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San Francisco Supervisors Make Major Changes to Housing Laws During the Most Recent Month

December 18, 2013

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In Reacting to Perceived Negative Effects on Rental Housing From the High Tech Boom, San Francisco Quickly Enacts Laws Which Further Restrict the Flexibility of Residential Properties Owners, Large and Small

In the wake of many recent newspaper headlines about the negative effects of the local high tech boom (focusing on a 14% to 16 % increase in residential rents and the rising number of local residential evictions), the San Francisco Board of Supervisors has taken a number of actions in the last month that affect at least 75,000 apartments in the City. In a move that affects only San Francisco Housing Authority units, priority for occupancy of newly vacant units will now go to persons who have been evicted under the Ellis Act who have lived in their rental unit for at least 10 years, or 5 years if they are disabled. In a second new law, the Board of Supervisors has passed legislation (in a first reading) that will practically eliminate the merger of two or more units in one building to create family sized housing, a procedure which for many middle and lower income persons has been the only way to afford extra space for the habitation of new children and elderly family members (since single family homes are so expensive and hard to find). The legislation states that a property owner would be barred from merging a unit for 10 years after evictions other than owner move-in evictions, and for owner move-in evictions the time period an application would be barred is five years. The legislation would require each such merger to go through a Planning Commission hearing (some do not today); and that the Planning Commission will focus for the first time on (1) whether replacement units will be provided for units that were designated as affordable or are subject to rent control, and (2) whether these replacement units are affordable. Many property owners are angry that there will be no exemption for owners who evict tenants so they can move into their own home, and they believe that this will in fact punish lower and middle income wage earners and not just real estate speculators. The legislation is not final at the time of publication of this Newsletter.

To encourage the preservation of smaller units and to allow them to expand to house additional persons, the Board of Supervisors has approved (at its first reading) a law to allow certain "non-conforming" units to be improved to extend their useful life, despite existing law to the contrary. This has been difficult in the past for close to 52,000 of the approximately 360,000 units in San Francisco because the Planning Code prohibits the “expansion, alteration or reconstruction” of nonconforming dwelling units. A building containing units exceeding the number of units per lot under today’s Code is considered a building containing nonconforming units. These units are usually found in older buildings constructed before the limits on density went into effect. Under the pre-existing law, an owner had to designate which unit or units in this kind of building should be counted as “nonconforming”; once that was done, current law prevents those units from expanding, from being altered, and from being rebuilt even if they were at the end of their useful life. This often meant that these units became poorly maintained or abandoned because property owners were not allowed to improve and expand these units.

The new law amends current law to allow the expansion, alteration or reconstruction of a unit in a building that exceeds the permitted density if the unit is located in a residential zoning district. The legislation's intent is to provide more flexibility and encourage property owners to improve their units. So although new laws will greatly restrict the ability to merge a unit into an adjacent unit, this law allowing improvements to nonconforming units will make it easier to merge an existing unit into adjacent space which is not a dwelling unit, including space used as storage, as hallways, as garages, or any area that has no kitchen or full bath (and thus is not a legal unit). One example is a bedroom that is a guest room available to the entire building and not part of a unit. Thus, this new law responds somewhat to concerns that the new law mentioned above, the one that makes unit mergers practicably impossible, completely restricts unit improvement and enlargement that would allow for extra bedrooms for families. The legislation also would have the effect of extending the useful life of the smaller and thus more affordable units by not restricting alterations to upgrade and improve. One expects that a number of basement areas will become additional living space. There may also be conversions of laundry rooms and garages and building manager offices into space that is part of an existing nonconforming unit.

However, in order to address a concern that improvements would reduce the affordability of these units and would negatively impact neighbors, the legislation was amended to prohibit improvement work from extending beyond the building envelope as it existed on January 1, 2013.

Moreover, in line with the political backlash against evictions, the legislation was also amended to prohibit the expansion, alteration or reconstruction of any nonconforming unit that was the subject of certain tenant evictions. The owner of a unit in which a tenant was evicted after December 10, 2013 under the "owner move-in" provision of the Rent Control Ordinance could not take advantage of the legislation for 5 years following the eviction. For example, if an owner move-in eviction occurred on December 11, 2013, an owner could not take advantage of the legislation until December 12, 2018. Further, a unit in which a tenant was evicted after December 10, 2013 under the other "no fault" provisions of the Rent Control Ordinance could not be improved under the legislation for a period of 10 years following the eviction. On December 13, 2013, the Board of Supervisors approved this legislation at its first reading.

For more information, please contact:

M. Brett Gladstone

415-995-5065 Direct Phone
415-995-3517 Fax

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