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Tuesday, August 3, 2021

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UncategorizedSF planners decide it's just fine to demolish rent-controlled...

SF planners decide it’s just fine to demolish rent-controlled housing

48hillswreckingball

By Tim Redmond

It’s not, by San Francisco development standards, a terribly big project. It’s not in the Mission or Soma, ground zero for development battles these days.

The Planning Commission chambers Sept. 4 weren’t packed by supporters and opponents. The hearing, tucked deep in a meeting that lasted more than eight hours, was relatively short.

But the commission was sharply divided over the proposal, for the construction of six large residential units at 395 26th Avenue, in the outer Richmond – and the 4-3 vote in favor was directly in defiance of city policy and the mayor’s directive regarding the preservation of existing rent-controlled housing.

It was a remarkable statement of priorities, based on what project opponents called misleading information from the developer, and showed how the Planning Department and the commissioners who oversee it are willing to ignore very clear rules to satisfy the needs of a profit-driven builder.

As one commissioner noted, it set a terrible precedent that could have dangerous implications citywide.

Gabriel Ng & Architechs Inc. wants to build two new structures on the large corner lot at 26th and Clement. Each building would have three units, with three-bedrooms each. The project sponsor argued that there’s a need for family housing in the city, and that six new units, which most likely would be sold as condos, would help the crisis.

But to make room for one of the buildings, the project calls for the demolition of an existing apartment building with two smaller rent-controlled units. And that’s something the city isn’t supposed to allow.

In fact, when the mayor with great fanfare issued his housing directive in 2013, he made it clear that demolishing existing rental housing should only be allowed in unusual circumstances, “with special attention paid to preserving existing rental stock.”

In the past year, the Planning Department has repeatedly refused to approve projects that involve a loss of rental units. In July, a proposal to merge two small rental units into one larger apartment was rejected by planning staff because “the mayor has directed the Department to adopt policies which encourage the preservation of existing housing stock.” Same with a case at 812 Green Street; the planners said it wasn’t okay to merge two units into one because preserving existing rental housing under rent control was the city’s highest priority.

You can't get rid of rent-controlled housing, the Planning Dept. says -- unless you can
You can’t get rid of rent-controlled housing, the Planning Dept. says — unless you can

The developer’s lawyer, Alice Barkley, argued that the two existing housing units, which have rent-control protection, have been empty for 20 years. If they were rented out, she said, it would be at market rate.

Not so, said one neighbor testifying at the hearing: “There were tenants in that building, and they were paid to move out,” the neighbor said. “They are not imaginary tenants.”

Steve Williams, attorney for some neighbors who opposed the project, told me that the former residents were students from out of town who were “thrilled to be paid to move.”

Whatever: The existing units could be rented at market rate, but would from then on be covered by rent control. And in fact, if the developer wanted to build on the lot, Williams said, the existing building could be preserved and expanded – and the new units added on would be rent controlled.

In his testimony, Williams said that the fact that this project had even gotten to the commission level with a positive recommendation showed “the tone deafness of this department.” San Francisco, he said, is mandated to protect existing affordable housing. Tearing down rent-controlled units for high-priced condos “is not in the policy,” he said.

Commissioner Mike Antonini, who generally supports any kind of development, said the project makes sense because it will add to the net number of units, and bedrooms, in the city. “At some time in the past there were tenants, but recently it’s been owner occupied,” he said – again challenging the suggestion that the units were vacant for 20 years.

Rich Hillis, who like Antonini is an appointee of the mayor, argued that Lee “wants to preserve housing but also to build new housing.”

But Commissioner Kathrin Moore noted that “the demolition of rent-controlled housing is a huge concern, and has to stay dead center in what we talk about. The overall development pattern sets a bad precedent.”

The new condos, she said “are high-end units not affordable at all.”

And that, of course, was the point – if you can get tenants to move out of rent-controlled housing, then call it vacant and demolish it to build condos, in a small corner of the Richmond, then you can do it anywhere. Which is a scary concept.

 

And, because city law mandating that new condo projects set aside some housing as affordable doesn’t apply to buildings of fewer than ten units, there will be nothing to keep any of the units below the high prices that new housing commands in this city.

Antonini even suggested that the developer might agree to set aside one unit for sale at below-market rate – but that went nowhere.

