Leaders from Chinatown Community Development Center (CCDC) and Community Tenants Association (CTA)

“It’s shameful that this ordinance pits San Franciscans against each other when they are all saying that they want to stay here,” said a Community Organizer for Tenderloin Neighborhood Development Corporation (TNDC), Hatty Lee. The City Controller estimates that close to 1,900 units would convert from apartments to condos under this one-time bypass, roughly equivalent to 10 years of annual conversions through the lottery process. The proposed increase of allowable condo conversions would result in an accelerated loss of rent controlled units.

HRSFs Director Sara Shortt said the proposed legislation creates an “incentive for more evictions in the City.” When units are converted into condos they are worth roughly 15 percent more according to the City Controller. If they are sold empty, they are worth even more. “There’s hundreds of thousands of dollars to be made from selling a condo after it was previously a TIC. It raises the property value tremendously. No one can tell me that isn’t part of the incentive in wanting to change this law,” Shortt said.

While many renters empathized with the concerns of TIC owners, they criticized the legislation for targeting them and not the banks. “If you are serious about helping TIC owners who are facing financial or mortgage issues, you would address those directly through those owners and the banks,” said Co-Director of the Council of Community Housing Organizations (CCHO), Fernando Marti. Because the proposed legislation attempts to address the financial hardships of TIC owners by effectively reducing available rental units without any replacement, this ordinance could not help but pit residents against each other.

Supervisor Jane Kim said in her closing remarks, “TIC home ownership is absolutely something we do not want our City to encourage. One thing we can not get enough of is rent control units. That is a depleting stock.” Kim proposed that the legislation could be amended to have a ban on the sale of the units for 5 or 10 years after conversion to ensure that any TIC converted would be lived in by the owner and not flipped for a profit.

Sups. Wiener and Farrell have introduced legislation which will repeal rent control from thousands  of landlord-occupied apartment buildings. Their plan will let these buildings become condominiums automatically, bypassing the condo conversions lottery and tenant protections in the city’s condo conversion law. Under state law, condominiums are exempt from rent control. The legislation is a huge gift to property owners: they will be able to rent out non rent controlled apartments and the condominium form of ownership will increase the value of their property by well over 20%. This gift to landlords comes at a time when tenants are facing record high rents–and landlords are getting record profits and seeing the value of their buildings soar.

At its general membership meeting the Council of Community Housing Organizations unanimously reaffirmed its opposition to amending the Subdivision Code allowing for any expansion of condo conversions of existing TIC units.  The CCHO membership has three reasons for its opposition.

• First, there is no justification for further increasing condominium conversions as there are well in excess of 500 conversions on average a year currently (not just 200 annual conversions as stated in the media).

• Second, as the primary developers of permanently affordable housing in San Francisco, CCHO organizations reject the assertion that a “lottery bypass fee” charged for condo conversions would be either desirable or an effective source of funds for affordable housing development.

• Third, condominium conversions do not address the City’s General Plan Housing Element needs for housing production at all levels of household affordability; the proposal is instead extremely divisive and would simply pit one set of San Franciscans against another without increasing affordable housing opportunities for all.

No Need for More Condominium Conversions

Proponents of the lottery bypass ordinance argue that the nearly 30 year old annual limit on condo conversions is too strict and needs to be raised.  But the facts tell a different story about the volume of conversions.  According to the City Planning Department’s annual “Housing Inventory” report, 5,956 condo conversions were allowed between 2001 and 2011, or an average of 541 condominium conversions a year already under the City’s current system.  Moreover, this is a dramatic increase in the number that occurred in the previous decade of 1990-2000, during which a total of 2,863 condominium conversions occurred.  In other words there has already been a 100% increase in the number of allowable condo conversions over the last two decades. Given these trends, there is no justification for further increasing the number of annual condominium conversions, especially when the City is only able to facilitate construction of perhaps 200-300 units of new affordable housing annually that might arguably “offset” the loss of these converted units. Only if and when the actual production of new affordable housing units was to catch up to replace the loss of existing rent-controlled units (in the past and in the ongoing yearly conversions), could one imagine that this discussion should be re-opened.

Proposal Actually Undercuts Affordable Housing Funding

Sponsors of the condo conversion lottery bypass ordinance have claimed that as much as “$25 million” could be raised for “affordable housing” if the legislation was passed.  Yet, the actual details of the proposal undercut that assertion as the realistic fees are nominal.  Indeed, the passage of the legislation could well reduce overall support and funding of affordable housing.

First, the conversion fee is set at an outlandishly low $20,000 a unit.  By contrast, new condo construction affordable housing “in-lieu” fees are set based upon the actual cost of making a unit affordable to a moderate income household. By creating such an astoundingly low “affordable housing fee” the TIC condo conversion legislation essentially proposes competition with the existing affordable housing in-lieu fee, with the potential of actually creating a cheaper way for developers to do condominium production through conversions than the current emphasis on new construction. It is unclear what public policy is achieved with this requirement—which is in effect a city subsidy for losing condo lottery entrants.  Clearly, little funds would be actually created.  Worse, the legislation sets a fee at a level that takes no account of the actual loss of the previously affordable rental stock that the conversion represents and makes no real attempt to replace that loss.

