No progress in condo conversion standoff, despite the Chron's spin

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This poor PacHeights couple profiled by the Chron just wants a home they can sell. Should we blame tenants or Realtors?
Liz Hafalia/SF Chronicle

Perhaps it was just an unfunny April Fool's Day joke or some wishful political spin, but the San Francisco Chronicle's April 1 article about how tenancy-in-common owners and their political supporters are pushing legislation that would allow them to bypass the condo conversion lottery seriously misrepresented the city's biggest current political standoff.

Nevermind the article's over-the-top bias in favor of those poor, hard-luck TIC owners, like the featured Pacific Heights couple forced to raise their baby in a closet when all they really want to do is flip the apartment they bought for a profit. Or how the Chron all-but-ignored the fact that these TICs were rent-controlled apartments in a city where two-thirds of citizens rent. That kind of top-down view of the world is pretty typical for the Chron, even in its news stories, despite the paper's strained claim to “objectivity.”

No, the article's real sin was to get the basic facts wrong on where this political stalemate now stands, presenting the wishful spin of one side as if it were the latest news. Between the headline, “Owners seeking condo conversions may have shot” and the first deckhead, “Making progress” (which plays off this paragraph. “'I think we're making progress in our discussions and negotiations,' said [sponsoring Sup. Mark] Farrell, while noting the talks with tenant advocates, TIC owners, and real estate interests are 'far from the finish line.'”) the article leaves the impression current negotiations may produce a compromise.

But the problem is that there aren't any current negotiations between the two sides, and there haven't been for weeks, according to tenant and other involved sources. In fact, they say there's been no movement in this standoff since almost a month ago when I last reported that tenant groups and progressive supervisors were preparing a set of hostile amendments to the legislation.

They would allow a one-time condo lottery bypass for the nearly 2,500 TIC owners in the pipeline in exchange to shutting down the lottery for many years and preventing any conversions of rent-controlled apartments into condos until city builds a comparable amount of new affordable housing, and then probably restricting condo conversions to smaller buildings after that to protect large rent-controlled apartment buildings from real estate speculators.

That proposed compromise, which the article barely mentions before letting Farrell say "his legislation poses no threat to rent control," would help the poor Pacific Heights couple at the center of the article. But the real estate industry and its conservative allies don't really care about that couple as much as they do maintaining the flow of rental units into the real estate market, which is why the negotiations have broken down.

Instead, the Chron has Sup. London Breed – who is indeed a swing vote of the issue, but not one that tenant groups are counting on given how close she is to Plan C and the landlord lobby – citing a compromise proposal that would prevent the new condo owners from selling their properties for five years to discourage real estate speculation.

Perhaps that's something the TIC owners and real estate interests that the article relies on think is a realistic compromise, but it's not something that has been seriously discussed with tenant groups, mediating Sup. David Chiu, or the other interests that would be needed to pass this legislation.

Sara Shortt, the token tenant activist that the Chron talked to for the article, confirmed to us that there is no real compromise deal in the works and preventing the creation of new condos from existing apartments is a bottom-line issue that unites everyone who is now opposed to this legislation.

“The Plan C/Realtor etc. won't concede on our key issue: restriction on future conversions in exchange for the bypass. We have given as much as we can give and they have given virtually nothing in return,” Shortt, executive director of the Housing Right Committee, told us by email.

Even Sup. Scott Wiener, who co-sponsors the legislation with Farrell, told us there has been “no change from before,” when negotiations broke down. But the legislation is on the April 15 agenda for the Land Use and Economic Development Committee – for the fifth time, with most hearings canceled because of the lack of negotiating progress.

If the Realtors and Plan C (which is dominated by real estate and banking interests) stick to their intransigent position – hurting this poor Pac Heights couple in the process, which the Chron fails to note – then tenants and progressive supervisors are likely to amend the legislation and call the bluff of those who claim this issue is simply about poor TIC owners stuck with shared mortgages.

Comments

Limiting the amount one can sell their private property for is a taking under the Constitution of both the United States and California. It represents an illegal "taking." Your call for market controls is not going to happen least of all because people are still able to buy the properties on the market meaning there exists a healthy supply and demand. The supply should be higher, which would push prices down, but progressives had illustrated they are not at all interested in broadening the home owning-class in San Francisco.

