Pay to By-Pass Condo Lottery?

I was thrilled to read a proposal today of what could be the most exciting news for TIC owners here in San Francisco....

From The San Francisco Chronicle:

Waiting to go condo is San Francisco's version of waiting for Godot.

Building owners can spend years vying for one of 200 condo-conversion slots awarded annually via a lottery. But this year San Francisco is considering letting people skip the line, offering a one-time chance to the hundreds of folks on the lottery list to go condo now - for an extra fee. The goal is to generate more revenue for the cash-strapped city and to create building-industry jobs, because condo conversions generally require some construction work to bring buildings up to code.

"We're investigating many revenue options to help solve the city's budget deficit; condo conversion is one of them," e-mailed Joe Arellano, a spokesman for Mayor Gavin Newsom.

A proposal to expedite condo conversion would require approval by either the supervisors or the voters - no easy task in a city where housing issues are famously contentious. Tenant advocates say the practice hurts renters who get evicted when buildings convert to tenancies in common, the step before going condo. Previous proposals for increased condo conversions have failed miserably.

Supporters say the sour economy could change the dynamics this time around.

"What's different this year is that the city is in such a financial hole, this is a way to help," said Mike Sullivan, board chair of Plan C San Francisco, a moderate civic organization that supports the idea. "If all the city did was grandfather in the 1,500 people waiting behind the lottery, just doing that would help the city's budget."

Supervisor Sean Elsbernd, the proposal's instigator, said the extra fees would directly benefit affordable and supportive housing, as a way to remediate the plan's impact on the rental housing market. [More...]

So maybe the downturn in the economy could benefit those waiting to win the lottery?

A total of 2,030 individual units are entered into this year's lottery, which takes place Friday. Also on that day, Plan C is organizing a demonstration at City Hall to protest the lengthy wait for condo conversion. [More...]

Yes, it's exciting for those TIC owners, but you can expect there will be a fight against this happening as is evident further in the article.

Ted Gullicksen, director of the San Francisco Tenants Union, said the proposal ultimately would hurt renters.

"We need to preserve our rental housing," he said. "The easier we make it for tenancies in common to become condominiums, the more TICs will be created. The larger issue is that people are creating TICs to get around the condo conversion law" that provides more tenant protections.

Miguel Wooding, executive director of the Eviction Defense Collaborative, agreed.

"The condo conversion law has been around for a long time and has been an important protection for preserving rent-controlled housing stock," he said. A one-time mega conversion "sets up expectations of the possibility of increasing TIC conversions in the future. You have an increased motivation to increase evictions (to create TICs) if you have that possibility."

So all you Tic owners, it's time to join Plan C (you can even join for free) and start marking your voice heard on this issue. I used to hear that the back log on the lottery system was 12 to 15 years, but lately I hear that it's estimated at between 15 to 20 years. This could be a real opportunity!

Individual Tax Bills for Tenancies in Common One Step Closer

As we first reported back in September of last year (courtesy of the 'head's up' from Gordon over at Plan C), it looks as though Phil Ting from the San Francisco Real Estate Assessor office is looking to make good on his offer to help clarify the oft confusing, record keeping nightmare facing many Tenancy in Common owners come tax time.

As it stands, there is one stunning tax bill sent out to all Tenancies in Common, regardless of how many individual units exist within the TIC, or how long the TIC has been in existence. That tax bill, in it's simplest form, is split by the individual owners based on their percentage of ownership of the Tenancy in Common. The trick begins once an owner sells, or remodels - thereby triggering a reassessment (aka increase) in property taxes - the increased portion of the tax bill then becomes the responsibility of the offending owner whether they are the new kid on the block or someone looking to update.

Now, take a six unit TIC that's been around for oh, I dunno, say 10 years, which has seen several resales, a few remodels, and voila! - Dante's Hell of accounting.

To stave off any confusion, Ting plans to send out notices in July to all known Tenancies in Common, along with the yearly notice of assessed value, clarifying the city's policy on separate assessments for TICs and how to request one. It's important to note that simply getting a separate tax bill does not exclude every owner of the TIC partnership from being liable for both their share as well as the whole, in the event one owner falls behind. Thus reiterating the importance of a great TIC agreement and reserve account.

S.F. may clarify TIC units' tax liabilities [SFGate]
Calling ALL Tenancy in Common Owners [SFHomeBlog]
Mapping San Francisco's TICs [SFHomeBlog]

Don't miss rally to support condominium conversion reform on Feb. 6th!

San Francisco will hold its annual condo conversion lottery one week from now, on Feb. 6th - if this is of interest to you,  you might want to show up and let them know that this outdated lottery method unfairly penalizes first time homeowners.  Join organizers Plan C and the SF TIC Coalition at this rally to support condominium conversion reform.

Peet's coffee will be waiting for you, provided by Plan C, as well as petitions for you to sign to let the City know that you are in favor of reforming the lottery process. Meet us at the steps of City Hall at 8:15am to enjoy your coffee and sign the petition, then just a little before 9am you'll head to the Board of Supervisors' offices to drop of the freshly signed petitions requesting condo conversion reform...then on to Room 400 where the lottery will be held.

So many are waiting for the good news that you have "won the lottery", but the sad fact is that only 200 "winning" units are chosen each year and it could take many years, perhaps more than a decade, for your building to "win". The odds are just getting progressively worse and are definitely not stacked in your favor. In 2003 there were only 994 units, climbing to 1736 units in 2007 - that's an average of just 186 unit increase per year, definitely not coming anywhere near close to keeping up with our housing demands.

Plan C is opposed by those who think that condo conversion reform would increase evictions and lessen rental stock. Those supporting Plan C have alternate opinions. San Francisco passed a law in May of 2006 which banned all condo conversions in buildings with more than one "no fault" evictions or in buildings with "protected" tenants. This legislative act pretty much negates what opponents of Plan C most fear. 2007 eviction numbers were down significantly over 2006, and are down over 60% from the numbers recorded in the late 1990s - this proves the opponents wrong.

7770 units, according to the San Francisco Business Times, were under construction in 2007 and expected to be completed by the end of this year. This number includes 2052 rental units, 717 of which are classified as "affordable".

Now is the time to make a stand and fight for rights of first-time homeowners. We need condo conversion reform and we need it now. TIC owners need to do their part and show up on February 6th at 8:15am on the steps of City Hall - we can "fight City Hall" and win, if we are organized and do it together, it will only take an hour - join us!

Whether or not you can attend on Wednesday, please click this link to email all of the city supervisors and Mayor at one time and let them know that you are for Plan C and condo conversion reform!!!