Rival condo conversion measures finally up for board vote

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Tenants groups and Sup. Chiu, Kim, and Yee announce a condo conversion compromise in April.
Rebecca Bowe

Controversial condominium conversion lottery bypass legislation is finally headed for a vote by the full Board of Supervisors this Tuesday. Befitting legislation that has stirred strong emotions and traveled a twisting political path over the last six months, there are new dramas and uncertainties cropping up at the last minute, including the lingering unknown of where Mayor Ed Lee stands.

Originally co-sponsored by Sups. Mark Farrell and Scott Wiener, the legislation was intended to allow 2,000-plus tenancy-in-common owners to buy their way past the city’s lottery that allows 200 conversions to condominiums each year. But tenant groups and their progressive allies strenuously opposed the idea, and it was amended by Sups. David Chiu, Jane Kim, and Norman Yee working with tenants to couple the bypass with a 10-year moratorium on new conversions, thus clearing the backlog without opening the door to speculators taking more rent-controlled apartments off the market.

The Land Use Committee voted June 3 (2-1, with Chiu and Kim voting yes and Wiener opposed) to send the tenant-supported legislation to the full board and keep a Wiener-backed rival measure stuck in committee. But since then, Wiener invoked a board rule allowing four supervisors to pull the stalled legislation out of committee, getting Farrell and Sups. Katy Teng and London Breed to place that rival measure on Tuesday’s agenda as well.

Tenant groups decried the move and have put out the call for supporters to flood City Hall for the 2pm meeting, but Wiener told us that the differences in the two pieces of legislation are minor. One difference deals with whether transfers of ownership interest will affect an applicant’s spot in the queue and the other involves the so-called poison pill inserted by tenant groups, which would freeze the conversion process if anyone challenges the legislation in court, as real estate interests have threatened to do.

Wiener said the tenant-backed legislation’s changes to condo conversion eligibility, such as a 10-year wait period and banning future conversions of buildings with more than five units, that would remain in place after a successful legal challenge is an unfair overreach. But Chiu said tenant groups have already compromised as much as they can and they need this protection: “This is a carefully constructed compromise, and for the first time tenants groups are supporting thousands of condo conversions.”

Breed’s concerns about the poison pill provision -- which was why she said she went along with Wiener’s play to bring up the rival measure -- go even beyond Wiener’s. While most concerns involved a lawsuit from real estate interests, Breed worries about a pro-tenant litigant who wants to stop all condo conversions.

“If anyone chose to sue, it would help renters by shutting down everything completely. Where is the incentive not to sue?” Breed told us, noting that she still doesn’t have a solution to the problem, but she wanted the leverage of rival measures in order to address the issue. “I’m hoping it’s a win-win for renters and TIC owners,” she said. “Everyone else is not my concern right now.”

But the real estate interests will almost certainly try to preserve an ability for speculators to continue funneling more rent-controlled apartments into the real estate market, and just yesterday, the San Francisco Association of Realtors announced the hiring of an influential new point person on lobbying and housing issues: Mary Jung, a former spokesperson for then-Mayor Gavin Newsom before moving over to represent PG&E, and who was last year elected chair of the Democratic County Central Committee.

That could make a difference when it comes to Mayor Lee, who has resisted efforts by both sides to weigh in on the issue, saying only that he supports both tenants and TIC owners and that he understands the concerns about opening the door to a flood of new conversion requests.

“The one wild card here is no one know where the mayor is,” Wiener told us, noting that neither side is likely to get the eight votes that would be needed to override a veto. “The mayor, if he wanted to, could have significant leverage in crafting a compromise.”
Chiu said that he’s confident that his version of the legislation has the six votes needed to pass, but that it is still unclear what Mayor Lee will support, despite Chiu asking Lee to weigh in publicly in February and privately during a meeting yesterday. As Chiu told us, “We’ll see.”

Comments

The opposition to this is insane.

In fact, the so-called tenant protections will lead to more tenant evictions. Why? Because if an owner has given up on ever being able to go condo, he will simply Ellis, TIC and cash out. there is no longer any incentive to play by the rules. Just evacuate the building and move on.

As always, the SFTU screws over tenants.

Posted by Guest on Jun. 07, 2013 @ 2:08 pm

concern troll is concerned

Posted by Guest on Jun. 07, 2013 @ 2:44 pm

with your ass. It's use usually signifies running out of credible arguments.

Posted by Guest on Jun. 07, 2013 @ 2:53 pm

I don't see how anyone could disagree with my ass. Its fabulous. That said, it seems like you aren't a fan of tenant protections and would like to see more TICs/condos. So if you think the SFTU is screwing over tenants wouldn't that be a good thing? Hence, concern troll.

Posted by Guest on Jun. 07, 2013 @ 3:10 pm
Posted by anon on Jun. 07, 2013 @ 3:22 pm

"Because if an owner has given up on ever being able to go condo, he will simply Ellis, TIC and cash out."

I don't understand why this makes sense. It seems like that owner who is waiting go condo (assuming they were allowed to do so) is going to Ellis the tenants also.

Posted by Guest on Jun. 07, 2013 @ 3:38 pm

Either:

1) Pay off or otherwise wait for your tenants to leave, and then TIC knowing that you can go condo after a few years

OR

2) Screw that, just Ellis, TIC and take the money. No waiting.

If the route to condo is delayed by 10 years because you are not already in the lottery, then you might as well Ellis

Result? More evictions.

Posted by Guest on Jun. 07, 2013 @ 5:10 pm

Without the prospect to convert to condos, TICs are mostly unsellable.

Posted by Guest on Jun. 07, 2013 @ 8:35 pm

They'll become the most affordable ownership option, and the continued improvements to the fractional financing model will improve salability.

