No sympathy for TICs


Got a fascinating letter from a local lawyer named Richard Hurlburt, who has some thoughts on the TIC-condo conversion legislation sponsored by Sups. Scott Wiener and Mark Farrell. He writes:

I’m a tenant’s rights lawyer and real estate broker. Whenever possible I help tenants facing eviction buy their TIC units. I also own and reside in a TIC unit. My building has twelve units and would not be affected by the proposed law.

I just read the actual text of the legislation sponsored by Sups. Farrell & Wiener and I’m against it.

TIC financing isn’t that difficult anymore. Fractional loans are the norm and not that much more expensive than condominium loans. It does cost a little more to finance a TIC, but the units cost less to begin with. So I don’t really see a hardship on the part of TIC owners who generally have smaller mortgages because they paid less for their units to start with.

The supposed $20,000 per unit condo conversion impact fee to benefit low-income housing is largely illusory. The proposed law contains a reduction for each year the building has participated in the lottery, so a building that participated in the lottery for five years, which is the majority, would get an 80% reduction and pay only $4,000.

Although the law would provide lifetime leases for the few tenants occupying converted units, this benefit is seriously disproportionate. For the tenants getting lifetime leases, good for them but that is a huge windfall for a very few lucky individuals. For tenants generally the legislation is actually quite bad. Once any of the affected units becomes vacant, all future tenants would be exempt from the rent increase protections of the Rent Ordinance. And allowing certain owners to bypass the condo lottery will only encourage more Ellis-TIC conversions.



He's essentially advocating class warfare between owners and renters, and so isn't even willing to support something that will help owners and have ZERO EFFECT on any one else.

Posted by Guest on Feb. 12, 2013 @ 9:51 am

even if I can see beyond my own tribal affiliations. Who doesn't?

Class warfare is a reality of human existence in every society. Why did you leave out social engineering this time?


Posted by Eddie on Feb. 12, 2013 @ 10:09 am

takes place on a building that has nothing to do with you.

In fact, even if that were a building you had previously been evicted from, it makes no difference to you now if it converts. It might be understandable if you resent those owners getting a deal, but that is hardly a noble or rational sentiment.

Posted by Guest on Feb. 12, 2013 @ 10:35 am

the results that will follow the supposed one time scrapping of the condo conversion lottery.

I harbor no ill will towards the people who purchased our former apartment as a TIC. My attitude would change if they tried to rent out the unit in violation of the Ellis Act, although I haven't spent a moment investigating that possibility. I believe that the owner of one of the other units in the building did rent out his unit in violation of the Ellis Act, according to the tenant evicted from that unit.

Our former landlord used his property rights and the law to evict us legally. We moved on to another place. Lucky for us, at that time, finding an affordable place was difficult, but still possible. Now, no way. We were close to broadening our search to Oakland when we found our present home.

Posted by Eddie on Feb. 12, 2013 @ 10:56 am

violation of the Ellis Act, then that is a no-no. But nobody is suggesting that here and, indeed, it would be fairly silly for a TIC owner to re-rent their unit even after the Ellis restrictions lapse (5 to 10 years) because it goes right back into rent control. Few TIC's are re-rented.

By your own admission, you have an Oakland budget but you want a SF-lifestyle. Given how close Oakland is, do you really think it is a legitimate public policy for SF that your rent be artificially cheap, just so you don't have to live a few miles away in a city with lots of stuff going on, and with excellent transit into SF?

I can see why you want a cheap place. Who wouldn't? I just don't see why anyone else owes you that.

Posted by Guest on Feb. 12, 2013 @ 11:18 am

We don't owe anything to anyone. In fact, neither of us has any debt.

You have the posting habits of someone who might share some interesting commentary without the necessary intellect nor content.

Apologies to BeckyBayside, but you are an A-1 asshole.

Posted by Eddie on Feb. 12, 2013 @ 2:31 pm

Otherwise, by your own admission, you'd be in Oakland

Posted by Guest on Feb. 12, 2013 @ 3:26 pm

If rent control were so burdensome to the property owner, why hasn't he raised the rent the last two years as he is entitled under rent control?

I don't question your housing situation. Keep your shit covered nose out of mine.