So after a lot of wrangling and discussion about parking (which was by far the least important issue on the table) the commissioners voted 4-3 to allow the demolition of two rent-controlled housing units.

Voting in favor – and against the mayor’s own stated policy – were all four of the mayoral appointees: Antonini, Hillis, Christine Johnson and Rodney Fong. Voting to save the housing were Moore, Commission President Cindy Wu, and Dennis Richards –all appointees of the Board of Supervisors.

Williams said his clients are considering appealing this approval to the Board of Supervisors – which would make sense. Because if the city has a policy of protecting rent-controlled housing units, somebody beyond a developer-friendly Planning Commission clearly needs to weigh in.

Tim Redmond
Tim Redmond has been a political and investigative reporter in San Francisco for more than 30 years. He spent much of that time as executive editor of the Bay Guardian. He is the founder of 48hills.
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44 COMMENTS

  1. Logic from BOMA S.F going build class A towers increase, workforce along compensations. City Hall going to protect whom? Cindy Wu has resigned not unkind S.F Planning Dept, relevancy economic imbalance factor reverts. Prop C,A and K only factors of retaining housing immediate,
    downtown implose become dynamic market cap. Arena equivalent to London,NYC,Hong Kong,Paris and Berlin Scott Wiener,David Chui and London Breed. Next mayoral candidates of
    2020 whom continue “gentrififed policies remember sold San Francisco “highest” yield city rent controlled units. Question going use need destroy “status” new income brackets since ratio of
    affluent due “global trade” 40% simply increase. Wage of residents is battle thanks Ed Lee! Global firms decide invest selected industries yes, hiring is abundant rent controlled units? Dilemma for some no fun local is situation,guilt SFMOHDC inquire about renters rights!

  2. Most BMRs have finite lifespans, 20-55 years, because the exaction for affordability must avoid perpetuities.

  3. Frank,
    Rent control doesn’t work. Permanent affordability through BMR’s does. Rent control units that are currently for rent are being rented to rich people. There is no means testing. The city needs to convert its rent control stock to permanent (20%?) BMR.

  4. Unjust decision made by the planning commissioners. The city of San Francisco should be preserving rent controlled units not allowing demolitions. Once a rent controlled unit is torn down it is lost forever.

  5. Sam – the claim that there were and are no tenants is false. There are people living there as I sit in my own home. My point was the owner testified in writing SHE personally lived there. Which is false.

    Both units of the building are occupied. Had they been paying rent rather than being paid to be there and the commercial unit be leased, they building would be turning a profit already. This project amounts to nothing more than GREED. And NO, I cannot fathom how anyone can truly be so overwhelmingly so when they have so much already. Then again, the more most have, the more they want. Too much is never enough.

    And if you couldn’t afford to purchase the building at 1.1 million, I don’t know how you suppose you can afford a brand new luxury 3 bedroom condo, which will, no doubt go for no less than 2 million. It would be interesting to know what you were promised out of this.

    And I do grasp the concept of supply and demand. And I see an increasing number of livable housing both rent controlled and market rate being removed from market. Or should I say removed from the availability of person’s who wish to occupy them and purchased from individuals who do not live in this country, as Tommy was mentioning above. I meet people daily who have “new neighbors” from Saudi Arabia, China, or wherever who just purchased the hoe/condo next door to theirs simply to have a retreat. While also meeting folks who commute hours back and forth to get into the City for work. I get it.

    I also see buildings, like the one next door, which was recently renovated, former tenants booted in order to make way for a monster building that does not suit the neighborhood and the working class cannot afford. SF is only so big. Even in Manhattan, there came a time when they realized everyone couldn’t fit and people migrated out. Oakland could use some funding.

  6. No, G, because State law always trumps local law.

    In fact, it is precisely because cities like San Francisco went too far with local rent control ordinances that state laws like Ellis and Costa-Hawkins were passed in the first place.

    You either need to change the law in Sac or else get SF to secede from the State. Good luck with either.

  7. The lot in question has a unit density limit of 1 unit per 600 sq ft lot area. At a parcel area of 4,300 sq ft, that means there’s a hard cap of 7 units. I don’t believe this limit can be waived.