Condo Conversion Does Not Meet General Plan Housing Element Production Needs, and Divisively Pits San Franciscan Against San Franciscan

For nearly 30 years a limit on condo conversions of existing rental apartments has been in place in San Francisco.  It ensures that the City’s loss of rental housing is at least paced so as to allow development of new affordable rental housing a reasonable attempt to keep up.  Proposals to change that policy by real estate interests were defeated at the ballot and at the Board of Supervisors. The proposed legislation to allow TICs to be transformed to condos simply ignores the City’s General Plan Housing Element policies and is inconsistent with them.  The major emphasis of the 2009 Housing Element has been to address the City’s housing affordability challenge.  An important part of meeting that challenge is the preservation of the “affordability of the existing housing stock.”  Throughout the Housing Element emphasis is placed on preserving rental housing opportunities as a key strategy in meeting the City’s ongoing affordability challenge.  And while the Housing Element does recognize condominiums as a housing opportunity type in San Francisco it places emphasis on limited equity ownership as the best way to preserve affordability if rental homes are allowed to be converted to ownership. The ordinance sponsors claim that “This is creating an opportunity to assist TIC owners who are in dire financial straits, to help them keep their homes…”.  But this narrow objective for a small group of owners fails to recognize that all Tenancies-in-Common were once the homes of tenants in those buildings, displaced to create the TIC in the first place with nothing being done to “help keep” those existing residents in their homes.  This is the fundamental flaw in an approach to “homeownership opportunities” that simply replaces one set of San Franciscans’ housing (existing renters) for another set of San Franciscans (TIC buyers) while not increasing the City’s housing supply by a single unit. And if the proposed legislation was indeed focused on assisting TIC homeowners, it could have provided disincentives toward speculation by for example prohibiting any receivers of the condo lottery bypass from re-selling within a minimum number of years after conversion to a condominium. Current policy regarding condo conversions is being applied very rationally to TIC owners, allowing them to eventually convert years after the actual TIC formation, and thus ensures a patient pace in this process of converting rental housing stock (even though the pace of new affordable housing production has yet to catch up to this loss).  This condo conversion lottery bypass proposal undermines the city’s production goals by cannibalizing one kind of housing (rent controlled affordable housing) for another, rather than incentivizing production of new housing.

PDF here: SanFranAffHsing

From Urban Renewal and Displacement to Economic Inclusion: San Francisco Affordable Housing Policy 1978-2012, by Marcia Rosen and Wendy Sullivan (November 2012)

Competing with Giants Day, San Francisco housing director Olson Lee presents CCHO staff and TNDC’s Mara Blitzer with a Certificate of Honor commending us for San Francisco’s first Affordable Housing Day!

Investment Result of Voter-Approved Housing Trust Fund, Proposition C

San Francisco, CA—Mayor Edwin M. Lee today announced the first funding commitments for affordable housing and down payment assistance funded through the Housing Trust Fund, passed by San Francisco voters in November. The Housing Trust Fund provides a permanent source of revenue to fund the creation of affordable housing for low and middle income households for the next 30 years.

“A growing and vibrant economy requires a diverse supply of new housing,” said Mayor Lee. “San Francisco voters know that creating a permanent source of revenue to fund housing production will allow San Francisco to remain a viable place to live and work for people at all levels of the economic spectrum. And, a down payment assistance program will help keep families in our City and support a diverse workforce.”

The first affordable housing project funded from the Housing Trust Fund is the long-stalled 55 Laguna Senior Housing project located on the former University of California Berkeley Extension campus in the Hayes Valley neighborhood. The project is funded by the Mayor’s Office of Housing (MOH) at $6.1 million and is a joint-venture of Mercy Housing California and Openhouse. It will create 110 units of affordable housing for low income seniors. The project has been on hold for eight years due to the downturn in the economy and a lack of local resources.

“We are very excited that the City has been able to commit the funding to this important project to allow us to move toward start of construction in the summer,” said Mercy Housing California President Douglas Shoemaker. “It’s an honor to be the first affordable housing project funded with revenue from the Housing Trust Fund.”

This announcement comes on the heels of a number of important affordable housing milestones, including:

• Soon to be completed Kelly Cullen Community – 172 new SRO units of housing for the formerly homeless in the historic Central YMCA building at 220 Golden Gate Avenue, that will also house a new Integrated Health and Homeless Clinic run by the Department of Public Health;
• Soon to be completed Veterans Commons at 150 Otis – 76 new SRO units in a historic City-landmarked building that will serve homeless U.S. veterans with support services including case management, mental health counseling, drug dependency, and employment programs will be provided by the City’s Human Services Agency, the Veterans Administration, and Swords to Plowshares; and
• Bond closing for Candlestick Heights – located in the Bayview, Candlestick Heights, the project will provide 196 units of affordable housing, constructed entirely without City subsidy.