Posted by Eddie on Feb. 12, 2013 @ 3:40 pm


Posted by Guest on Feb. 13, 2013 @ 6:52 am

Eddy darling, you know, there is nothing about living in Oakland, or any other place that you or anyone else can afford. I would love to Paris, but I can't afford it. I would love to live in Pacific Heights, but I can't afford it.
Spell that word, slowly, until you truly digest it: a.f.f.o.r.d.
If you can't afford it, don't make someone else pay for you. That is called PERSONAL RESPONSIBILITY.

Posted by Guest on Mar. 27, 2013 @ 8:53 am

Most San Franciscans are smart enough to look beyond tomorrow. After this massive condo conversion of the city's most valuable housing stock - homes that have been providing millions of once and current SF tenants decades of financial security - there will be hundreds of new TICs created, with relators telling prospective buyers, "The City just converted 2,000 TIC units to condos, which means the supervisiors may do the same thing in a few years since this would be only fair. You better buy a newly formed TIC now or forever lose out on your chance for a San Francisco piece of real esate before all of your co-workers and non-resident investors price you out of the market."

I'm glad many people are standing up to the city to prevent this massive condo conversion that quickly will be followed by more Ellis Act and other tenant evictions, leading to the continual disgorgement of current residents from San Francisco.

At a minimum the city should prohibit landlords from any future non-"just cause" evictions. A city that cares about its residents shouldn't follow state laws like the Ellis Act anyway. Let the City Attorney fight the law to the CA Supreme Court, arguing that the city DOES have the land use power and police power to prevent evictions other than those "for cause" (non-payment of rent, nuisance, etc.), regardless of what the majority Democrats in the state legislature say. Protecting residents from the ravages of real estate speculation is a valid use of a city's power, and the state can't infringe on that power no matter how many tenant hating laws the state legislature passes. The city should be fighting to protect its current residents, not enabling speculators to toss SF residents out on the street because their current rent-controlled apartment is worth a few hundred thousand dollars more as a TIC and later as a condo.

It's arrorgant of supervisors and past mayors to think the city's valuable rent controlled housing stock is just some bone they can throw to the powerful real estate industry, instead of protecting it for millions of FUTURE residents who will get the pleasure of living in the city for a period of time under the financial security of rent control. It's no less than the financial rape of future residents who will pay an ever greater portion of their limited income on rent increases when the converted units make it back onto the rental market. That means less money spent by tenants in the community, and less money for their medical, education and other life expenses. It's terrible economic policy for future tenants and for the local businesses that will also suffer from the reduction in disposible income, and it's terrible social policy that will encourage even more evictions of current residents.

The Wiener legislation allows a short term gain for the lucky ones who make big money converting the apartment to a condo, and makes big money for the lawyers and converters who make the deals happen. It's classic mainstream Democratic Party politics that pervade state laws - screw over tenants and middle income working people, while enriching real estate speculators and their banker and real estate industry backers.

Posted by Guest on Feb. 12, 2013 @ 11:24 am

cost us a fortune in legal bills. You have to work with the laws we have.

RC units are vanishing for many reasons, and of course no new ones can be created. It's a dwindling pool. This one-time only bill will make little difference because few if any of them will be re-rented anyway.

Rental units are vanishing because they are not economic to run. If you really cared about evictions, you'd argue to get rid of rent control because, without that, there would be no ellis evictions.

And again, for the 99th time, Ellis'ed buildings cannot be condo converted anyway, so that is a red herring. Most condo's are created thru natural turnover.

Posted by Guest on Feb. 12, 2013 @ 11:57 am

Home ownership is a fundamental middle class value. SF must secure existing home owners and foster more ownership opportunities.

Posted by Guest on Feb. 12, 2013 @ 12:15 pm

exclusively those who know they don't have the means to own homes, and so want nobody else to have them either.

Posted by Guest on Feb. 12, 2013 @ 12:25 pm

this. Most TIC's that are eligible for condo conversion were not formed as a result of evictions. For instance, the three buildings i have converted from rentals to TIC's or condo's were, in each case, formed by natural turnover (with the exception of one OMI)

Minimal impact on you or anyone.

Posted by Guest on Feb. 12, 2013 @ 9:53 am

Read and do your research before giving more ill-informed comments. Nobody could convert any building to TIC by ellis evicting their tenants, because then the building will not qualify for condo conversion.

