A proposal to make a one-time allowance to San Francisco's condominium conversion regulation has finally made headlines, although home-ownership advocates and renter's advocates alike have known about it for months.
Brought forth by city Superviors Alioto-Pier and Dufty, the proposal would move hundreds of Tenancy-in Commons (TICs) through the condo conversion pipeline. As it currently stands, city regulation allows only 200 combined TIC-to-condo and apartment-to-condo conversions a year, allocated via an annual curved lottery (those buildings that have previously applied for the lottery and failed gain more priority to entry in forth-coming years).
Sunday's Chronicle has an article that is sure to fire up both sides of the dispute, pro-homeownership and pro-renter. But here's a quick breakdown of what the new proposal would do:
1. In a one-time deal, 2-6 unit TIC buildings that are 100% owned and occupied by TIC owners would bypass the condo conversion lottery and move immediately to the process of conversion. The TIC buildings in question would still have to meet all other requirements of conversion legislation, such as period of ownership, to be eligible.
2. Renters would not be displaced or evicted due to the passing of this proposal. That does not guarantee, however, that some TIC owners who rent out units will not assume a future proposal of a similar sort, and then act in anticipation of it. I don't agree with this tactic, I am just sharing the pro-renter concerns in regard to this "renter safeguard."
3. Once the conversion of some 370 TICs is completed, it will be a boon to the City's tightly-belted coffers, as it will mean a significant amount of funding from home purchase transfer taxes. Condominiums, more desirable than TICs due to the reduced risk of a single rather than combined mortgage, will prompt ownership turnover.
4. The 23 year-old condominium conversion legislation would resume its normal shape and scope immediately after the new proposal is passed.
So far, the remaining Supervisors are keeping quiet about which direction they are leaning. While 67% of San Francisco residents are renters, it is difficult to know what percentage of them are hoping this initiative will enable them to become homeowners. Going against the desires of one's constituents on this one could mean the end of a career. But then again, going the wrong direction for future shape of San Francisco could reap years of further housing frustration.
Have more questions about trends in the housing market? Questions about selling or buying a home? Contact me today for honest, experienced answers.
Amy Blakeley, Realtor®
ablakeley at mcguire.com
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