48hillssecondunits2

By Tim Redmond

MARCH 24, 2014 — A proposal by Sup. David Chiu to offer amnesty for in-law apartments today ran into a classic San Francisco buzz saw: Opposition to West-Side density and the prospect of tenants moving into some single-family neighborhoods.

The hearing room was packed, with dozens of residents of Miraloma Park, West of Twin Peaks, Balboa Terrace and other single-family neighborhoods denouncing the idea that the character of their communities could be changed by the addition of … renters.

“Tenants have no stake in the property,” one speaker said.

They also argued (with more credibility) that real-estate speculators would take advantage of the law to buy up single-family houses, split them into two units, and flip them. “This will drive the price of family-sized units higher,” Matt Chamberlain, the head of the West of Twin Peaks Council,” noted. “Absentee landlords will change the character of the neighborhood.”

The Chiu legislation is actually pretty mild, hashed out over months in meetings with landlord and tenant advocates and policy groups from the Tenants Union and the Asian Law Caucus to SPUR.

The law would allow property owners who want to legalize second units in areas that aren’t zoned for two-family units a way to bring them up to code and get them out of the shadows. It wouldn’t mandate that anyone do anything.

It would, however, allow some of the roughly 40,000 (or more) second units into the mainstream – and do so in a way that helps tenants as well as property owners. The new units would be under rent control – and the landlord would not be allowed to pass the costs of code upgrades along to the tenants.

And housing that is now – in the words of some landlord advocates – “flexible” (meaning that landlords can add them to or take them off the market at any time, and raise rents by threatening eviction on the grounds that the unit is illegal) would come under the city’s eviction-protection laws.

“The biggest problem with in-law units right now is that tenants get evicted,” said Ted Gullicksen, director of the San Francisco Tenants Union. “Tenants call the Department of Building Inspection to complain about heat, and then DBI issues an order to shut down the unit.”

That’s one reason the Small Property Owners association is opposed to the law: Single-family homes are now exempt from rent control, but once an in-law unit is legalized, it becomes a two-unit building and falls under the city’s rent control ordinance.

But many of the speakers opposing the legislation were simply against anything that might involve increased density. Roger Ritter, from the Balboa Terrace Homeowners, spoke about the need for “density diversity.” That line was repeated over and over: Speakers feared “eroding single-family zoning.”

Chamberlain suggested that the legislation be amended with a provision that might stop the real-estate speculators: The law, he said, should only apply to units that were occupied as of Jan. 1, 2013, and only the person who owned the property on that date should be allowed amnesty. That would certainly solve the speculator problem.

Sup. Scott Wiener, who chairs the Land Use and Economic Development Commission, asked Chamberlain whether those amendments would change his group’s position on the bill. “If we did that, would the opposition go away?”

Well, Chamberlain said, not really. “I am speaking only for myself,” he said.

There are issues with the way this law would work. For example, if a property owner goes to the city to seek permission to legalize a unit, and learns that the work required is too expensive or impossible, would the Department of Building Inspection then go forward and demand that the unit is removed? (Not easy to address, unless the division at DBI that does pre-screening for applicants agrees not to pass that information along to the division that does enforcement. The legislation was amended to include language saying DBI won’t use that information to crack down.)

Sup. Jane Kim asked how often the city actually cracks down on illegal units, and DBI officials told her that’s it’s only about 100 – and many times, that unit may be removed but then put right back on the market.

A lot of units are pretty close to legal today: The expensive part of creating a second unit is making sure the ceiling is high enough and there are windows to provide light and air. In some houses, the downstairs area is legal for sleeping; the only thing missing to create a habitable second unit is a kitchen and full bath.

And a lot of them already have kitchens and full baths. So the only cost to the landlord would be the application process – and the fact that legalizing a second unit would trigger a tax reassessment.

Chiu said that the bill would only address “what’s already happening in the city.” It doesn’t allow for new construction of units – although it might be hard to determine what an “existing unit” is, particularly if it’s not occupied.

There’s an interesting twist here. Some speakers from the West Side said that the law would conflict with Covenants, Conventions, and Restrictions – so-called “CCRs” – that exist in some neighborhoods. CCRs are private contracts that neighbors sign when they buy into a community; they aren’t approved by, monitored by, or regulated by the city.

CCRs are an old relic of times when neighborhoods banned all sorts of things, including sales to people who weren’t white. They were used, particularly, to keep Black and Chinese people out of West Side communities, until the Supreme Court banned the practice in 1963. I didn’t realize there were many left.

But apparently, there are – and these days, they ban (among other things) anything but single-family occupancy in a lot of neighborhoods. Thus: No second units.

John Gibner, deputy city attorney, said that the city’s law would have no impact on CCRs. So neighborhoods where homeowners sign those agreements would still have no legal second units. In fact, Chiu specifically amended his bill to exempt CCRs.

But there’s more going on here. Overall, there’s been an almost unspoken law in the city since World War II that density ends at 19th Avenue and on much of the West side of Twin Peaks.

The city is talking about building enough housing for 100,000 more people over the next 30 years. But almost all of that is aimed at the eastern side of the city (and a few transit corridors like Geary Boulevard), where there are existing vulnerable communities that face displacement.

I’m not a fan of Plan Bay Area, but if the city is going to grow, and density is an inevitable part of it, is it fair to make one part of town take all of that while other areas are utterly exempt? And seriously:  Legalizing in-laws that already exist is hardly a significant increase in density.

In-laws aren’t always affordable housing, but they tend to be cheaper than new market-rate housing. (In the Bayview, Sup. Malia Cohen said, many second units are rented to Section 8 low-income tenants.) And while Wiener wants to legalize new second-units in the Castro, this bill isn’t the license for new development that Plan Bay Area, with its CEQA exemptions, wants to be.

The reality is that this legislation, while controversial, likely won’t change much at all. It’s not even clear how many people will take advantage of the amnesty. “I’m not sure what the incentive would be to opt into this program,” Sup. Jane Kim said.

But I guarantee when it gets to the board, there will be pressure.

The measure was sent to the board without recommendation; Kim and Cohen said they tended to support it but wanted more information.