You must have gotten your info from SF Tenants Union. This is America, not communist china. When you rent, you rent, which means one day you will have to leave your rented apartment if the owner decides to move in or sell.

Someone I know rent this huge 3-bedroom for $700/month many years ago. She now lives there only one weekend a month since she has houses all over the bay area that she rents out. She got roommates who pay that $700, so basically she is living in SF for free, at the expense of her poor landlord.
I know a few other people who are doing the same thing. Tell me now, how is that fair??

Posted by Guest on Mar. 27, 2013 @ 8:33 am

Of course they have a more serious illness! They're all in the same hospital ward with lap top at their side. I heard from a reliable source they got a group rate. But it's comforting to know they'll all be gone by 9pm because that's when the lights are turned off in the ward. Although occasionally, one or two of them get on here after 9pm (the ward thinks they're googling their new enhanced drug therapy, but instead they're on here).

International Troll Society Member #12360969212

Posted by International Troll Society Member #12360969212 on Feb. 11, 2013 @ 6:03 pm

I can tell you're very angry. Why so angry and nasty, pleb? You're demonstrating very clear amateur/imposter troll characteristics. Calm down. Go take a walk. Chill out. Get some fresh out. Walk by some apartment buildings and feel the aura of all the renters in there. Can you do any of that? But then again if you prefer to have an aneurysm that you're choice, pleb.

International Troll Society Member #12360969212

Posted by International Troll Society Member #12360969212 on Feb. 11, 2013 @ 5:55 pm

I'm sitting here in my million dollar home overlooking the Bay that is mostly paid off. While you're sitting in your craphole rent-controlled flat in the Mission waiting for Mr. Ellis to come and kick your loser ass out into the street.

Posted by Guest on Feb. 11, 2013 @ 6:16 pm

Well I got a reaction from you, didn't I pleb!

Pleb, I don't live in the Mission although I'd like to as it's a very nice neighborhood. One of my favourite. I would point out that it's specifically against International Troll Society guidelines to be anti-ethnic and that's clearly what I sense from you, pleb. Not good. Why are too many pretentious and elitist people like that? That says more than I want to know about you, pleb.

It's not just pretentious alleged homeowners like yourself who have a view of the Bay, pleb, assuming you even do. I suspect it's one of your elitist fantasies that you have this [spoken with nose in air] "million dollar home with a view of the Bay." Aside from your fantasies, many tenants do have a view of the Bay for real especially in the Upper Market and Diamond Heights areas. It sounds like you don't know that which makes me highly suspect that you don't even live here so none of this should concern you, pleb.

International Troll Society Member #12360969212

Posted by International Troll Society Member #12360969212 on Feb. 11, 2013 @ 6:58 pm

Despite their trolling rhetoric to the contrary, I detect a lot of envy of tenants from the (elitist) homeowners. They wish all they had to do was pay rent. It's finally hit them how foolish their so-called "investment" (buying that home they had to have!) was/is and that they were so stupid to saddle themselves with this huge mortgage and all of the many expenses that go along with that and now they're angry and resentful about it. No one forced them to buy that home they talked themselves into with their delusional dreams of "how my life will change" for the better. They are the ones who chose to buy the home and now they're whining about tenants and home ownership expenses. Now they're envious of tenants. I used to own a home here but sold it as I saw what was coming.

International Troll Society Member #12360969212

Posted by International Troll Society Member #12360969212 on Feb. 11, 2013 @ 5:48 pm

what I paid for it, and that my monthly nut goes to pay off the loan rather than to pay for somebody else's new car or boat.

It's intolerable.

Posted by Guest on Feb. 11, 2013 @ 5:57 pm

I particularly envy those that pay rent to out-of-state, corporate landowners.

Posted by Guest on Feb. 11, 2013 @ 6:08 pm

condo conversions and not conversion to TIC. OMI evictions or buyouts under threat of Ellis Act eviction empty rent controlled apartments to facilitate conversion to TIC and then on to condo.

Read my comment more closely as it has nothing to do with jealousy or compassion. I want to see the preservation of the existing rent controlled inventory, and this lottery bypass gives greater incentive to convert this resource to more expensive uses at the expense of the existing residents.

