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:

-Norman – phone: 415-554-6516
-David – phone: 415-554-7450

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!



5 Responses to “Condo Bypass – Update 4/22”

  1. Bryan says:

    I am a TIC owner and have actively supported the Farrell/Weiner legislation for months. These new changes are not ideal, but who are we kidding — this is still a big win for TIC owners. I would have preferred the original drafting, but this compromise still puts my neighbors and I on the path to conversion.

    I feel bad for the people who bought TIC’s in the last year, but they would have to wait at least ten years anyhow, given the huge backlog of lottery participants.

    It’s sad that Plan C and the two supervisors who have fought so hard to help TIC owners are not supporting this. I feel like they are more concerned with ‘winning’ the political battle and aiding Realtors than they are with the fate of us long-standing TIC owners. We have waited over ten years for this moment, let’s cross the finish line on May 7th.

  2. Cole Ryan says:

    Thanks again to plan C for making sense out of a complicated situation.

    No free lunch for us TIC owners wanting to get a good loan and be secure in our homes.

    I support the common sense approach plan C has taken on the amendments as a above.

    Cole Ryan

  3. Brendan Quinn says:

    When are we expecting the vote?

  4. Insiya says:


    I am a TIC owner and thank you for continuing to push this issue.
    As I understand the opposition claims that more TIC conversions affects renters and leads to evictions. There are ~2500 TIC units. How many are occupied by rentens who might be affected vs owner occupied TICS? Is that information published?

  5. Lizbeth Gordon says:

    Hi Plan C.

    Please call me to discuss this.

    Of HUGE concern, and something you haven’t mentioned is the following:

    Section 6 of the legislation says that the expedited conversion program set forth in Section 1396.4 is suspended if there is litigation; however, in the event of litigation, the legislation does not say that its suspension of the lottery, described in Section 1396.5 is also then revoked. That means TIC owners could end up with no bypass AND no lottery — a real disaster. You know there will be litigation.

    Aother important point:
    All significant changes of law need to be done with proper roll out to the public and prospective buyers — so that they really know what they are buying into. Whatever program is arrived at needs time built in for property real estate disclosures to be prepared and come into common useage.

    5 and 6 unit buildings should not be barred from conversion. DPW tracking system reports only 333 units in such buildings seeking conversion (whereas, there are 4,686 units in 2 unit buildings). 5 and 6 unit buildings are NOT removing significant numbers of rental housing units from the market. They are not the problem, and should not be targeted, especially for those owners who bought them when the law provided a path to conversion.

    Finally, why are you telling everyone to write Supervisors Yee and Chiu when truly the two Supervisors whose votes will be key and who are still on the fence about which side they will support in this show down are Supervisors Cohen and Breed. Focus needs to go there!!!!

    415 505 9468

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