Posted by Guest on Jun. 07, 2013 @ 9:36 pm

Especially for re-sales after the initial formation and purchase.

If condo conversion becomes too remote a possibility, there is no reason to wait for turnover. Just Ellis, TIC, sell and move on to the next building

Posted by Guest on Jun. 08, 2013 @ 5:51 am

A building full of them were sold earlier this year on my block.

In this booming RE market, everything is selling.

Posted by Guest on Jun. 08, 2013 @ 5:50 am

appalled that tenant advocates intend to "flood" this city hall meeting, thereby creating the almost totally false image that the people of this city oppose further home ownership opportunities.

But of course the hard-working nurses, teachers and others who stand to benefit from extra condo conversion will be too busy with work and families to attend, while the unemployed "usual suspect" activists who show up for every meeting will be there in force.

I suspect the Supes know this bias is unrepresentative, and it certainly seems to be the case when you watch their faces, and their eye rolling, as the endless hoi polloi stutter forth their two minutes of self-serving mediocrity.

Time to ban public comment, perhaps?

Posted by anon on Jun. 07, 2013 @ 2:18 pm

"As someone who believes in the democratic process... Time to ban public comment, perhaps?"

You have to admit that's funny right?

Posted by Guest on Jun. 07, 2013 @ 2:45 pm

have to sit thru hours of lame commentary by losers and nobodies before actually getting to vote.

You can email the Supes if you want them to know what you think, although it strains credibility to believe that they would give a flying crap. They were elected and that is far more democratic than listening to the kind of people who have hours to kill on a weekday when anyone productive is at work.

Posted by Guest on Jun. 07, 2013 @ 2:55 pm

I wish I could be there, but I have to work on Tuesday. I'm glad that some people either have the time to speak for those tenants who are too busy trying to put food on the table and pay the exorbitant rent, or else are dedicated enough to even take time off.

Unfortunately, as I've said before, both pieces of legislation are a step backwards. Chiu's legislation will pass; Farrell and Weiner's is dead on arrival. But even Chiu's legsilation leaves a gaping loophole. There's nothing to prevent a future board from going back on the deal and asking for even more condo conversions.

The best outcome would be for Lee to veto it. I'm not holding my breath though.

Posted by Greg on Jun. 07, 2013 @ 9:21 pm

But I'd agree with you that it's better if this doesn't pass. Those TIC's will all go condo eventually anyway, via the lottery, so why give up the ability to condo in the future just out of impatience?

While Ellis evictions aren't affected either way, and so can proceed immediately anyway. The city cannot stop them.

Posted by Guest on Jun. 08, 2013 @ 5:54 am

other than a bunch of rent-subsidized losers with a lot of time on their hands? Normal people are working then or picking up kids.

You really get a terribly unrepresentative sample of the citizenry at these hearings.

Posted by Lucretia Snapples on Jun. 07, 2013 @ 2:35 pm

patiently sit thru the endless parade of losers before voting exactly the way they had decided ahead of time to vote.

Few things are a greater waste of time than public comments which, sadly, take up 90% of the time of these meetings.

Posted by Guest on Jun. 07, 2013 @ 2:51 pm

The supervisors will stay as long as their supporters are speaking. As soon as someone from "the other side" (and it doesn't matter which side) starts to speak, they will bolt, and have their aide stay. Are you listending, John Avalos and Eric Mar?

Posted by Richmondman on Jun. 07, 2013 @ 3:30 pm

always entertaining. You can see the look of sheer boredom etched onto their faces as yet another "usual suspect" lower whines and rants.

Total waste of everyone's time/

Posted by Guest on Jun. 08, 2013 @ 5:55 am

The same can't be said about Scott Weiner or Carmen Chu. Ever try to talk to these people? Their eyes are stone cold -Carmen Chu especially -I don't think she's actually capable of human empathy. Weiner can fake it, but talking to him is like talking to (nice) brick wall. He's very respectful and then he'll respectfully tell you he's still going to screw you. 100% of the time.

Posted by Greg on Jun. 08, 2013 @ 8:38 pm

listening to one-sided commentary.

The kind of people who show up for these meetings are totally un-representative of SF voters in general.

For instance, they nearly all support Avalos over Lee, and yet Lee walked the election.

Posted by Guest on Jun. 09, 2013 @ 5:30 am

and say that you could never vote for a progressive. It's obvious anyway.

Posted by Greg on Jun. 09, 2013 @ 7:49 am

Plenty of politicians I have supported and voted for have achieved progress.

Many so-called SF Progressives have made regressive policies.

Posted by Guest on Jun. 09, 2013 @ 9:02 am

Um, hard working nurses and teachers will lose out unless more condo conversions are allowed? Is that a joke? Oh, yeah, my nurse and teacher friends are just standing in line to purchase those million $ condos. In fact, my teacher friends who've already been forced out will just come running right back to SF with their kids to buy that flat in the mission they were forced out of last year.
This guy can only be a real estate hack troll.

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Posted by Demaemiainczfvs on Jun. 12, 2013 @ 2:03 am

There's a lot of talk about landlords and renters here, but the reason I care about this legislation is that my wife and baby and I live in a TIC, which we own. I don't understand how this legislation affects renters at all, but it affects us very much! Not having TICs at all would probably help renters, but that's not on the table here.

What *is* on the table is the distinction between a TIC and a condo. This distinction is inconsequential to a renter, of minor consequence to a landlord, and is a very big deal only to an owner-occupant.

This is very bad for us, because our 6-unit building will not be eligible to condo convert, and if this legislation causes the TIC market to dry up, it may devalue our home and make it very difficult for us to stay in the city.

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