No sympathy for TICs

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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.

 

Comments

from lottery winners is 200 * $20,000 = $4,000,000. That is the maximum as the fee is reduced depending on the length of time the applicant has been in the lottery process.

Losing $4,000,000 per year would not force the city "to lay off all the city employees in the DBI, DPW, Planning Department etc. and riase (sic) taxes."

Posted by Eddie on Feb. 12, 2013 @ 8:18 am
Posted by Guest on Feb. 12, 2013 @ 3:27 pm

I would like the "journalist" to explain what exactly about this uni-lateral self-interest promoting letter full of inaccurate claims is "fascinating"?

Thank you!

Posted by Guest on Feb. 11, 2013 @ 11:20 pm

Does anyone know how many of eligible units are owner vs tenant occupied? What is the real "cost" to renting market?

Posted by Guest on Feb. 11, 2013 @ 11:23 pm

tenant approval to go condo anyway. But if you do go condo, you can usually evict the remaining tenants (just cause number 9). This law would grandfather those tenants and make them exempt from 9.

Posted by anon on Feb. 12, 2013 @ 7:55 am

Yes, I understand. The author of the letter is concerned about the number of rental units being pulled of the market and its impact on future rentals. I know a lot of people in the lottery - all of them owners who do not rent their units out anyways. How many units (of 2200 in the lottery this year) are actually rental units today? 10%? 90%?

Posted by Guest on Feb. 12, 2013 @ 8:19 am

this measure passes. It's a win-win for everyone - either you benefit or you are not affected at all.

Posted by Guest on Feb. 12, 2013 @ 9:05 am

Many HOA agreements prevent or discourage TIC owners from renting, while fractional loans carry such high interest rates that owners could only rent at the top of the market in order to cover their mortgages.

Posted by the wrong lottery on Feb. 15, 2013 @ 12:18 am

I am a TIC owner along with some friends. We bought one of the first TIC buildings in the mid-1990s.

If TIC owners are allowed to convert their properties immediately into condos, real estate speculators and REITs are going to quickly gobble up real estate, convert it into condos, and sell it to rich asswipes.

The original idea behind TICS was to enable working folks to afford property. That's why I still support the TIC concept. But I don't want to see it converted into a ploy by speculators to buy property.

It is not hard for TIC owners to refinance at lower interest rates. We did it in around 2004. The three of us (families all) got together and refinanced. It's not hard unless somebody is in financial straits.

Posted by Troll the XIV on Feb. 12, 2013 @ 7:03 am

converted it? Why not? You could have won the lottery several times over in that time.

Posted by anon on Feb. 12, 2013 @ 7:56 am

I am truly happy your particular situation is working out great for you.
We bought our TIC unit at the peak in 2007. We cannot easily refinance as we owe more money than the unit appraises for, plus the requirements for the downpayment have changed considerably, and we would need to put in a lot of $$ in to refinance. And still it would be at higher rates, more % down, and at best 7/1 ARM for the TIC vs lower rates, less % down, more appraised equity and 30 y fixed for the condo. So yes, IT IS HARD to refinance. Just because you did it in 2004 does NOT mean everyone can do it in 2013.

Posted by Guest on Feb. 12, 2013 @ 8:24 am

But Guest, haven't rates fallen to about 3.5%?

Isn't it possible for you and the other REIT members to scrape together the upfront costs, take today's low rates, and then enjoy the benefits?

As I recall, our refinancing costs were about $5,000.

Also, you say your property is worth less than it was appraised for? I thought SF property values were holding up well and are even rising above levels before the crash.

Posted by Troll the XIV on Feb. 12, 2013 @ 9:45 am

in the prime area's. However, TIC's may not have seen the same appreciation as cleaner forms of ownership, and that will make re-fi's tougher if they don't appraise right.

Posted by Guest on Feb. 12, 2013 @ 10:11 am

for a TIC loan?
try doubling that and you'll be in the ballpark.

Posted by guestD on Feb. 12, 2013 @ 11:55 am

When we refinanced (around 2003) the rate was 5.5%, which I believe was the standard rate on mortgages at the time.

Posted by Troll the XIV on Feb. 12, 2013 @ 12:42 pm

on a 30 year, versus 3.25% or so for a condo or SFH.