Additionally, Mayor Lee announced an increase to assistance limits under the City’s Downpayment Assistance Loan Program (DALP). DALP provides financial assistance to qualifying first-time homebuyers through deferred payment loans that are repaid to the City. Earlier this year, the maximum amount of the loan was reduced to $70,000 per household due to lack of funding. With the passage of Proposition C, the limits have been returned to their original levels of $100,000 per household.

The Housing Trust Fund begins with a general fund revenue capture in year one of $20 million and increase to $50 million over time. It is estimated that $1.5 billion will be invested in affordable housing production and housing programs over the next 30 years. The Housing Trust Fund will:

• Develop more than 9,000 units of permanently affordable housing for residents whose average median income (AMI) is 60 percent or below;
• Create incentives for onsite below market rate housing and make housing more accessible for moderate income families;
• Invest at least $15 million over the first five years to expand the City’s down payment assistance program (DALP) which provides interest-free loans to moderate income homebuyers who are looking to purchase their first home in San Francisco. DALP will also include a new program to assist the City’s first responders in the purchase of a home in San Francisco;
• Create a Housing Stabilization Program to help distressed low and moderate income residents remain in their homes; and
• Create a Complete Neighborhoods Infrastructure Grant program to fund public realm improvements such as “pocket” parks and child care facilities for growing neighborhoods.

The Housing Trust Fund will capture revenue from former Redevelopment Agency (RDA) Tax Increment, a small portion of Hotel Tax that has been appropriated yearly for affordable housing, plus an additional $13 million in new General Fund revenue from an increase in business license fees. The consensus business tax reform measure, Proposition E, which also passed on the November ballot, will generate $28.5 million in the first year – $13 million of which will go to fund affordable and workforce housing.

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“I’m worried about how the community’s fabric of San Francisco is changing, and wanting to do more than just voice concerns about it,” [Anthony Williams] said. “I want to get people really thinking of what type of community they want to live in.”

Join us this Friday!

Get connected, get smart and start up a sustainable community!

“Text-A-City: Start Ups for Sustainable Communities” is a night of interactive art and lively conversation designed to raise awareness about affordable housing solutions in San Francisco.

The interactive art will invite the public to send text messages expressing their wishes for sustainable living to be projected onto the outdoor wall of A Temporary Offering (ATO) at Market and & 7th Streets in San Francisco’s MidMarket neighborhood. Featured artist: Paul Notzold, TXTual Healing.

Inside ATO, short panel discussions on a variety of affordable housing opportunities and innovations will promote entrepreneurship, advocacy and community-building in regard to providing affordable housing for all people in our diverse and vibrant city. Topics will include urban sustainability, mixed-income housing and collective entrepreneurship. Moderator: Kevin O’Malley, Tech Talk / Studio, and the Business and Leadership Forum of the Commonwealth Club. Panelists (list in formation): Peter Cohen, San Francisco, Council of Community Housing Organizations; Carla Mays, Social Innovators and Investors Resource; Sam Tepperman-Gelfant, Public Advocates; Tracy Parent, San Francisco Community Land Trust. Invited Participants: Jenna Sampson, Twitter; Oscar Grande, PODER; Majora Carter, Majora Carter Group; Raines Cohen, Co-Housing California; Dan Murphy, Urban Green DevCo; David Baker Architects; SPUR.

“Text-A-City” happens December 7th, from 7:00 to 10:00 pm at A Temporary Offering, 1106 Market Street @ 7th Street in San Francisco.

This is a flash mob benefit for the San Francisco Council on Community Housing Organizations. Donations are sliding scale $5 to $15, with no one turned away for lack of funds.

Live music + cash bar + popup food on hand!

RSVP @ http://text-a-city.eventbrite.com.

This event is presented by swap/meet in association with artists Anthony Julius Williams and Dan Bouthot.

We are really proud of what we accomplished together on the campaign, walking over 300 precincts (many of those twice!) and mobilizing hundreds of building tenants and grassroots members. We won with an overwhelming 65% of the vote, and put San Francisco on the map, again, as a national leader in affordable housing, making us the first city in California with a permanent local source, and committed our city to the long-term development of affordable and supportive housing in the post-Redevelopment era.

Our success depended on a wide network of progressive allies, the Human Services Network, the Coalition on Homelessness, SF Rising, Coleman, Causa Justa::Just Cause, Jobs with Justice, the Progressive Revenue Coalition, ACCE, and others, with whom we will need to continue to build over the coming years. Our victory for a local permanent source for affordable housing is also testament to the legacy of many years of hard work by Calvin Welch and Rene Cazenave. Proposition C’s success lays the foundation for further policy wins into the future, the ongoing tasks of working to create a city of opportunity, equity, and diversity.

Even as we celebrate, we must not forget the other side: 35% of our city voted against affordable housing. We have a long road still ahead, building new relationships and alignments with a changed Board of Supervisors, making new friends with neighborhoods and communities, weathering the uncertainty of a still-shaky economy, navigating a long list of game-changing land use and policy proposals coming at us, and the fundamentally important work of building a movement with our progressive allies.

To victory! And the struggle continues!

Celebrate a successful campaign with the PODER DJ crew, live election results, light food and excellent cocktails (cash only).

RIO GRANDE BAR, 1108 MARKET ST.