The Agenda, April 17-24: Planners and developers, Free City College ….

... and finally, a crackdown on Owner Move-In evictions. We look at the week ahead

The San Francisco Planning Department has never really been about planning; in the 35 years I’ve been in San Francisco, it’s been driven by meeting the needs of developers. Planning means setting out an agenda based on what the city needs, and inviting the private sector to decide whether it wants to participate (being fully aware that sometimes land won’t be built to its “highest and best” use, that profits and investor returns may not be maximized, that growth might slow down, and that some parts of town may be preserved for low-cost housing and businesses that can’t pay tech-office rents). In this city, developers set the growth-driven agenda, and Planning responds.

Sup. Jane Kim succeeded in winning free City College -- and now it's time to enroll!
Sup. Jane Kim succeeded in winning free City College — and now it’s time to enroll!

So I shouldn’t be surprised that the Planning Department staff has come down pretty much 100 percent on the side of Sups. London Breed and Ahsha Safai on the battle over affordable housing.

Planning released a report last week that looks at both the Breed-Safai bill and a competing measure by Sups. Aaron Peskin and Jane Kim. It’s supposed to be a neutral analysis that gives the Planning Commission some direction.

But from the start, the report bows down to the developer world, talking about “maximum economically feasible” alternatives – that is, everything is based on the idea that our policy must allow private developers to make the type of returns that they are now seeking in a marketplace where luxury housing in cities is exceptionally lucrative.

The Breed-Safai version of two competing bills is far more developer friendly; it would allow the folks who make a fortune building market-rate housing in San Francisco to make even more money.

And that’s done in the name of creating housing for middle-class people.

We have examined this in some depth, so I won’t go into the details, except to say: If you allow developers to claim housing is “affordable” when the subsidized rents are not far from market-rate, you are giving them a huge financial windfall.

I’m not saying the city shouldn’t mandate affordable housing for middle-class families. That’s the segment of the market where we are falling the furthest behind. We can fix that.

But the way you do that is to tell developers that about 50 percent of their new units should fit into the middle-class category, not 10 percent. If that means a few of them back off from their projects, fine – others will come along. And remember, at 25 percent affordable housing, the city actually loses ground in the housing game.

The city controller has looked at the question of how much developers can pay, and concluded that “economically feasible” means that a project has to return far more than most other investments these days. It’s not about whether the project will make a profit; it’s about whether that profit is higher than what speculative money would make in some other vehicle.

This is, of course, the wrong question.

The report is just a series of recommendations to the Planning Commission, which will then make recommendations to the Board of Supes, which actually gets to decide. But the report makes clear that Planning staff worked closely with the Mayor’s Office of Housing on the recommendations, so I think that says where Mayor Ed Lee is on all of this.

The measure comes before the Planning Commission April 27.

 

It’s been a tough battle almost from Day One, but supporters of City College have pulled it off, and as of next fall, the college will be free to San Francisco residents. That’s right – if the cost of tuition was or is an issue for you, you can now take classes for nothing.

And if you support this civic institution, taking a class is a great way to show it. “The best thing you can do for City College right now is to enroll and take a free class,” College Board member Tom Temprano told me.

Add Board member Rafael Mandelman: “It’s a great time to enroll. City College is free and has amazing course offerings.” You can find a list of upcoming summer classes here.

The school’s holding a citywide set of open houses Friday/21 from 9am to noon at every one of the campuses. Faculty and administrators will be on hand to help you through the enrollment process.

 

The supes are beginning the process of cracking down on owner move-in evictions, a longtime problem that’s only getting worse. The law says that the owner of a housing unit has the right to move in, and evict the current tenant, if they or a close relative wants to occupy it. The problem is, of course, that once a tenant is gone from a rent-controlled unit, the landlord can simply re-rent the place (at a much higher price) to somebody else. And the city never checks.

That’s right: Nobody ever follows up to make sure that the landlord actually moved in. So abuse is rampant, as a Channel 4 investigation last fall showed.

The only way a tenant can get an recourse is to do their own legwork (which is hard, after you’ve been evicted and probably moved away from the city) – or to hire a lawyer who can sue if the eviction was fraudulent.

That’s possible, Mark Hooshmand, a local tenant lawyer who has won some big unlawful eviction cases. “You can come to us, and we will hire the investigator for you at no cost,” Hoosmand told me recently.

The potential recovery can be in the hundreds of thousands of dollars.

But there are thousands of these evictions, and even if every tenant lawyer in the city had the resources to go after them full time, some landlords would still get away with it.

And if you sue, you get some money – but the landlord faces no other penalties for breaking the law.

It’s hard to crack down; the District Attorney’s Office says a prosecutor would have to prove that the landlord intended to cheat the tenant (as opposed to, say, just changing their mind after living in the place for two days and moving out again.)

So both Sup. Mark Farrell and Sups. Jane Kim and Aaron Peskin have introduced legislation that would require follow-up monitoring – and impose criminal penalties on scofflaws.

The Farrell measure would mandate that landlords sign a statement under penalty of perjury confirming that they are moving into the unit; that would allow the DA to file charges more easily.

The Peskin-Kim bill also mandates a sworn statement, and requires a landlord to file annual reports for three years showing that they are actually occupying the place as a “principal place of residence.” A landlord who does an OMI eviction then rents out the unit at a higher price than the previous tenant was paying would be guilty of a crime.