Posted by Lucretia Snapples on Apr. 04, 2013 @ 10:57 am

There is nothing he doesn't trust the government to do, in rather obvious disagreement to the majority of voters who do not trust politicians at all.

More accurately, I suspect that Greg only really wants to control the prices of things he cannot afford like, say, a home in SF.

I demand price controls for Mercedes cars, because I want one and cannot afford one.

Posted by Guest on Apr. 04, 2013 @ 11:13 am

and then banned by the legislature. Good luck with Greg's dream of a government-run (more like run by greedy non profits) telling people how much they can buy and sell their property for. Greg forgets this is a big state and no one outside of San Francisco is at all interested in market controls. Market controls exists in Cuba for private property and even there people have figured out ways around them.

Posted by Lucretia Snapples on Apr. 04, 2013 @ 2:00 pm

weapons that the landlord community now has: Costa-Hawkins, which ourlaws vacancy control and rent control on condo's and SFH's. And Ellis which allows a LL an unfettered right to evict and exit the long-term rental market.

Classic example of people like Greg pushing too hard, refusing to compromize, and then ending up with egg on their faces.

Posted by Guest on Apr. 04, 2013 @ 2:52 pm

Let me get this straight Greg, you admire the way that North Korea deals with enemies of the people? Who's moderating these comments anyway??

Posted by Guest on Apr. 06, 2013 @ 3:20 pm

kinds of countries we wouldn't live if it were last nation standing.

Heck, he'd like in North Korea and he doesn't even like Asians.

Posted by Guest on Apr. 06, 2013 @ 3:37 pm

Where did he say anything about admiring the way North Korea deals with enemies? That was Lucretia's usual red-baiting. Oh, wait. I get it. You're not illiterate. You probably ARE Lucretia.

Posted by Guest on Apr. 06, 2013 @ 7:48 pm

GIS Analysts don't make a lot of money- do a salary survey.

Posted by Guest on Apr. 06, 2013 @ 8:09 am

Just to clarify- Plan C is a volunteer organization- no paid positions. Unlike the Tenants Union which has a small staff. I guess that explains why the Tenants Union blows this entire issue out of proportion: they need to secure their livelihood.

Posted by Guest on Apr. 06, 2013 @ 9:05 am

The idea that they are a pro-developer, pro-wealthy lobby group is as ridiculous as suggesting that TIC owners are devils, rather than the nurses and teachers who are the backbone of our city.

These people work - they are not full-time advocates and activists.

Posted by Guest on Apr. 06, 2013 @ 9:27 am

Ordinary people my ass!

Posted by Greg on Apr. 06, 2013 @ 7:44 pm

End rent control will help everyone in SF. Opening up Condo Coversions -- helps not only Tentants-in-Common, it would help everyone who rents too. (the unions are spinning this for their own subsidized benefits.

We need to vote and help Supervisors change the rules about renting, selling and converting TICs to condos!
No big city has housing issues like SF -- due to we have rent control and other cities don't.

Posted by Guest Free Markets, Free Minds on Apr. 03, 2013 @ 11:18 pm

1) End rent control
2) Allow unlimited condo's
3) A massive program of building high-rise homes in the east of the city

This would cause decreasing home values in the city. But of course too many on the elft have too many vested interests in the current "struggle". While property owners want high values.

Too bad for the rest huh?

Posted by anon on Apr. 04, 2013 @ 6:42 am

If we let them get away with this, it's not going to be good for first time home buyers either. We've been looking to buy a TIC, because it is cheaper and we want to stay in the city. But what's going to happen if the city let's them condo-convert, is that the prices of all these TICs will just go up. People will expect to be able to convert, so they'll no longer sell at a discount -they'll be just as expensive as condos.

Great for those who already bought, like this couple. Not so great for thousands of renters who want to buy in, and no longer have this other choice selling at a discount.

Posted by Ruth on Apr. 03, 2013 @ 11:39 pm

My guess would be that it will make prices cheaper for TIC's that do not participate in the bypass, because they will face a longer time to win the lottery.

A key factor in a TIC price is far along the lottery process it is.

Posted by anon on Apr. 04, 2013 @ 6:44 am

We both know they won't. A couple years from now, Kevin Ernst's buddies in Plan C will be back for more. Hell, they already reject a moratorium, which is the main sticking point in the negotiations. We both know this is an attempt to do away with the lottery completely... which is, after all, what you just said you wanted. This is just a step on the way there, which is why you support it, and why you reject the proposal for a moratorium.