These conversions do not create any new units of housing. Once the rent controlled units are gone, they are gone forever. Any replacement (below market rentals in new developments) require public subsidy.

Did you buy a condo or a TIC? Your comment is ambiguous.

Posted by Eddie on Feb. 11, 2013 @ 5:27 pm

anyone who might hope for this to be repeated. It simply clears out a queue that has become unwieldly and provides millions in revenues for the city. Nobody loses.

I have owned TIC's, condo's, SFH's and entire rental buildings in the past.

Posted by Guest on Feb. 11, 2013 @ 6:24 pm

These conversions provide housing stability to those that currently live in them. Just as RC provides stability to those that choose to remain in their units. The fact that you with a straight face can put the interests of some hypothetical future renter ahead of a real person that wants to remain in this city speaks for itself. You make all kinds of assumptions about these TIC owners immediately selling and the unit no longer being rent controlled. You haven't addressed the reality of TIC owners that have every intent of staying in this city. You suggest it creates a windfall for them, yet if they have not intention of selling all your arguments fall away. I challenge you to offer some reasonable thoughts on those that currently live in their TIC units, intend to stay, but are either underwater, unable to refinance, paying more that they afford because their interest only loan reset, have incredible fear of future interest rate increases as their loans are variable.

Other than a middle finger, what do you suggest these people do. Are they not worthy of housing stability? Why must you deny the reality of that these individuals face, why now that you have yours (a cozy RC apartment that offers you stability) must you deny another the same stability in the unit in which they occupy?

Posted by Guest on Feb. 12, 2013 @ 3:00 pm

you knew the condo conversion rules when you bought into your TIC. Why is it less affordable to you now than when you bought it? Did a real estate broker sell you a bill of goods? Did you count on appreciation or refinancing that couldn't or didn't happen? Are you seeking a larger profit from a future sale? Is a forced business relationship with your co-owners of the TIC not all that you expected? How does continuing to live in a TIC fail to provide housing stability?

The proponents of the "one-time" condo conversion lottery bypass ignore the new incentives that bypass will create to convert rent-controlled apartments into TICs, and the economic, legal and extralegal (landlord harassment) pressures that places on the current tenants of those apartments.

Posted by Eddie on Feb. 12, 2013 @ 3:35 pm

so why do you want the rules changed about Ellis now?

Posted by Guest on Feb. 12, 2013 @ 3:48 pm

You are just deflecting by bringing up irrelevant points. Who's talking about changing the Ellis Act in this discussion?

Posted by Eddie on Feb. 12, 2013 @ 4:03 pm

those TIC buyers "knew the rules when they bought" and so should not ask for them to be changed.

But you have argued in the past for the rules about Ellis to be changed, even though you also "knew those rules when you rented".

You're arguing for nothing to ever change or get better, because everyone "knew the rules". Why then even have a givernment? Let's just leave everything the same and never change anything.

Posted by Guest on Feb. 12, 2013 @ 4:09 pm

for facts. Unfortunately, most of the actions of governments at all levels benefit people higher up on the socio-economic scale at the expense of those below them. Government is a player, not the referee, in the game of class warfare. Cases in point, the Ellis Act and this proposed condo conversion lottery bypass.

Gloating about people losing their homes because of Ellis Act evictions is unbecoming. I expect nothing less from you.

Posted by Eddie on Feb. 12, 2013 @ 5:17 pm

should not be changed because renters like you "knew the rules" when you agreed to take a rental?

I hope you have a good memory because I will call you out on that if you ever propose a change to the Ellis Act or claim it is unjust. Hey, you knew the rules going in.

Posted by Guest on Feb. 12, 2013 @ 5:33 pm

Well pleb, I don't mean to embarrass you in front of all of these people but your post is almost a cut and paste from one of the sample posts we were given as an example of an imposter/amateur troll at our International Troll Society Convention last Fall in Topeka.

Your post is almost an exact replica of one in our Ethics Guidelines which says, "Do not Do." On top of that, your first word, "wow" is especially indicative of an amateur troll. It's remedial and predictable. So many amateur trolls begin trolling with the word "wow" for a smug effect. Not good, I'm sorry to say. I don't think you're cut out for this to tell you the truth.

