OPINION San Francisco is in the midst of a housing affordability crisis. It’s way too expensive to live here, and for those fortunate enough to have housing they can afford, we need to provide stability. This need for housing stability applies to renters as well as homeowners. If we’ve learned anything from the foreclosure crisis, homeowners are not all rich, and they are not all stable in their housing.
Last week’s Guardian argued against legislation I’m co-sponsoring, which provides one-time relief to owners of tenancies-in-common (TICs) — mostly middle- and working-class first-time homeowners who reside in their units — while providing strong protection to renters. While the editorial correctly stressed the need to support rent control, it failed to acknowledge the need to support housing stability for homeowners as well.
Rent control is one of the pillars of our city. It stabilizes housing prices, recognizes that housing isn’t just another commodity, keeps communities intact, and helps maintain San Francisco’s diverse fabric. I’ve long supported rent control, as reflected by my voting record. I supported a series of rent control measures designed to reduce evictions, including requiring sales disclosure of a unit’s eviction history, requiring increased relocation benefits to evicted tenants, outlawing harassment of tenants, and restricting use of the Ellis Act by real-estate speculators. As a member of the Board of Supervisors, I authored successful legislation to ban conversion of rent-controlled units to student dorms and to provide temporary affordable units to renters displaced by disasters.
The current legislation I’m co-sponsoring will provide needed relief to struggling TIC owners, many of whom are experiencing serious financial distress, while protecting the small number of tenants who live in these units. TIC owners have group mortgages, meaning that if one owner defaults, all owners default. They pay double the interest rate other homeowners pay and usually cannot refinance. The legislation will allow them to convert their units to condos and obtain their own mortgages, at lower rates and less foreclosure risk.
While some caricature TIC owners as speculators and wealthy people, that’s untrue. Many TIC owners are quite middle class, former renters who scraped together a down payment to purchase a home. Many are teachers, social workers, public employees, and other workers who are anything but speculators. These are people who, if they didn’t own TICs, would be renting. They aren’t Martians who dropped out of the sky. They’re our neighbors, co-workers, and fellow San Franciscans. They are part of the city’s fabric.
Under the legislation, owner-occupied TICs that are in the condo lottery will be able to convert to condos by paying a fee of $20,000 per unit, with the proceeds dedicated to affordable housing. Buildings with Ellis Act and other problem evictions are typically prohibited from condo converting in San Francisco, under a 2006 law, and that restriction applies to this legislation. In other words, this legislation won’t encourage Ellis Act evictions. Moreover, buildings that aren’t owner-occupied can’t condo convert. Nor can buildings with more than six units. The legislation is one-time in nature and not an ongoing invitation to condo convert.
The legislation covers very few units with tenants — 85% are owner-occupied — and protects this small number of tenants by mandating they receive lifetime leases, with full rent and eviction controls identical to our rent control laws. This protection is stronger than what most tenants receive in buildings that win the condo lottery currently.
Renters and homeowners both deserve housing stability. This legislation moves us in that direction.
Supervisor Scott Wiener represents District 8.