It's true, once the floodgates are open, these things will be prices like the condos they essentially are turned into.

Posted by Greg on Apr. 04, 2013 @ 7:31 am

the lottery will be cleared out down to a fairly low level, and would then start over. It would take many years for the line to get as long as it is now, so there is no reasonable expectation of a repeat within a forseeable time period. Nor any need, of course.

But of course the supes could do anything in the future, from banning all condo conversions to repealing rent control. Speculation about that doesn't seem too prudent or successful.

You seem more vested in the principle here than in helping many SF homeowners.

Posted by Guest on Apr. 04, 2013 @ 7:40 am

SFBG, why don't you spend more time reporting criminal like JULIET ELLIS on SFPUC? She is taking our city tax money for her own benefits on top of her high paying salary.

Matier & Ross beat you every time.

Posted by Guest on Apr. 04, 2013 @ 7:47 am

We're able to walk and chew gum -- as well as reporting stories on a variety of topics, from ethics violations to political machinations over important legislation -- here at the Guardian. For example, my recent stories on Airbnb's tax dodge and Mayor Lee's self-interested complicity in the matter have a far bigger impact on city taxpayers than Ms. Ellis' alleged ethics violations, which you've misrepresented here as "criminal" (this is an administrative issue, not a criminal one, unlike the laundering of tax-dodge savings into political donations or committing perjury under oath) and as benefitting Ms. Ellis financially (she received no kickback from Green for All for getting a contract to do what it does anyway and what the SFPUC wanted to get done). But I'm glad to hear that you're so concerned about journalists watching out for taxpayers, so I'm sure you must have contacted Matier and Ross about giving some coverage to the Airbnb tax scam. I'll be looking for that story, oh ever-vigilant citizen.

Posted by steven on Apr. 04, 2013 @ 11:30 am

>"the laundering of tax-dodge savings into political donations or committing perjury under oath"

Hey Steven, shouldn't you share this with us? This is big stuff!

Can you please give us an example of either one of the above?

Who committed perjury under oath? Not who you WISH committed perjury, who really committed perjury?.

Because I think that you are fibbing again, saying things that you wish were true as if they were facts.

Can you please give us an example of Mayor Lee's complicity in an AirBNB tax dodge? I know that he is close to Ron Conway but what is the complicity? I mean, you were close to Julian Davis, so were you complicit in his groping activity? Does Ron Conway really need to cheat on his SF taxes in order to make a living? Is he stupid enough to invest in a company that only works if it doesn't pay its taxes? Really?

Posted by Troll on Apr. 04, 2013 @ 12:48 pm

Mayor Lee has been doing photos opps with the CEO of Airbnb and going on free junkets to Paris with Ron Conway -- who funds both Lee and Airbnb -- and he's apparently been unwilling to say, "You should probably pay your local taxes." Why doesn't he say that, either publicly or privately? Hmm, maybe it has something to do with Conway spending millions on Lee and his pet projects. That is a clear and direct conflict of interest, and a crafty prosecutor could make the case that this is essentially money laundering. But DA George Gascon -- who is also funded by Conway and also has a conflict of interests -- won't touch it, just as his office ignored last year's perjury allegations against Lee. This isn't simply my projection -- two direct witnesses submitted sworn declarations to the Ethics Commission alleging perjury by Lee, but the commission also decided to do nothing. So either Lee committed perjury, or his two accusers committed perjury in their declarations, so somewhere in all of this a crime was committed. This is all well-documented in the Guardian and other newspapers, so you can play dumb, Troll/Tony W., but you aren't fooling anyone.

Posted by steven on Apr. 04, 2013 @ 1:20 pm

Exactly as I thought. Steven says what he wishes were true and expects/hopes that people will believe it.

Steven makes the strong charge about Ed Lee's complicity. When asked for details he points out that Ed Lee is close to one of the investors.

In other words, Steven was fibbing again.

Ron Conway doesn't own or control AirBNB. He is one of the investors. And Forbes doesn't even mention him when they talk about AirBNB:

"Thiel is only the latest in a series of high profile and high net worth individuals investing in the company. Airbnb earned its first seed funding in Paul Graham’s Y-Combinator. Sequoia Capital invested in its second seed round. Then came Greylock Partners and Keith Rabois. Finally, a July 2011 $112 million round that valued the company at $1.3 billion brought a massive wave of big names on board: Andreesen Horowitz, Russian investor Yuri Milner’s Digital Sky Technologies, billionaire Jeff Bezos and celeb-u-vestor Ashton Kutcher. This new round would therefore double the company’s value."