As for grading, The International Troll Society would grade that post at about a minus 3 (-3). It's really no better than that because it's so typical of an amateur/imposter troll. You might want to seek out some new material. Or better yet, you might want to pursue another field, because I'm sorry to say you're just not cutting it as a legitimate troll, pleb. Hope this helps.

International Troll Society Member #12360969212

Posted by International Troll Society Member #12360969212 on Feb. 11, 2013 @ 4:46 pm

Unlike you, they actually did something with their lives. No wonder you hate them.

Posted by Guest on Feb. 11, 2013 @ 5:14 pm

We should be honest that a lot of the criticism comes from people who know they cannot get into the housing market and they're angry because, deep down, they would like to be homeowners as well. And who really blames them? Being a renter here in SF would suck - constantly at the mercy of landlords and dependent upon arcane rulings of the rent board. It wouldn't be fun. I'm so glad I was able to buy a home here and not have to rent. Renting is something you get tired of around age 29.

Posted by Lucretia Snapples on Feb. 11, 2013 @ 5:28 pm

My post at 4:46 pm also applies to this inferior post. You must try harder, pleb.

International Troll Society Member #12360969212

Posted by International Troll Society Member #12360969212 on Feb. 11, 2013 @ 5:33 pm

Envy is a very poor basis for public policy.

Posted by Lucretia Snapples on Feb. 11, 2013 @ 8:11 pm

I agree. How dare these plebs try to own a home in SF?

Posted by Guest on Feb. 11, 2013 @ 5:11 pm

tenants who made an effort and pulled themselves out of rent control hell. They'd prefer everyone to be down in the gutter with them.

And when they get Ellis'ed, as they eventually will, they will have nowhere to go. Except maybe Stockton.

Posted by Guest on Feb. 11, 2013 @ 5:46 pm

Before I write my comment I am offering my TIC story to this newspaper if you are willing to portray a more human and humble nature of most of the TIC owners that I met at the last hearing. It is a story of real people, families with day to day struggles who would benefit greatly from passing the condo bypass legislation. Please contact me directly if you wish to write a story about my family and why we decided to buy a TIC in 2007. If you consider yourself an unbiased journalist please contact me at the email address provided.

Otherwise, I am not sure what this article was supposed to communicate as this person clearly does not want to lose his TIC clients if they condo convert. Saying that most of the units are in the 5th year lottery is ludicrous and he falsifies information to prevent SF middle class families including my own from being able to qualify for a lower interest loan. Condo loans are offered by more than a dozen banks at low interest rates vs just 1 bank offering a fractional AMR loan (3, 5 and 7 years). We have 2 kids and have lost lottery 3 times thus far. I urge the city of SF supervisors to strongly consider passing the condo bypass legislation as it is a WIN, WIN, WIN for everybody. City of SF would benefit from this as it will be able to build more affordable homes. TIC units are mostly owner-occupied and there would be no loss of rental property. Also the number of units that would condo convert is peanuts compared to >300,000 rental units in the City. Also, let's not forget that those few renters living in TIC units will be rent-protected for life which is great!

I also urge the TIC community to stay away from Richard Hurlburt and never request his services as he is a liar, charlatan and has got his own biased agenda. Richard, you should be ashamed of yourself!

Posted by Guest on Feb. 11, 2013 @ 3:44 pm

For the record, I’m not what you’d call a “TIC lawyer.” I'm a tenant rights lawyer. Occasionally, the circumstances are appropriate for my tenant client to purchase a TIC unit, and I assist them in the purchase. (dba TENANTS BUYING REAL ESTATE) My client base doesn't really include TIC owners and even if it did, I would just be helping to solve the same kind of neighbor disputes that would arise in a condo situation.

The fact is this particular legislation is bad policy. The "harm" the proposed law would supposedly address is not so compelling as to justify the real harm it would do to tenants.

TIC purchasers receive a $100,000 or more discount when they purchase their unit, compared to what it would cost to buy a comparable condominium. (Obviously, this number varies, but often its even higher.) The trade-off is it costs more to finance a TIC. Currently, TIC loans cost about 2.25% more. So, on a half million dollar loan, the higher interest results in payments of about $617 more than a conventional loan. About a third of that higher interest payment comes back to the TIC owner as a tax deduction, so the real difference is $407 per month. But since the TIC homeowner paid $100,000 less at purchase, he/she is actually ahead of the game for 20 years. By then the building will probably win the condo lottery. /RH

Posted by Richard Hurlburt on Feb. 13, 2013 @ 3:22 pm

trusted to provide neutral commentary. Why do you care if a few people catch a break? Nobody is harmed thereby.

