To: Mayor Ed Lee and San Francisco Supervisors
San Francisco Condominium Conversion Reform
Please enact needed reforms to San Francisco's outdated condominium conversion process to support affordable housing for all.
I urge you to find and support a solution to help thousands of exsisting San Francisco TIC owners who have been negatively impacted by the economic downturn AND continue San Francisco's long tradition of protecting renters.
I urge you to find and support a solution to help thousands of exsisting San Francisco TIC owners who have been negatively impacted by the economic downturn AND continue San Francisco's long tradition of protecting renters.
Why is this important?
Tenant-In-Common (TIC) home ownership is relatively unknown outside of San Francisco, even in the surrounding cities. TICs exist here because of our unique housing market which reflects local legislation, policies and actions taken by our Board of Supervisors.
San Francisco TIC owners have watched their home values plummet. However, they are not able to obtain historically low fixed rate mortgages or take advantage of mortgage relief programs because they own TICs. Instead, young families and first-time homeowners pay millions of extra dollars annually in the form of higher interest rates to their existing lenders and worry about rising interest rates because they have no other option than adjustable, higher rate mortgages. Converting their homes to condominiums would provide relief.
The lack of lenders and unfavorable loan terms make selling TICs difficult and while tenant advocates have expressed concern that converting TICs to condos bypasses rent-control, many TIC owners are restricted from renting out their properties at all due TIC mortgage and/or agreement clauses.
San Francisco holds an annual lottery to select 200 TIC units which will be allowed to convert to condos. Concerned about eroding rental stock, the Board of Supervisors placed strict controls on building eligibility for the lottery, banning buildings with certain types of evictions. These controls have been successful, contributing to an 86% reduction of "no fault" evictions over the last 10 years.
Even with the eligibility controls, the number of lottery entries has increased annually, progressively decreasing the odds of winning. This year 2,391 TIC units met the strict standards and entered the lottery. First time entrants will likely wait 12 years or longer before winning.
Ask the Board of Supervisors to act now and help existing TIC owners keep their homes affordable.
San Francisco TIC owners have watched their home values plummet. However, they are not able to obtain historically low fixed rate mortgages or take advantage of mortgage relief programs because they own TICs. Instead, young families and first-time homeowners pay millions of extra dollars annually in the form of higher interest rates to their existing lenders and worry about rising interest rates because they have no other option than adjustable, higher rate mortgages. Converting their homes to condominiums would provide relief.
The lack of lenders and unfavorable loan terms make selling TICs difficult and while tenant advocates have expressed concern that converting TICs to condos bypasses rent-control, many TIC owners are restricted from renting out their properties at all due TIC mortgage and/or agreement clauses.
San Francisco holds an annual lottery to select 200 TIC units which will be allowed to convert to condos. Concerned about eroding rental stock, the Board of Supervisors placed strict controls on building eligibility for the lottery, banning buildings with certain types of evictions. These controls have been successful, contributing to an 86% reduction of "no fault" evictions over the last 10 years.
Even with the eligibility controls, the number of lottery entries has increased annually, progressively decreasing the odds of winning. This year 2,391 TIC units met the strict standards and entered the lottery. First time entrants will likely wait 12 years or longer before winning.
Ask the Board of Supervisors to act now and help existing TIC owners keep their homes affordable.