So asking Conway to 'pay his taxes' makes as much sense as asking Ashton Kutcher.

And, just as I thought, Steve was lying about Mayor Lee 'committing perjury under oath'. When asked for details he admits that two people said that he he did, one was hearsay and the other was double hearsay. Olague could have been unclear, Walker could have misunderstood her. And the Peskin story is an absolute joke.

Maybe it's not fair to say that Steven lies, he just says things that he wishes were true and hopes that people will believe him, in spite of his reputation.

Posted by Troll on Apr. 04, 2013 @ 1:54 pm

He may be wrong but I think he is decent and well-intentioned.

But when he empasizes one aspect of a story (Lee's alleged "invlvement" with AirBnB") and ignores another aspect of the same story (rent-controlled tenants breaking their leases and evading tax on AirBnb rentals) then you have to ask at what point does disingenuous bias become dishonest reporting?

Posted by Guest on Apr. 04, 2013 @ 2:47 pm

Thanks for giving me some credit, but it's not accurate to say I ignored tenants violating their leases and evading taxes through Airbnb. In fact, my first long cover story about Airbnb focused on how many people using Airbnb (myself included at one point, as I discussed) were violating their leases and local law by renting rooms to short-term guests, which I've also mentioned in most of my Airbnb stories since then. And I've strongly emphasized that Airbnb's hosts share the tax burden with the company, which is why I also consider that evasion to be a consumer protection issue because the company has done little to let its San Francisco hosts wrong about the tax bill they made be unknowingly racking up.

Posted by steven on Apr. 05, 2013 @ 10:52 am

No surprise. It's in the standard bag of tricks to impute onto your opponents the exact dishonest tactic you are guilty of.

Disingenuous is the watchword with "anon" (etc.) and it is hardly worthwhile even responding since no doubt your words will be... you know.... "misconstrued."

I think in your last paragraph you meant to emphasize that the company does not make it clear to its San Francisco hosts that they are racking up -- and wrongly evading -- substantial tax liabilities.

Only those who habitually prattle about how taxes are bad would fail to see the problem.

Posted by lillipublicans on Apr. 05, 2013 @ 11:26 am

free, is that Steven does address the issues and the arguments. You make everything personal.

AirBnB's site does remind hosts to comply with all local laws and taxes, and they cannot reasonably be expected to know what those are in every jurisdiction.

I keenly await a lawsuit to determine who really is ultimately on the hook for these taxes. It's still not clear to me that intermediaries are mandated to collect tax. Analagously, Amazon have started collecting CA sales tax on online purchases, but other online vendors still do not.

There is no federal law about it AFAIK. The liability has to be with the "hotel" - the issue is more whether AirBnB can be used by the city as a convenient proxy to collect the tax.

Posted by Guest on Apr. 05, 2013 @ 11:34 am

Crazy talk for a trash spewing troll.

Your sense of the "reasonableness" of expecting the company to know local laws would seem to be closely correlated with a tendency to prate about how taxes are bad. We're talking about nearly 2 million dollars here.

And why should anybody care about your "keenly awaiting" anything? Who should care about your vaguely described worries, and aspirations? How can you even propagate such obnoxious and foolhardy public self-abuse?

Posted by lillipublicans on Apr. 05, 2013 @ 11:59 am

Uzbekistan, are you seriously suggesting that they should collect Uzbekistani taxes? How would they or could they know how they work.

There are 200 nations on the planet and literally thousands of cities, each with their own rules. AirBnB's best bet is to do what they do do, and tell their hosts and guests to obey all local rules and pay all local taxes.

When did AirBnB becomes the bad guys here? It's tenants like Steven doing this on the side who are evading their responsibilities.

Posted by Guest on Apr. 05, 2013 @ 12:19 pm

Think about it...not only do you have to know the taxes in every municipality in the world but you would have to have a system for actually filing and paying the funds.

Who is responsible if Gaborone, Botswana changes their tax? That would need to be changed real time, wouldn't it? Suppose Osaka temporarily rescinds the tax in an earthquake ridden neighborhood, but not the entire city?