Posted by Guest on Feb. 13, 2013 @ 4:18 pm

Richard, in your calculations you are FALSELY assuming that the TIC rate is fixed. It is not. The 20 year "ahead of the game" is actually 5, 7 years tops. Then the rates change and nobody (not even you) can predict what they will be. Currently, the estimated average waiting time for the lottery is 13-15 years (if you purchased recently). So, with what kind of certainty are you claiming that TIC owners are ahead of the game??????

Posted by Guest on Feb. 14, 2013 @ 3:05 pm

Isn't it funny that the real estate shills here describe rent-controlled apartments as "shitholes," but the same housing unit is an "affordable homeowneship opportunity" if it is a TIC?

Posted by Eddie on Feb. 11, 2013 @ 5:39 pm

invest in improving it, and develop a pride in the place that is impossible for a renter to ever underdstand. TIC buyers ARE tenants, people just like you. They are not speculators or parasites. They are honest, hard-working middle-class people who want to improve their lot.

And you hate that?

Posted by Guest on Feb. 11, 2013 @ 5:44 pm

but not always in the units that they buy communally. Often, they are displacing other less affluent tenants who lived previously in the newly converted TICs.

We were evicted from an apartment that converted to TIC. At the time, I calculated the approximate monthly payment for our previous apartment and it was three to four times our rent. For much less money, we found a bigger rent controlled apartment.

The other commenter is onto something when he expresses the fact that some TIC owners got suckered into an investment that didn't pan out as they hoped (or were led to believe by the broker.)

Posted by Eddie on Feb. 11, 2013 @ 6:00 pm

us who have taken those risks also understand the rewards that come with those risks. If you only ever want to rent, then that is fine, and I am sure you will always find someone who will rent out their place for you. But what is flexible and fun when you are 25 has a habit of feeling rather sad and lonely when you are 50. At some point, you will want to take the plunge.

It's true that the TIC/Condo and Ellis/TIC paths tend to lead to occupation by higher net worth occupants. But then SF as a while is becoming more high income and high value, so that is hardly a surprise either.

Posted by Guest on Feb. 11, 2013 @ 6:15 pm

Deferred Maintenance is the better description. Someday, I hope you will own your home, and if it's a recently converted TIC in SF, you are certain to see a "shithole" referred to as such. Best of Luck!

Posted by Guest on Feb. 11, 2013 @ 5:53 pm

Once a building has been partitioned and sold, the damage has been done. Renter and affordable housing advocates and city representatives should working to create a lottery system to partition buildings in the first place.

The extra money that TIC owners pay in interest helps no one, accomplishes nothing, and penalizes the wrong people. Moreover, the law is unfairly and inconsistently applied by allowing owner-occupied two-unit TICs to bypass the lottery after one year; under the same logic, any owner-occupied TIC should be able to bypass within a year or two if the majority of occupants can show it is their primary residence.

Unless you own one of the few (out-of-state) banks that will finance TIC loans or a landlord who would like to partition a building, evict its tenants, sell it, and walk away with no consequences or penalties — or, as other readers have pointed out, an attorney who makes money from the current system or a lazy journalist — then you have no real interest in perpetuating the current lottery system.

Posted by Guest on Feb. 11, 2013 @ 9:03 pm

under State Law and the city cannot over-ride that. Bierman tried that and it got bounced by the courts.

TIC is not a change of use - it is a form of ownership. Therefore the city cannot limit TIC formation.

All the city can do is try and limit condo conversions, but the city makes a lot of money from that - millions each year, Stop that and you have to lay off all the city employees in the DBI, DPW, Planning Department etc. and riase taxes.

As you say, once a TIC is formed, the tenants are long gone and will never come back. So there is little reason not to allow them to be condo's. This law is a one-off and so will have no effect on future evictions, mosts of which will be Ellis's anyway, and so not eligible for condo conversion anyway.

Posted by Guest on Feb. 12, 2013 @ 8:08 am