  8. Rarely see real facts brought about ‘affordable housing’ in the arguments, from both sides. Yes, increased density for the top 10% does NOTHING for the middle class and working class. But there are also some points the ‘left’ should be bringing up….though I think I am talking about ‘liberals’ and not a real left, since I have not seen Obama’s neo liberal policies blamed once in any bay area anti gentrification article.
    1)This is a FIRE sector bubble. This is NOT limited to tech or SF. Over 30% of for sale homes in oakland years ago were bought by hedge funds and PE. Over two trillion by chinese investors alone on property sales in the USA, and even more by Canadians and etc. Because of FED policy of cheap hot money. Obama, following bush and greenspan policies has plunged over $12 trillion (not a typo) into the market via the too big to fail. . QE meant our own govt has bought over a trillion dollars in RMBS. (not a typo).

    2) during any kind of job bubble in any city since WW2, there was NEVER money available to build affordable housing for the working class. We occupied old stock, and in very cramped dense style. Fed money and state money alleviated some strain. but cities on their own. NEVER.

    3) Private developers have NEVER satisfied one bit of affordable housing in boom times. I really think not ONE person in the bay area, liberal or right, has read one goddamn book on the history of cities, except Jacobs Death of. A book that is ‘fun’ to read, but really has no use when discussing funding, segregation via FED policy, contract selling, etc. Nor even took the time to download PDF files and actually examine housing crowding (for example, during ww2 in Oakland -it was horrible!). Private developers have only built working class housing in cities with massive govt money and mortgage backed funding. Workers have ALWAYS MOSTLY got by on OLD stock. When that is taken, via gentrification, ‘negro removal’, or outright leveling as in SOMA for a convention center…(or sports center, casino etc in other cities) …there is NO municipal fix.
    It has to be Fed or state….or in the case of the future when this bust happens…..outright seizure of unoccupied buildings. That is what we should be planning right now. Because this bust is going to be even bigger and more global.
    For one suggestion, go to the site nakedcapitalism.com and Wolf Street by wolf richter. Or read Family Properties by Satter, Urban Crisis by Sugee…or visit Michael Hudson’s site. There are a wealth of other books and ‘honest economists’ including Pam Martins, Nomi Prins etc that predicted the last bubble and are saying not this is the bigger horrible bust.
    Our federal govt did not react or fix things but made them worse. When the ‘liberal’ party throws even the middle class under the bus, it is time to get a bit more radical and quit begin the rich.
    Probably should stop arguing with them to……..Look at what they say on Socket site sf!! greedy hateful bastards.

  9. Helen, I suspect that who you regard as the troll here is highly dependant on your own personal biases.

    “Troll” is a near useless term usually employed by someone who knows they are losing a debate.

  10. Again, I disagree. Examine these two (admittedly extreme examples).

    First, Aspen. Massively unaffordable, with many residents spending only a few weeks a year there. And yet the large number of low-paid service workers there all seem to have a place to live, and seem happy with their deal. Everyone wins, and the city has sound finances.

    Now take Detroit – a city that worships its poor and punishes anyone with money. The successful leave town, leaving a town with a dwindling population, crumbling infrastructure, a massive crime rate and of course which is not in Chapter 9 bankruptcy.

    And you’re saying we should follow Detroit and not Aspen? We need the prosperous and the successful. What we do not need is a vast underclass who bleed the city dry.

  11. Yes. Let’s continue to promote a failing economic class system that is skewed primarily to those with money at the ongoing expense of those without lobbyist and economic clout – that is text book classism Sam.

    if you want to enlarge the tax base let’s help those who will contribute more long term than those here for the modern day gold rush. Poor people/working poor and middle class SFians tend to stay put and consistently add to the economy while boom/bust newcomers follow the cash to the next town when the booms bust. This is historically evident from the City’s up and down economy since the 1800’s. Those who stay behind continue to provide all the cash needed to make the City work. Want them to contribute more? Insure housing. A safe place , affordable space is the number one ingredient to improve a persons living condition.

  12. man, a lot of the people commenting on here don’t even have the most basic understanding of supply and demand – and seem to really only exist to grind their own axes about how SF should do nothing but support the lowest rungs of society at the expense of everyone else.

  13. The claim was not that the building was vacant but that there were no tenants.

    Or are you suggesting that a building owner should not live in the building that they own?

  14. Karen, can you really not understand why NOBODY would ever want to build a new home that would be rent-controlled?

    Really?