What about currencies? Who is left holding the bag if the Turkish Lira plummets?

Companies like Expedia do provide for a tax recovery fee, they collect a separate amount (most likely according to a formula that the hotel is responsible for) and they pass that amount to the hotel. Hopefully the hotel uses the money to pay it's taxes but Expedia is very clear about the fact that it is not their responsibility to find out.

Maybe AirBNB will install a similar system one day. Despite what Steven says the truth is that they do currently caution their hosts about the tax liability. Another commenter published that section from their contract and they also do so on their site.

Its been decades and we still haven't figured out the online sales tax issue. The concept that the city could get away with imposing such an unprecedented burden on just one new company is a joke.

Also, Steven seems to think that AirBNB is owned by Ron Conway when in fact he is just one of many investors. Conway couldn't tell AirBNB what to do even if he wanted to.

Steven's whole campaign here is like watching a car wreck. He sees a chance to cheap shot Ed Lee. That is all he is capable of seeing. There are real issues here, but they left are for journalists to cover

Posted by Troll on Apr. 05, 2013 @ 12:33 pm
Posted by Guest on Apr. 05, 2013 @ 1:14 pm

outside of elected officials with which the Guardian disagrees are immune from being investigated and should never be questioned. Do you know how hard it is to exist on $191,000 a year in this city? Don't even suggest adding to this poor city worker's problems!

Posted by Lucretia Snapples on Apr. 04, 2013 @ 2:03 pm

Would have been a better picture even, but Baby's hep black twosy was probably out at the cleaners.

Posted by lillipublicans on Apr. 04, 2013 @ 9:14 am

What's really "precious" here is the attitude that if a couple are white, hard working and attractive, they don't deserve a break.

Posted by Guest on Apr. 04, 2013 @ 9:34 am

friendly with you, but really it's just a bit of neccessary acid to cut the Chronicle's treacly staging.

Posted by lillipublicans on Apr. 04, 2013 @ 10:18 am

1) You can't afford to live next door to me, and

2) That said, neighbors can be helpful, as the battered women of this city learned about our sheriff, thanks to an alert and caring neighbor.

Posted by Guest on Apr. 04, 2013 @ 10:45 am

I'm a TIC owner. We are friends and bought a 3-story building in 1995. It is almost paid off at this point.

This new proposal is appealing to me in many ways. I had a problem with the original proposal because it clearly would have enticed realtors into buying units and putting them on the rental market, knowing that rent control would not longer apply.

But now, the condos would come under rent control if rented by their owners. In my opinion, this will encourage people to buy condos for living, but discourage renting. What's wrong with that?

Posted by Troll the XIV on Apr. 04, 2013 @ 5:06 pm

should have any kind of issue with a proposal that appears to harm nobody and benefit many.

Posted by anon on Apr. 04, 2013 @ 5:57 pm

I don't know whether you're being deliberately dense or just sticking to the talking points you've been issued, but you're missing the point. From the perspective of tenant advocates and those concerned about this city's socioeconomic diversity, this is about preventing apartments from being turned into condos. The city is building lots of new condos and no new rent-controlled apartments. That's the issue, an important one in a city where two-thirds of citizens rent, but where the rental stock in declining. Our apartments aren't your "affordable home ownership opportunities," get it? If you want to buy a condo, there's plenty of them out there and they're making more all the time. It's really simple, which is why I think those who claim to not get it aren't being honest.

Posted by steven on Apr. 08, 2013 @ 3:44 pm

It' not your apartment, is you name on the title? You greedy property kidnapers make me sick.

Posted by Guest on Apr. 10, 2013 @ 8:24 am

They're in the lottery.

The debate here is about which units are going condo, or even how many. It is solely about when that happens and, since none are rented out anyway, that has no effect on the rental stock.

Posted by Guest on Apr. 10, 2013 @ 8:51 am

Poor people whine and suck, get rid of them once and for all, they belong in Stockton or Modesto or where ever. Rich people are the greatest.

Posted by Guest on Apr. 10, 2013 @ 8:22 am

However, whining that the government should take from others and give it to you just because you are poor doesn't sit well with most Americans.

And yes, some towns in the Bay Area are more suited to some in SF who feel they have an entitlement to live in a place they cannot afford.

Posted by Guest on Apr. 10, 2013 @ 8:49 am

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