Posted by Guest on Feb. 12, 2013 @ 12:49 pm

just for the record, you can't get a 30 year fixed on a TIC, nor can you get 3.25% for a condo or SFH. Trust me, I'm in the midst of a re-fi as we "speak"

Posted by guestD on Feb. 12, 2013 @ 1:29 pm

You're wrong. Maybe my credit score is higher, huh?

Posted by Guest on Feb. 12, 2013 @ 1:56 pm

or maybe rates have gone up, you know, like they often do...

http://www.bankrate.com/refinance.aspx

Posted by guestD on Feb. 12, 2013 @ 2:30 pm

But last time I was in BofA, they had a sign advertizing 3.25, 30 years fixed.

Posted by Guest on Feb. 12, 2013 @ 3:25 pm

Troll, are you high on something?
If your brain is not functioning well to begin with, it's a good idea to stay away from those stuff.

I could tell that you made up your story about buying TIC etc. NO TIC owner would agree with your assesment. We tried refinancing many times, and there is no bank out there who was willing to do that, because two units are rented out. And why did we rent it out? Because live curcumstance changed over the last 7 years. I for example, lost my job and couln't afford the mortgage so I had to move out of the city (btw, it is completely normal to leave SF when you can't afford it).

Do you even know that SF changes the law on TIC a few times now by making different definition on the TIC law itself. The requirement for condo conversion used to be based on the ownership of the building, which means as long as all the owners qualify when first submiting the application, we're ok even if we sell afterwards. And they changed it to: the unit has to be occupied by the original owner until we get condo. Otherwise the clock resets to year 1 again.

Posted by Guest on Mar. 27, 2013 @ 10:32 am

We never tried to convert. The property taxes on the individual units would increase. We were friends before the purchase, which I understand is not the case for most TIC owners today.

We'll probably try to convert someday.

The loan will be paid off fully in 5 years. One idea we are looking into is making it into a co-op like rich folks do in Manhattan. The property tax rate would never change, but the owners could sell their own units within the co-op structure.

Posted by Troll the XIV on Feb. 12, 2013 @ 8:15 am

That only happens with a sale.

There are of course fees and such, but they will only get higher the longer you wait.

One reason not to condo convert is if you know there are substantial building code violations that will have to be fixed. DBI gets really petty with condo conversions and, particularly if you've done some dubious things with attic and basement spaces, in particular, you might be better off not opening that can of worms.

Posted by Guest on Feb. 12, 2013 @ 9:04 am

Troll said: "We never tried to convert. The property taxes on the individual units would increase. We were friends before the purchase, which I understand is not the case for most TIC owners today"

You are full of you-know-what. You obviously don't even know a thing about TIC. Property tax does NOT change after you go condo. ONLY if you sell, then the new owner will pay prop tax according to the sale price.

Not only your brain is not functioning and you are high on something (maybe lots of things), but your entire body is full of you-know-what.

Posted by Guest on Mar. 27, 2013 @ 10:35 am

receive a discount equal to the difference between the actual rent you pay and the amrket rent of that unit.

The landlord essentially eats that loss because he is given no choice, but that doesn't mean you are paying the full price for your housing. The entire point of rent control is that you are not paying the undiscounting price.

Of course, eventually you get Ellis'ed, as it seems has already happened to you once. Enjoy your subsidy while you can.

Posted by Guest on Feb. 12, 2013 @ 3:50 pm

of the format of this website.

First, your subsidy argument continues to be bogus even if this is a discussion under a different article. Making up your own definitions of words doesn't equate to reality.

Second, if rent control is so burdensome to our landlord, why hasn't he raised our rent in over two years as is his right under rent control?

Third, just as your housing situation is none of my business and I don't question it, our situation is none of your business unless you are my landlord, which I seriously doubt.

So keep you shit-covered nose out of my business, troll.

Sorry again, BeckyBayside, but it's hard to avoid responding to personal attacks and insults.

Posted by Eddie on Feb. 12, 2013 @ 4:11 pm

they are so abysmally low, it's not worth the effort.

If you have only been there for 2 years, your rent is not that far from market, and so you are unlikely to be Ellis evicted any time soon. Well done.

Posted by Guest on Feb. 13, 2013 @ 4:16 pm

how long we have lived in our apartment. Reading comprehension matters.

Posted by Eddie on Feb. 13, 2013 @ 4:27 pm

I was explaining to you the total lack of significance of your LL not bothering to apply tiny alllowable increases.

