Parkmerced developer says rent control will be protected under new plan, but tenant advocates voice concerns
The landlord's promise of continued rent control is written into a development agreement, a contract between the developer and the city that would be filed along with permits and entitlements for the property. Any subsequent owner would also have to adhere to the terms of the agreement.
Despite those assurances, tenant advocates speaking at the Dec. 9 meeting sounded the alarm that the guarantee could be called into question in court if the developer or a new owner ever sought to challenge it. The Costa-Hawkins Act, passed in 1995, prohibits rent control on newly constructed units, and San Francisco's rent ordinance guarantees rent control only for units built before 1979.
"It is disingenuous for the Parkmerced landlord and for city staff to assure tenants that they will have rent-controlled replacement units after their units are demolished," noted Polly Marshall, a tenant commissioner on the San Francisco Rent Board who spoke as an individual before the Planning Commission. "We simply don't know if this will be the case."
Marshall said the agreement could be susceptible to a legal challenge, given recent court rulings in Los Angeles and Santa Monica finding that the Ellis Act and the Costa-Hawkins Act preempted any contracts brokered with the municipalities. In each case, signed agreements between a developer and a city were dissolved in California courts.
"There's nothing in state law that says that when you demolish rent-controlled housing, it has to be replaced with rent-controlled housing," said Dean Preston, director of Tenants Together, a statewide tenant advocacy group. "I don't think the city or the developer can make those guarantees."
Preston added that the problem would be intensified if the property is conveyed to a new owner who didn't make the same commitments, and acknowledged that he didn't perceive a surefire way to guarantee enforceability. "It's not the developer's fault, and it's not the city's fault," Preston added. "Ultimately this needs to be addressed In Sacramento."
City staff and the developer seemed responsive to the concerns. In comments submitted to commissioners Dec. 9, Marshall said the development agreement should be amended to specify that the developer agreed to waive any rights to challenge the requirements of the agreement. The following week, at the Dec. 16 meeting, planning staff distributed revised copies of the agreement that had been changed to include that language.
During a staff presentation at the Dec. 16 meeting, mayoral development advisor Michael Yarne addressed the rent-control question in a detailed presentation. "The city wants to protect existing tenants," Yarne told commissioners. "It is not the city's intent to leave existing tenants vulnerable."
Under Costa-Hawkins, Yarne said, exceptions to the rent-control prohibition apply in cases where a municipality has made a valuable contribution to a developer for a residential project in exchange for the waiver of rights under Costa-Hawkins.
Yarne ticked off a slew of contributions he believed would pass muster in a court of law as enough to qualify for the exception. Among other perks, maximum density controls for the site would be eliminated; the height and bulk for new buildings would be increased beyond what's normally allowed; the city would not assess impact fees for the replacement units; the amount of permitted commercial mixed-use development for Parkmerced's zoning category would be substantially increased; and the development rights would be frozen for 30 years with no required milestones.
"We believe this satisfies the public-assistance exception," Yarne said. He noted that the document was drafted with feedback from City Attorney Dennis Herrera.
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