Supes flip-flop on condo conversion

CITY HALL — Two San Francisco supervisors seeking to loosen up restrictions on converting Tenancy In Common housing into condominiums withdrew support in committee Monday for a proposal they themselves sponsored, yet two others recommended it and sent it on the full Board of Supervisors.

The City is dealing with what many say is a bottleneck of homeowners who want to convert their TIC residential units into condominiums, thanks to a lottery system that limits these conversions to 200 per year.

To counter this, a proposed ordinance would create a bypass of the lottery that would allow at least 2,000 — and up to perhaps as much as 2,600 TICs — to convert to condominiums in the next dozen years.

Critics, however, say the legislation introduced by Supervisors Mark Farrell and Scott Wiener last year created an opening for real estate speculators to eventually carve up The City’s rental housing stock by taking advantage of the situation.

A chronic problem for The City, several attempts to fix this situation by past Board of Supervisors over the years have failed.

Yet this time, they worked out a compromise but only if all sides stick to the changes proposed last week by Board President David Chiu and Supervisor Norman Yee, with support from Supervisor Jane Kim, which were crafted to address many of the tenants’ concerns.

At the Board of Supervisor’s Land Use and Economic Development Committee Monday, Supervisor Mark Farrell, who authored the legislation and has invested much time and effort into adjusting it to pass the full Board’s vote (including making 40 amendments) announced he was withdrawing his support for his own legislation:

“To be clear, in its current form, this is not anything that I would support and I would be voting against this at the full Board in May. … Inserting a ten-year minimum moratorium into this legislation, to me is not only arbitrary but I think it’s contrary to the spirit of what we’re trying to achieve.”

Farrell said too many restrictions and mandating a minimum moratorium is unworkable and unsustainable.

He said he supports an increase in owner-occupancy requirements in three or four-unit buildings, however, he argued that to mandate three of the four units in a building be owner-occupants is just a backdoor way of excluding four-unit buildings from the lottery, so he won’t support it for that reason as well:

“The way that the legislation reads right now, it’s not something I would support.”

Board President and Land Use committee member David Chiu said:

“I did not support the original version of the legislation that was in front of us. … I certainly appreciate the intent of the legislation to address the plight of TIC owners stuck in very challenging financial situations.”

Chiu said the first version of the legislation created the wrong incentives for future real estate speculation:

“I think that the version that we have in front of us really not only helps to protect our San Francisco renters, but really does, I think, well address the plight of TIC owners who’ve been stuck in a condo-conversion system without creating additional incentives …  At this point I am very supportive of the version we have in front of us.”

Committee member Supervisor Jane Kim said:

“What we have before us is quite an elegant solution. … The goal of this legislation was to really figure out a way to help current TIC owners, not encourage more TIC ownership in the future. … We also want people that actually own and occupy their units. If this really is about encouraging home ownership, we want folks that actually live in those units and not just using it as rental properties themselves, so, I will be supporting this legislation.”

Kim argued though she didn’t like the idea of pitting struggling homeowners against struggling tenants, the very nature of TICs has that effect:

“People have said that this is not about helping one or the other. … But we are creating a system where we are pitting those two groups together, when we allow TICs as an option for home ownership. … I’m happy to support these amendments and send it out with a positive recommendation.”

The co-sponsor of the proposed legislation, Supervisor Scott Wiener, is also the committee chair.

Wiener said many TIC owners are former renters who managed to scrape together a down payment so that they can purchase a home:

“I cannot support the legislation in the form it is today. I am open to changes to the lottery once it resumes again. … We know that the moratorium has to be a minimum of ten years under the current proposal and can be higher than that, depending on how many people participate in the bypass, so the two are linked and I think they should be. … I don’t think that it’s going take a lot to get this into a form where I can support it. I think that there were a lot of good things that were put into this legislation as a result of the amendments last week that I can support.”

Supervisor David Campos also weighed in on the matter, though like Farrell, he is not on the Land Use and Economic Development Committee:

“For many of us who have been fighting this issue for several years, our preference from the very beginning is that no change is made to the existing system. … That said, I do think that the proposal and the compromise that has been put forward by President Chiu and Supervisor Yee, and which has been worked on by many members of this community, is a compromise that truly reflects the very best effort that the community can make to find that middle ground. And I believe that this compromise goes pretty far, in fact, farther than I think many people want it to go, and so I will support that compromise as it’s currently written.”