  15. Eric, you are obviously not a landlord and therefore fail to understand how landlords think.

    There are many landlords in SF who, like these owners, refuse to re-rent a controlled unit when a vacancy arises. And this can happen even where there is no speculative intent, such as when the other units in the building are still occupied.

    The city cannot control the formation of TICs and so that is always an option for a property owner who is sick of dealing with rent control.

    And, by the way, if you actually speak to some landlords, many will tell you that the real problem is not the control of rents so much as the total lack of control over who lives in your building and for how long.

    That is why thousands (perhaps tens of thousands) of controlled units are held vacant in this city. almost no non-controlled units are, however, and that should tell you something.

  16. No, Eric, I never said some people were more than others important to me. I said that the city’s policies inevitably consider the relative worth to the economy and taxbase of different classes of people.

    Because without those who give more than they take, the city cannot support those who take more than they give.

  17. A false threat which is always trotted out to justify pushing rent control aside. Where rent control is steadfast and not endangered, landlords rent out their housing stock; low as the rate of return may be, it’s still a way to make money from their capital. It’s only when they smell the profit of potential deregulation that they threaten to hold back from renting. The real problem with rent control is that it’s incomplete and therefore provides unequal advantage to those who arbitrarily benefit from it.

  18. “those SF residents whose work is most important and valuable to the city, and its taxbase”? Seriously? To you some people are worth more than others because of what they do for work? I hope there are not too many who feel the way you do about that. I don’t want to live in that world.

  19. BTW – the married couple who lived in the 2 bedroom at 395 26th Ave, – did not even KNOW it was rent controlled. They were paying 2100 per month for a 2 bedroom with parking. Both just acquired Master’s from SF Art Academy and were looking forward to starting their careers here in the City.

    And per affidavit, the building is NOT vacant, the present owner claims she resides in the building.

  20. My neighbors were forced out of their rent controlled home. They did not wish to leave. They did not understand they did not have to go in order for the building to be sold and took the money and ran. The elderly man downstairs, however, fought and was literally thrown out onto the street. His property was strewn down 26th Avenue.

    It foolish for anyone to think this demolition is contributing a damn thing to the housing market. This property sold for 1.1 million. If the individuals the developer paid to chirp before the Building Commission couldn’t afford the property as it stands, how do they propose they can afford a brand new 3 bedroom luxury condo? It was a scam for one single developer to make as much money as possible out of one single lot.

    And this case goes beyond rent control – the Commission allowed them more variances than any of us individually would be afforded on a single family home.

    We requested an additional 4 units to be added to the original structure, which would then make them ALL rent controlled and the Commission denied. We had several different plans which would have made this both profitable for developer and healthy for the Community.

    I am the immediate neighbor. This aberration shall tower 4 stories over my home, 3 stories above my front neighbor, 2 stories to my northern neighbor and knock the lights out of a quarter of the block.

  21. changing the city’s rent ordinance isn’t the problem so much as changing the State’s Costa-Hawkins law, which also protects single family homes and condos from rent control.

    That’s not gonna happen.

  22. Wrong, Russo. Ellis evictions affect only a few hundred tenants each year. In the entire history of Ellis (30 years) less than 1% of SF tenants have been affected by it.

    Whereas thousands of tenants vacate each year through at-fault evictions and voluntary move-outs. And when they do, oftentimes the property owner does not re-rent even though he or she could get a fat market rent.

    Think about why that might be.

  23. “For all the furore about Ellis evictions, they affect very few people overall. There are far, far more cases of natural turnover…”

    Jesus, Sam/John, everyone who reads that knows it’s a lie–yourself included. Ellis Act abuse is epidemic, well documented and must be stopped.

    Try dressing up your propaganda by twisting a few actual facts at the very least.

  24. The city’s Rent Ordinance contains a provision when it was enacted that clearly states that any new homes built after the date of its enactment are exempt. This was to ensure that developers would still build rental housing – otherwise they obviously would not.

    Subsequently a state law was passed that prevents any CA city from imposing rent control on any units that formerly was exempt.

    These two laws taken together ensure that the number of rent-controlled homes in SF will always decline in number.

  25. I think what most are missing here is that the property is now vacant and will NEVER be occupied again by (rent controlled) tenants. The horse left the barn a while ago. There are no affordable units to preserve unless the Land Trust wants to compete at market value with TIC developers.