Also, such increases are bankable, meaning that they may be imposed in future years. Since you will no doubt be clinging to this place like a limpet, they will come along eventually, if Mr. Ellis doesn't catch you first.

Posted by Guest on Feb. 13, 2013 @ 4:45 pm

This legislation is badly written because in reality it does nothing to address the real problem that is HOUSING INSECURITY on a large scale. It is a band-aid that helps a minority, TIC owners, but does nothing to alleviate the larger issue. San Francisco can do better than this. We are in this position, due largely to developments in the south bay of the tech boom, and so now we must also innovate our way to a solution. Please do not let this great city that has for so long been an inspiration to the rest of the country when it comes to civility and ecology, go back to the dredges and be carved up by brutes. Please do not contribute to that kind of future. If you choose to however, there will be dire consequences. The masses can only endure so much. If you take everything from them, then they become your worst fear no? Angry people with nothing left to loose.

Posted by Mr. Burbujas on Feb. 13, 2013 @ 2:50 am

If you have been evicted in the past, ask yourself whether you might have tempted that fate by paying a rent well below what you home was worth.

Posted by Guest on Feb. 13, 2013 @ 4:15 pm

This piece is about the journalistic equivalent of a doctor prescribing Fosamax to the next patient who walked through the door because a drug rep had just handed him a pen with the drug label on it.

The point is not whether anyone should have "sympathy" for TIC owners, but whether the current lottery system is deterring landlords from evicting tenants and selling units as TICs. It does not.

Anyone who is serious about this issue from a tenants' rights standpoint would be advocating for a new, fee-based lottery that landlords would have to participate in order to evict tenants and convert to a TIC. Lottery tickets would need to be purchased at a high fee, and winners would be limited.

Two-unit TICs can automatically condo-convert after one year if they are owner occupied, a safeguard that was put into place to protect people who purchased TICs to live in them, not to flip. By the same logic, multi-unit buildings that are majority owner-occupied for a reasonable period (1-2 years) should also be permitted to condo-convert.

As citizens, our concern should be in creating effective policies that deter evictions, protect tenants' rights, and also safeguard the rights of homeowners (or in this case) TIC owners.

Posted by the wrong lottery on Feb. 15, 2013 @ 12:14 am

These comments are ridiculous. The point is: San Francisco has THE HIGHEST rent prices in the United States. This city, and no city, is about kicking out poor and middle income people (that would be morally deplorable). If the TIC conversion goes through, hey lose rent control. I understand TIC-owners wanting to better their housing situation, but these elitist comments about how "I'm rich so every one should suck it" are sickening. Get a life. I am truly disgusted by the lack of compassion for the lower class of my fellow "San Franciscans." Get some class. #Karmasgonnagetyou

Posted by Guest on Feb. 16, 2013 @ 9:49 pm

Right now, the debate is whether TIC owners should be allowed to participate in a one-time, condo-bypass buyout for $20K per unit. This would only apply to entrants in the last two lotteries. To participate in a lottery, a building needs to be majority owner-occupied for three years. This means that no one could "buy out" and then flip.

Once a landlord has evicted tenants, sold the building, and walked away, the damage is done. The lottery was meant to discourage flipping, but also had a built-in protection for two-unit buildings, allowing them to automatically condo-convert after one year of owner occupation. This was to safeguard the rights of homeowners who bought a TIC with the intention to stay there. Now, however, there are many homeowners living in multi-unit TICs who are unable to condo-convert. Due to HOA agreements, this can lead to situations where people cannot refinance, cannot take jobs in other cities, and cannot even rent their units. (Or, if they can rent their units, they must do so at high rates due to the high interest fees they have to pay to banks to finance their TIC in the first place.)

Those interested in this issue from a tenants-rights perspective would be advocating for a new lottery that would require landlords wanting to evict tenants and sell units to participate in a lottery with higher fees and a smaller number of winners. This would help slow the rate of evictions in the first place — something the current lottery system has done nothing to prevent.

There are many reasons that housing prices are so expensive in San Francisco (and the Bay Area in general), having little to do with TICs. In recent years, new tech growth and also bus systems allowing people to commute from the city to Silicon Valley have driven up rents enormously; as other commentators have pointed out, short-term vacation rental sites have also driven up prices. Long-term anti-growth, anti-development, and zoning policies have also contributed to the current housing shortage. These all have little to do with TICs, and forcing TIC owners to participate in expensive lotteries does nothing to address or remedy any of these problems.

