood depends on it. Another option besides expanding market geographically would be to increase the size of buildings where TICs could exist.

The primary means for achieving this would be to find more banks willing to finance individual loans for people who want to purchase a unit in a large TIC. While the Bank of Marin recently offered a certain number of these type of loans, the money allocated by the Bank for the purpose was quickly spent. Several new banks, however, have reportedly created simliar loans.

However successful Sirkin’s seminar in Los Angeles is, it remains certain that TICs - and the Ellis Act evictions that often accompany there creation - are not going anywhere anytime soon.