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From the June 2006 Newsletter:
By David Fix
The Board of Supervisors is constantly nipping at us with more and more regulations. Some are big bites, such as the latest Peskin legislation, and some are smaller nips, like Mirkarimi’s latest proposal. Supervisor Sandoval plans to introduce legislation that will limit the formation of TICs and condos. The Land Use Committee may hear this piece of legislation as early as June. Watch for announcements from SPOSF asking for your help in letter writing or speaking at the hearings. The Tenants Union is also proposing legislation to prevent the Sheriff from carrying out Ellis Act evictions. The list goes on and on and on.
It is the cumulative effect of these bites that will eventually destroy the small property owner-based rental housing stock. Until the Board of Supervisors adopts a more balanced housing policy, more and more small property owners will get out of the rental housing business. They will either leave their units vacant or sell them as TICs. Studies indicate that well over 10,000 rental units are now being kept off the market in San Francisco due to overregulation. While TICs are great for renters who want to be homeowners, it is unfortunate that this overregulation is forcing many of our long-time small mom-and-pop landlords out of their homes and their neighborhoods. Apparently, the Board of Supervisors is only concerned with keeping long-term tenants in place, not long-term small property owners.
As you know, the Board of Supervisors recently passed the Peskin anti-homeownership legislation, and it now awaits the Mayor’s signature. We worked very hard with other like-minded groups–-Plan C, the TIC Coalition, SFSOS, SF Apartment Association, and the SF Board of Realtors–-to defeat this legislation, and we thank those members who wrote letters and spoke at the hearing. We tried to convince Supervisor Dufty and Mayor Newsom to vote against this anti-homeownership legislation, but we were not successful in this effort. The Mayor’s office, Supervisors Peskin and Dufty “negotiated” amendments with the Tenants Union, “negotiations” to which small property owners were not invited. No one was there to represent our interests. Yet it is OUR properties, OUR small rental buildings, that this legislation affects the most.
While the amendments may make the legislation appear more reasonable” they will also make legal challenges more difficult. These amendments include:
- The legislation’s “retroactive period” was changed from 1999 to 2005;
- Senior tenants now require a ten-year residency before they are protected under this legislation. The original legislation only required a one-year residency. There is no residency requirement for disabled or catastrophically ill tenants.
- It allows for the eventual eligibility of TICs created after an Ellis eviction if the same owners occupy their units for ten years as long as no protected tenants were displaced. This is a change from a complete prohibition under the original legislation.
Tenant Amenities Law is just the latest nip
The most recent bite at us from the Tenants Union is sponsored by Supervisors Mirkarimi, Daly and Peskin. Their legislation would require that a housing provider have a “just cause” before terminating housing amenities such as parking, storage, laundry, common areas etc. Under existing law, a property owner can terminate these amenities by providing a rent decrease; no reason is needed. Tenants can always challenge this termination of amenities.
At the hearing, I asked that the legislation have an exclusion for owner-occupied small properties. I also stated that the unintended consequences of this may be that owners will no longer offer these amenities to new tenants. If you think that you will ever want to take back these amenities, you may want to reconsider offering them in the first place. If you have a garage space available, rather than offering it to a tenant in the building, rent it separately to someone who does not live in the building. You should be able to terminate this rental to a non-tenant renter without a problem. So will this legislation help renters? No! In the long run it will probably hurt them because owners will no longer offer “extra” amenities to tenants.
The Tenants Union states that the legislation is needed because landlords are taking away amenities as a backdoor to evictions. While we deplore any predatory treatment of tenants by landlords, we are tired of the unbalanced treatment of property owners. In San Francisco, property owners are guilty until proven innocent. Certain members of the Board of Supervisors assume that any action taken by property owners is predatory and malicious. It is this unbalanced view of property owners as inherently bad and tenants as inherently good that has escalated the tension between property owners and tenants. These Supervisors seem to prefer making neighborhood small property owners the scapegoat, rather than creating an environment that encourages them to stay in business as valued housing providers.
So the duck bites will continue and small property owners will deal with the overregulation until they have had enough and they get out of the business. If the Board of Supervisors wants to discourage people from selling units as TICs, then they must make it less burdensome and more financially feasible for them to remain rental-housing providers. Until that happens, the rental stock will continue to disappear. There is a cause-and-effect relationship that the Board of Supervisors either fails to see or to understand.
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