The current lottery system penalizes the wrong people. It makes people living in flats — often small — payer higher interest rates and enter lotteries for years, while the people they purchased from are allowed to evict and sell with few restrictions and no wait times, then walk away.

Posted by the wrong lottery on Feb. 16, 2013 @ 10:25 pm

Right now, the debate is whether TIC owners should be allowed to participate in a one-time, condo-bypass buyout for $20K per unit. This would only apply to entrants in the last two lotteries. To participate in a lottery, a building needs to be majority owner-occupied for three years. This means that no one could "buy out" and then flip.

Once a landlord has evicted tenants, sold the building, and walked away, the damage is done. The lottery was meant to discourage flipping, but also had a built-in protection for two-unit buildings, allowing them to automatically condo-convert after one year of owner occupation. This was to safeguard the rights of homeowners who bought a TIC with the intention to stay there. Now, however, there are many homeowners living in multi-unit TICs who are unable to condo-convert. Due to HOA agreements, this can lead to situations where people cannot refinance, cannot take jobs in other cities, and cannot even rent their units. (Or, if they can rent their units, they must do so at high rates due to the high interest fees they have to pay to banks to finance their TIC in the first place.)

Those interested in this issue from a tenants-rights perspective would be advocating for a new lottery that would require landlords wanting to evict tenants and sell units to participate in a lottery with higher fees and a smaller number of winners. This would help slow the rate of evictions in the first place — something the current lottery system has done nothing to prevent.

There are many reasons that housing prices are so expensive in San Francisco (and the Bay Area in general), having little to do with TICs. In recent years, new tech growth and also bus systems allowing people to commute from the city to Silicon Valley have driven up rents enormously; as other commentators have pointed out, short-term vacation rental sites have also driven up prices. Long-term anti-growth, anti-development, and zoning policies have also contributed to the current housing shortage. These all have little to do with TICs, and forcing TIC owners to participate in expensive lotteries does nothing to address or remedy any of these problems.

The current lottery system penalizes the wrong people. It makes people living in flats — often small — payer higher interest rates and enter lotteries for years, while the people they purchased from are allowed to evict and sell with few restrictions and no wait times, then walk away.

Posted by the wrong lottery on Feb. 16, 2013 @ 10:26 pm

Right now, the debate is whether TIC owners should be allowed to participate in a one-time, condo-bypass buyout for $20K per unit. This would only apply to entrants in the last two lotteries. To participate in a lottery, a building needs to be majority owner-occupied for three years. This means that no one could "buy out" and then flip.

Once a landlord has evicted tenants, sold the building, and walked away, the damage is done. The lottery was meant to discourage flipping, but also had a built-in protection for two-unit buildings, allowing them to automatically condo-convert after one year of owner occupation. This was to safeguard the rights of homeowners who bought a TIC with the intention to stay there. Now, however, there are many homeowners living in multi-unit TICs who are unable to condo-convert. Due to HOA agreements, this can lead to situations where people cannot refinance, cannot take jobs in other cities, and cannot even rent their units. (Or, if they can rent their units, they must do so at high rates due to the high interest fees they have to pay to banks to finance their TIC in the first place.)

Those interested in this issue from a tenants-rights perspective would be advocating for a new lottery that would require landlords wanting to evict tenants and sell units to participate in a lottery with higher fees and a smaller number of winners. This would help slow the rate of evictions in the first place — something the current lottery system has done nothing to prevent.

There are many reasons that housing prices are so expensive in San Francisco (and the Bay Area in general), having little to do with TICs. In recent years, new tech growth and also bus systems allowing people to commute from the city to Silicon Valley have driven up rents enormously; as other commentators have pointed out, short-term vacation rental sites have also driven up prices. Long-term anti-growth, anti-development, and zoning policies have also contributed to the current housing shortage. These all have little to do with TICs, and forcing TIC owners to participate in expensive lotteries does nothing to address or remedy any of these problems.

The current lottery system penalizes the wrong people. It makes people living in flats — often small — payer higher interest rates and enter lotteries for years, while the people they purchased from are allowed to evict and sell with few restrictions and no wait times, then walk away.