I suspect that the board will pass a version of one of these bills, since nobody can honestly say that landlords should be allowed to violate city law with impunity.

It raises another question: Why doesn’t the Rent Board have a staff of investigators who go out and check for landlords who break the rules? A follow-up visit from a city inspector every three months after an OMI would make it even harder to profit from this scam.

If you apply for a building permit, the Department of Building Inspection is supposed to check out the place after the work is done to make sure it’s up to code and in compliance with that the permit allowed. Why can’t the Rent Board do the same thing? Why does the burden fall on an evicted tenant?

I’m sure we could fund that program with a modest fee on every OMI. Worth considering.

Full disclosure: I am a regular guest lecturer at City College.

  • playland

    But there are thousands of these evictions

    Just as an FYI, the truth is that there were 397 such evictions notices last year, 417 the prior year and 343 the year before that.

    http://sfrb.org/annual-eviction-reports

    • 4th Gen SF

      Please see my comments in a separate post above yours. Would love to know what you think.

      • playland

        Well yeah, if there are about 400 OMI evictions a year and you want to do an on site visit to each one and a person can do 4 a day then you are talking about 100 work days or perhaps 1/2 a FTE.

        • Don Sebastopol

          I suppose they could throw in all no-fault evictions, including rehabs, and keep one person busy. How that would make any difference in the market price is another matter. These evictions are a drop in the bucket. And I think many more rentals have been than lost due to Ellis/OMI. Also landlords intent on cheating will just find some other way to beat the system.

          • curiousKulak

            No, Don, that’s why he wants a visit every 3 months … to justify a $150k FTE (including benies).

          • playland

            If you read the article he wants ‘a staff of investigators’.

            The bad actors should be caught, but the concept that you move your mother into an apartment that you own and she then gets a knock on the door every 3 months from the government. I guess if you idolize the Soviet Union in the 1960s…

          • 4th Gen SF

            California is Venezuela of the USA. The only thing keeping us from actually becoming Venezuela is Tech. But if Tech flounders….it’s going to be bad.

          • Don Sebastopol

            The benefits do not justify the cost of even 1 FTE.

          • curiousKulak

            I didn’t mean the FTE would *be* a benefit – only that they would *cost* for benefits.

            Anyway, this fits into the mold of many City agencies required to do “annual inspections”of various sorts.

            Just another jobs program, starting at about a million per year.

  • 4th Gen SF

    Welp, I just watched the channel 4 “investigative report” linked in this article by Tim. And…here’s the stats from that report

    413 OMIs happened
    Channel 4 investigated 300 of them
    They found 24 new people.

    I’m not sure that 24 people warrents the expense of another labor intensive department funded by taxpayer dollars.

    • curiousKulak

      But were those 24 “new” people cheaters, or was there a reasonable (and legal) explanation?

      Or was that too much work?

      • 4th Gen SF

        Channel 4 did not say.

    • Don Sebastopol

      I agree, there are no benefits that would justify the expense.

  • curiousKulak

    So 24 possible non-owner/relative habitants out of a 300 unit sample … we’re talking an 8% non-compliance rate (if that!, as no investigation was done as to why these “new” people were there).

    Is this a real problem? That requires a million-plus dollar solution?

    Perhaps we should treat the residency of the OMI occupant with the req’s as we do the ‘permanent residency’ of a tenant (under the 1.21 rule). Surely whats good for the goose…

  • Yonathan Randolph

    There are many errors in the inclusionary housing part of this article:

    But from the start, the report bows down to the developer world, talking about “maximum economically feasible” alternatives – that is, everything is based on the idea that our policy must allow private developers to make the type of returns that they are now seeking in a marketplace where luxury housing in cities is exceptionally lucrative.

    Tim Redmond misunderstands the Planning Department’s packet. “Maximum economically feasible” requirements means to maximize the percentage of below-market rate units. This is the opposite of bowing down to developers.

    If that means a few of them back off from their projects, fine – others will come along

    The point of the feasibility analysis is not that the developers are greedy, but that the landowner may not accept a lower offer from developers. A landowner will not entertain a lower offer from a developer than the existing use of the land. I think Tim is too sanguine with the idea other landowners “will come along.”

    And remember, at 25 percent affordable housing, the city actually loses ground in the housing game.

    No. Yet again, Tim Redmond is referring to a nexus analysis that has little connection to reality.

    The city controller has looked at the question of how much developers can pay, and concluded that “economically feasible” means that a project has to return far more than most other investments these days.

    The feasibility study in the TAC preliminary study assumed a “going-in rate of return” of 5.05% for apartment developments (rent divided by costs excluding land), plus a residual land value of $100–$120k per unit (slightly above the 2012 average land cost), which it claims makes housing “Uncertain”. If Tim thinks that housing is an above-average investment, would he be willing to put his money where his mouth is and apply a portion of his retirement into housing developments in San Francisco?
    The bottom line is that the Safai/Breed/Tang bill sets the Inclusionary Housing requirements at the high end of what is feasible under the baseline zoning according to the Controller Report, whereas the Peskin/Kim bill sets the requirement at the high end of what is feasible assuming that the State Density Bonus is always used. Since the State Density Bonus is not always possible (e.g., for lots that require a variance or have been upzoned since 1979), the Peskin/Kim bill is expected to make many housing developments infeasible.

  • Pingback: Mandelman sets up D8 showdown - 48 hills()