Tenants Clash with Homeowners Over New Condo Conversion Legislation

by Casey Mills on March 31, 2005

A group of tenant advocates rallied on the steps of City Hall yesterday to oppose new legislation that would allow hundreds of owners of “tenancies in commons” (TIC’s) to convert their homes into condominiums. The rally preceded a contentious Land Use Committee hearing pitting those concerned with the wave of evictions such legislation could spark against droves of property owners claiming they had a right to circumvent city law in order to turn a profit. The Committee, which voted to send the legislation to the full Board of Supervisors, ultimately sided with the latter.

The new legislation, sponsored by Supervisors Bevan Dufty and Michela Alioto-Pier, would create a massive loophole in San Francisco’s current law surrounding the conversion of housing units into condominiums. As it stands, those who purchase a TIC – a building in which several parties own the building, share the mortgage, and live in separate units – must enter a lottery before they’re allowed to convert their specific unit into their own private condominium.

The lottery only allows 200 people a year to convert their homes into condos. This cap was originally intended to stop a rash of speculation by real estate interests, who would evict tenants living in the TIC they purchased, then resell the building soon after at a profit.

Dufty and Alioto-Pier’s proposed legislation would allow every owner who currently lives in their unit and is waiting in the lottery – about 1500 people – to be immediately allowed to convert their unit into a condo. This loophole would include TIC owners who had not lived in their unit for at least three years, a necessary requirement in the current condo conversion law before one can enter the lottery.

The conversion of a unit into a private condominium usually increases the value of the property by at least $100,000. Many tenant advocates raised the point that calling for a waiver of the lottery now could spark another wave of real estate speculation in the future, and a consequent wave of evictions.

“This legislation will mean more evictions of seniors, disable and terminally ill people,” said Ted Guillickson, head of the San Francisco Tenants’ Union. “It’s an effort to gut the city’s condo conversion law.”

Dufty attempted to skirt this criticism by offering an amendment to the legislation that would prevent those TIC owners who had obtained their property through “bad” evictions – meaning evictions of seniors and disabled people – from enjoying the lottery exemption. However, Dufty only made the amendment applicable to those who had issued such “bad” evictions from last November to last January. Tenant advocates such as Steve Collier of the Tenderloin Housing Clinic dubbed the amendment meager at best.

The hearing, held in the Board of Supervisors chambers to accommodate the hundreds of citizens who attended, demonstrated an extremely well-organized campaign by conservative local political organizations Plan C and SFSOS. Property owners substantially outnumbered tenant advocates.

These property owners maintained that they had been waiting too long for the condo lottery process to grant them the ability to convert their units to condos. They said TIC’s made them financially vulnerable, because if whomever they shared a mortgage with did not make a payment, everyone living in the building suffered.

Property owners also claimed that their ability to make these conversions would greatly increase home ownership throughout the City. Several tenant advocates argued with this, pointing out that TIC owners already do own their homes, and that the primary impetus behind converting one’s unit into a condominium was to increase their property value.

“This is a thinly guised proposal that would contribute significantly to the long-time trend of San Francisco becoming more and more a city only for the rich,” said Sister Bernie Galvin of Religious Witness with Homeless People. “Ultimately, it will hurt our city.”

The Board of Supervisors will hear the new legislation in the coming weeks.

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