Condo Bypass – Update 4/22
On April 15, 2013 Supervisors David Chiu and Norman Yee made amendments to the condo lottery bypass legislation first introduced by Supervisors Farrell and Wiener. Plan C does not support the legislation as currently amended. We believe taken in combination, the amended legislation penalizes both current and future TIC owners and creates a number of unintended consequences, especially for those TIC owners that purchased their TICs within the last year (after 4/12/12). We believe no Supervisor should support legislation that penalizes TIC owners retroactively. Our organization, however, continues to press for and work towards a compromise solution that will help the greatest number TIC owners who seek to achieve housing stability in San Francisco.
The following items address the Chiu and Yee amendments that are of greatest concern:
1) Restore the current 3-year owner occupancy eligibility period for bypass applicants in years 3-6 of the bypass program.
- The amended legislation as currently drafted changes the rules mid-game and retroactively penalizes TIC owners who established their TICs after 4/15/12. These TICs will not be able to avail themselves to the bypass and will become subject to the moratorium/suspension of the lottery. Individuals in these buildings bought with the assumption that they could at least qualify for the lottery within a 3-year period. Even worse, 5-6 unit buildings established during this period would never be able to convert as following the suspension/moratorium of the lottery, these buildings are ineligible for future lotteries.
2) Remove the 10-year minimum lottery suspension/moratorium.
- The bypass program suspends the lottery for six years while existing TICs avail themselves to the program. Given some of the opposition to the lifetime leases and bypass fees in the original legislation, and now given the amount of opposition from many TIC owners to the legislation as amended – there is legitimate concern that far fewer TIC owners would take advantage of the bypass than originally contemplated. Determining the length of the suspension based upon the “divide by 200″ formula at least has a basis in current policy. Setting a minimum or maximum suspension beyond the duration of the bypass program is arbitrary.
3) Reduce owner-occupancy requirements in 4-unit buildings from three to two.
- Increasing the owner occupancy requirements from a single owner occupant to three owner occupants for 4-unit buildings is a back-handed way of eliminating 4-unit buildings from the ability to convert to condominium status in the future. A 100% increase from a single owner occupant to two owner occupants in both 3 and 4 unit buildings represents in itself a huge compromise and will make it significantly more difficult for these TIC buildings to qualify for the lottery following its suspension.
4) Reduce threshold to allow one OMI or other legally mandated eviction, while maintaining prohibition on “bad behavior” evictions:
- As currently drafted as single Owner Move-In (OMI) eviction would disqualify a building from participating in a future condo lottery. OMI situations arise due to family circumstances / not bad behavior on the part of developers, and owners are required to remain in their properties for 3 years. They do not arise frequently, but this legislation would unfairly penalize property owners.
On April 22, 2013 the Board of Supervisors Land-Use Committee passed by a 2-1 vote (Supervisor Chiu and Kim were for, Supervisor Wiener voted against) the amended legislation with a recommendation for approval to the full Board of Supervisors. The legislation is scheduled to come before the full board of Supervisors on Tuesday, May 7, 2013.
Rest assured Plan C along with other home-ownership advocates are working to have changes made to the legislation so that current TIC owners are not penalized retroactively and that the TIC-to-Condo path to home ownership remains an option for renters, first-time buyers, and middle income San Franciscans. But we continue to need your help!
We urgently TIC owners that are “squeezed out” by the amended legislation, and all other supporters of the bypass to contact the following Supervisors:
Please tell them that legislation as amended does not represent a fair compromise. Tell them how the legislation as currently drafted affects you. Ask them to support changes to the amendments so that current TIC owners are not penalized retroactively, and future TIC owners are not adversely affected.
We continue to believe that a compromise can be had that will help those current TIC owners who are willing and able to join a bypass, without hurting others (current and future) who are unable to participate in or afford the condo bypass. The support of the supervisors identified above are the key to achieving that compromise.
Please take action now!