    The best suggestion I’ve heard to date is to provide the owner with the ability to build two additional units (BMR’s). Everybody wins.

  26. How will that benefit SF Families? 395 26th Ave is currently appraised at $1.5 mil; with 6 units at, say, the low end of $1.4 mil, that is an increase in property appraisal of at least $7 mil. That means an extra $76,000 EVERY YEAR in increased tax revenue for San Francisco, money that could be used to support at least 2 families that are truly in need.

    Simply, the choice is between:
    A. 6×3 bedroom homes // $92,000/yr tax revenue
    B. vacant lot + 2 smaller housing units + marginal commercial space + $16,000/yr tax revenue

    Apart for the two households that randomly fall into the existing units (who likely will not be in any way “in need”) and benefit from the implicit rent control subsidy, what would B do for the other 837,440 San Franciscans?

  27. And that remains true even if eventually all those units are vacant or owner-occupied because no sane landlord would ever want to deal with rent control and the risk of lifetime estates?

    Really?

  28. The only way to protect affordable housing in San Francisco is to keep what we have now because there will never be any less expensive housing than what we have now. All new projects will start at higher rates and climb from there.

  29. It is well known that if the units are vacant you have a small chance of getting the demo permit. Ultimately this is a good thing since it’s tripling the amount of housing on one lot. Maybe instead of opposing the project all together there could be a push for 2 units be city subsidized for low income families? Or remain rent controlled? Problem is if they were to remain rent controlled they would NOT be affordable, merely just remain rent controlled at a market rate.

  30. mofoplz, you assume there that the purpose of SF’s housing policy is to serve “the most in need of SF families”.

    I disagree. That may be the purpose of the city;s social services or welfare policies, but it is not the goal of SF’s housing policy.

    Rather, the main purpose of SF’s housing policy should be to ensure there is enough housing for those SF residents whose work is most important and valuable to the city, and its taxbase.

    Building homes only for low-earners and the unemployed will be a net cost to the city, while providing no homes for those who build economic success and prosperity for the city.

    You have to take care of those who pay the bills first, and then and only then worry about those who consume spending, subsidies and welfare.

  31. +1 to what Sam said.

    @mofoplz, the families that ultimately occupy these six units will not be competing for other available rent controlled housing when it becomes available. Reduced demand = lower prices, so it is possible for everyone to win even when new development isn’t specifically constructed to be affordable. The reality is that it is very infeasible to build affordable housing at any scale. As it stands, even high earners pursue aged / poorly maintained rental units that in any other context would be “affordable” but currently aren’t for lack of choice.

  32. Six new homes yes – but who’s average cost would be – according to City and real estate figures of condo sales for the last fiscal year – $1.4-$2.2 MILLION – the market has increased since those figures so we could see a 10-14% jump overall. How is that serving the most ‘in need’ of SF families? Why doesn’t the Mayor take some of his war chest of funds he’s collected from developers not wishing to add BMR units into their new high end builds and construct a public housing or bar build instead on this property? Matter of fact why isn’t the Mayors Housing Fund being used on every available space in the City right now?

    Thanks for keeping up on these stories Tim. You and 48 Hills seem to be one of the few news sources holding anyone’s feet to the fire regarding policy violations and an obvious tilt of City approvals in favour of the super rich and always powerful lobbying developers.

  33. Suspend your obsession about the city never losing a rent-controlled unit ever, just for a moment. And think instead about the fact that the real problem is a lack of housing. Then suddenly this demolition and rebuild makes sense in terms of the city’s housing policy. Six new homes are created that are big enough to house families, in place of two smaller units that have been vacant for a long time, and likely will never be re-rented again (precisely because of rent control, of course).

    You are demonstrating the tragic triumph of ideology over practicality. You’d actually rather have two vacant homes than six occupied family homes. In other words, you don’t care about the six families who would be housed by this project, and only about the principle that a home that will never again be rented out should theoretically remain under rent control.

    For all the furore about Ellis evictions, they affect very few people overall. There are far, far more cases of natural turnover (at-fault evictions, voluntary move-outs etc.) and those are the units that are being held off the market like these two homes.

    Why? Because of rent control – the very policy you support. You quite simply do not see how your policies make the SF housing problem worse, do you?

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