Posted by the wrong lottery on Feb. 16, 2013 @ 10:26 pm

There's a reason many countries limit foreign purchases of its real estate. The income of the local population is a fraction of the deep-money pockets of the foreign investor class, leading to displacement of the locals in favor or outside monied interests absent any protections. It's no different here in the US where the huge disparity of wealth and salaries means lower income people are priced out of their housing and either must choose to live a long distance from their job or leave the area altogether.

Today's story about how Facebook paid ZERO tax on its 1.1 billion dollar profit (and received a $429 million refund of prior taxes AND has a 2 billion tax deduction carryforward to use against future profits). The article also mentions that 2013 will be a year of significant hiring. Many of these new Facebook hires will want to live in SF, meaning more tenants will be evicted to accommodate these employees who become very wealthy from stock options and relatively high salaries.

Add google, oracle, twitter, zoom, and many other local techology companies also on a hiring binge, and the pressure on rents, housing prices, and eventual evicitons of existing tenants will continue to escalate in SF and surrounding cities.

From the article: "The company also said 2013 will be a year of 'significant investments' and hiring..."

http://www.dailymail.co.uk/news/article-2279701/Facebook-pay-tax-2012-ta...

Posted by Guest on Feb. 16, 2013 @ 10:36 pm

Much better if we were all miserable, impoverished losers huh?

Posted by Guest on Feb. 23, 2013 @ 8:08 am

These TIC buyes knew what they were getting into when they bought the rent-controlled unit. The lottery has had a 10-year plus waiting list for many years. Just ask Sheriff Mirkarimi was has been waiting forever to convert his TIC to condo via the lottery.

If TIC owners need to sell, there is a vibrant resale market for TIC units currently without waiting for their condo conversion ticket to be punched. Of course the selling price would be a couple hundred thousand dollars less than if it were a condo, but again they knew about the risks before they bought the TIC.

One thing you said is most telling: some current TIC owners want to leave SF for various reasons but want to rent out their units for a very high rent price. Until the units are condo, they won't be able to do this. Thus, greed to get a much high rent price after becoming a condo is motivating some of the push for this massive condo conversion legislation. In addition, the fact they would rent out the unit at all rather than sell it to another buyer indicates there are many TIC owners gaming the system to take rent-controlled units off the market to live off the ever-increasing rent income after conversion.

The law was very clear. Every TIC buyer knew it would take a long wait to condoize and that financing would be less than ideal. But the much lower TIC price (compared to an equivalent condo price) more than made up the financing inconvenience. There is no good reason to allow this massive conversion. Instead, the supervisors should be looking for ways to protect the current rent-controlled housing forever by preventing any of them from going into future lotteries for condo conversion.

Let the future TIC buyer wanna-bes and the thousands of instant millionaires at the booming technology companies who want to live in SF and other desirable Bay Area neighborhoods put pressure on city councils and supervisors throughout the Bay Area to BUILD tens of thousands more housing units in appropriate locations to accommodate these employees. Better yet, start charging billion dollar companies like Facebook a $300,000 fee for evey new hire and use the money to build housing for these employees, rather than have them evict exisiting tenants.

Posted by Guest on Feb. 16, 2013 @ 11:01 pm

Your objections sounds like nothing more than envy that someone somewhere is getting something that you are not getting.

Posted by Guest on Feb. 23, 2013 @ 8:06 am

Really, you really think that the comment was posted three times to make a point?

1. I didn't say that TIC owners wanted to leave the city and charge exorbitant rates. The point is that forcing TIC owners into a situation where they must pay high interest rates does not create a favorable situation for tenants either.

2. Most TIC owners are not the ones who evicted tenants. They simply bought the unit once it was sold. This is legally allowed by the government of San Francisco.

2. If I or any other TIC owner sold our unit — as you advise we do — the price would probably stay the same or possibly increase. How is this good for renters?

3. The law that permits the city to create the condo lottery for TICs actually only permits them to do this for a "reasonable" amount of time. If the city has determined that for two-unit building owners, one year is reasonable for a fully owner-occupied building, then it cannot say that 10 years + is reasonable for a four-unit building. The law is not applied evenly.

4. Because the city does little to stop evictions in the first place, the lottery pool and wait times have increased, so many TIC owners did not in fact know they would need to enter a lottery for 10+ years.

5. I'm not sure why you are singling out TIC owners as those especially deserving of needing a hard life lesson, especially when that hard life lesson benefits no one except evicting landlords, out-of-state banks that charge high interest rates, and some TIC lawyers.

I'm sure landlords and building owners seeking to redevelop love to read threads like this and comments like yours. You are giving them the free pass they need to evict with impunity while passing the blame — and penalty — to the new buyers.

Posted by the wrong lottery on Feb. 19, 2013 @ 10:56 pm

You can’t apply logic until you understand the way real estate markets work, including speculation. Speculation is always a major factor in any real estate market since quick and easy money can be made without building anything or even investing much of a down payment. If I invest 20% down on a building that increases 50% over five years, I make a 150% profit on my downpayment without doing anything other than being the nominal building owner. The tax benefits are very lucrative too since they essentially allow me to recover my initial downpayment. How cool is that!

But if the building decreases 50%, I turn it over to the bank and let them suffer the loss, limiting my own loss to the low downpayment that I’ve mostly recovered through tax deductions anyway. It’s like a casino that lets you borrow money to play – if you win big, the gains are all yours; but if you lose, the casino happily absorbs the loss. Socialism is alive and well in the US, except it only applies to real estate speculators who get 100% of the gains when property is appreciating, and the taxpayers pick up most of the bad loans when real estate crashes.

The US history – and especially SF history – is as much about real estate speculation and resource extraction as any other factor. Location on a bay, proximity to a densely populated and currently booming Far East, multi-billion dollar transportation improvements, many world-class universities, a tolerant, creative and well-educated population, and many other factors make SF real estate always in high demand, so the speculators are of course attracted to it since they can make quick and easy money with little work.

As for your points:

1) Refinancing costs for TIC owners have zero effect on current tenants in other buildings. The correlation is so tenuous and non-existent it's surprising you even added this point to your list since it shows little awareness of how the real estate market works. If anything, difficult follow-up refinancing may make other TIC buyers more cautious about buying a TIC. And if future TIC demand is diminished, this will help protect more tenants who might otherwise be evicted to create more TIC units. The opposite of the point you apparently were trying to make is correct – difficult TIC financing options HELPS current tenants from being displaced.

2) Every TIC owner purchased a former apartment, almost all of them protected by rent control. The fact current TIC owners didn’t perform the actual eviction hardly matters since it’s the underlying demand for the TIC units that prompted the tenant displacement in the first place. Just because it was other real estate players who cleansed the building of those “slacker tenants” doesn’t give TIC owners or subsequent condo owners “clean hands.”

We regulate and even criminalize downstream purchasers of ivory and tiger skin rugs because it’s the downstream demand that ultimately causes the killing of elephants and tigers to supply the demand. It’s the same for TIC owners – their demand causes the tenant evictions in the first place. Nice try protecting your conscious by thinking you were not a part of the eviction process, but you were, just as everyone who buys a condo that was once a rent-controlled apartment was ultimately the cause of the initial displacement too.

3) The decision to allow conversions of 2-units building within one year is based on the very misguided, even stupid, decision of housing activists and politicians to treat them as separate situations. That decision should be revisited by the city and those units should be put into the condo lottery as well since every existing tenant in a 2-unit building will be evicted soon because it is so easy to make a huge windfall converting the units to condos. But the fact 2-unit buildings are given a green light for tenant evictions and fast-track condo conversions in no way should impact the current process for other units since it has ALWAYS been the case that the condo lottery would apply to bigger buildings. Every buyer knew the rules but now they want the rules changed mid-stream. Changing the rules will only encourage MORE displacement, MORE demand for TIC units, and MORE demand for “one-time” TIC conversions.

4) The 10-year plus waiting period has been known for a very long time, at least 10 years. If people like you keep buying rent-controlled apartments as TICs in the hopes of condo converting, OF COURSE the wait times will increase. If this isn’t obvious to you, again you’re showing you don’t know how real estate markets work. You helped cause the wait time to increase to its current period by buying another TIC unit! Your argument is like saying, “it was the other people who polluted the river and my little bit of pollution isn’t causing very much damage.” But cumulatively all of the polluters are destroying the river, including you, in this case destroying rental housing that is vitally needed for future generations of students and teachers, short-time business assignments, waves of immigrants passing through; displaced LGBT and other marginalized groups from other parts of the country and world who may be in danger where they currently live; and millions of others who hope to live in SF for a period of time bringing the city their talents and taking away some of the city's charms and lessons as well. This multi-generational tidal action is what has made SF the great city that it is. There are 99 other cities in the Bay Area that are perfect for more stable living arrangements, which people with children often choose for a variety of reasons.

5) Again, it’s the TIC buyers who enable all of the other “evil” real estate players you list to thrive. Without your demand to buy a TIC unit in the first place, the evictions would not have occurred, the banks would not get to charge high interest rates, and TIC lawyers would be out-of-business. All of the ills you’ve listed are caused by the person looking back at you in your mirror every morning.

You show your selfishness by not acknowledging that you got a much better price for the TIC than if you bought a similar sized condo in the same area. This is saving you substantial property tax (thousands of dollars each year) for however long you hold the unit, even after the condo conversion when the unit value goes up by $200,000. Awkward financing and a higher interest rate are all part of the original calculation every TIC buyer makes knowing there is a very big pay-off at the end of the wait.

The fact Wiener and Farrell are pushing this legislation by focusing on the relatively minor interest rate and refinancing issues without mentioning the huge offsetting financial benefits TIC buyers receive, or emphasizing the tenant displacements caused by the TIC purchases in the first place, shows what the legislation is all about: Creating future demand for TIC units and causing massive displacement of current tenants residing in 2 to 6-unit buildings. If this legislation passes, and if new rules preventing ANY future condo conversion of rent-controlled apartments aren’t immediately enacted, every tenant in a 3 to 6-unit building will have a glowing target on their back. They will be displaced. It’s only a question of how many more months they have left to live in San Francisco.

Posted by Guest on Feb. 23, 2013 @ 8:55 am

It's a vital life skill that you appear to lack.

Posted by Guest on Feb. 23, 2013 @ 9:08 am

Here are some ideas for you that are more in your price range:

Oakland
Daly City
Richmond
Stockton
Tracey
Fremont
Brentwood

We do not owe you a home in a city you cannot afford. You can relocate and commute.

Posted by anon on Feb. 23, 2013 @ 9:11 am

of the real estate market is a welcomed addition to the discussion. Your insulting response, while predictable, will undoubtedly help quicken the time before you move permanently to Colma. Try upping your dose before you pop a vessel.

Posted by Eddie on Feb. 23, 2013 @ 9:35 am

There are plenty of affordable housing options for people if they only they are willing to spend a few more minutes commuting.

Cheap rent should not be an entitlement when cheap options are available outside of the downtown Bay Area that is SF.

Posted by anon on Feb. 23, 2013 @ 9:52 am

or Stockton is more than a "few minutes", environment be damned. And you pulled out the "entitlement" card as well.

It must be nice to be so self-absorbed that you referee your own debates.

Posted by Eddie on Feb. 23, 2013 @ 10:04 am

I suggested some places further away for those who cannot even afford those cities, but still feel for some reason that they "have" to be in the Bay Area.

Not everyone can afford Manhattan either, or central London.

Posted by anon on Feb. 23, 2013 @ 10:15 am

The commenter on here who keeps bragging about TIC owners taking risks to better themselves seems to forget that this legislation is in play because these people don't want to accept the consequences of their choices and gambles. They want government to bail them out of their risks. Renters just want to keep abiding by a deal that they cut and honored. What a concept. Responsibility.

I also find the antipathy toward rent control very amusing when it is juxtaposed with a grand pity party for homeowners who can't get their payments lowered and their property values inflated via government intervention. Under rent control, prices go up, even when the landlord has been able to refinance into a ridiculously lower rate generated by government efforts to prop up real estate owners. Yet the renters are vilified as the ones getting unfair breaks.

The most offensive part of all this is that the condo conversions would not trigger a reassessment that upped property taxes to a proper level. Prop 13 is the equivalent of rent control, with an outrageous shifting of tax burdens. It has led to a near doubling of CA income-tax rates and the sales tax. Tenants get abused by the policy because their income taxes rose to protect homeowners, who have writeoffs galore. These TIC owners will experience six-figure windfalls and not have to pay a dime on the gains. That is an absurdity.

Posted by Guest Molly on Feb. 23, 2013 @ 12:45 am

Conversions diminish affordable homeownership options by giving one generation of owners a windfall. Let's build more condos and stop converting TICs. They need to be left alone so that the next generation of buyers had a shot at the same great deal this generation received.

Posted by Guest Molly on Feb. 23, 2013 @ 12:48 am