SFAA General Membership Meeting 1/27/13
WELCOME To the first meeting of the new year…
1. CAPSS legislation pending;
A. Last week received a email from a tenant inquiring whether we had any immediate plans to do any seismic work in a particular building in lower nob hill. I was frankly surprised to see this building on the A list of was published of soft story in sfpublicpress.org
- list is preliminary/rough and done by drive by analysis
- if your building is on the list and retrofit has been done you can petition, not cross referenced with building permit history
- all buildings on the list subject to screening evaluation by either architect or engineer within one year from inception of the timeline.
- there are 4 tiers according to highest probability of risk or damage in seismic event
- Tier 1 includes all buildings mapped in liquefaction zones and/or landslide
- Tier 1 as written has the most aggressive compliance schedule: 2 years to submit copies of approved plans and 4 years to have CFC.
- We have requested that the timeframe for compliance be restored as originally drafted to 7 years….or Dec 31 2020.
- This is under consideration from the city along with a possible modification to the SF Administrative code to allow for just cause eviction allowing temporary separation of parking from the rental unit. Thus insulating the owner from being subject to the max daily relocation from AB 1925 when only the parking space is not available.
Who is going to pay for all this?
Financing: The Earthquake Safety Implementation Program Director has spoken with some local lenders; First Republic, Sterling, etc about modifying lending guidelines to allow for 2nds and credit lines to complete necessary work. Most lenders will not go into a subordinate position under any circumstance.
Solution: if you are planning on refinancing or you are coming out of a PPP on multi unit building AND you building is either on this list or could strongly benefit from structural improvements; you should be budgeting those costs into your refi.
This legislation is set to be introduced in the next two weeks and they want to have something passed by beginning of Spring.
2. airbnb letter to SF city officials: Many of you have voiced your frustration and anger regarding the illegal subleasing of your apartments by your tenants on short term internet rental sites such as airbnb. The board members of SFAA and CBH decided collectively to be proactive and take a public position on in our view is the violation of multiple city laws.
- such as violation of the apartment unit conversion ordinance
- violation of zoning laws commercial use in residentially zoned neighborhoods
- violation of rent control laws; tenant are subletting their units in excess of the amount currently paid to the landlord on per diem basis. They are pocketing the additional cash and most likely not declaring it on income tax which puts them in violation of the tax code as well…..that 4 total.
In the letter, we asked that the City take action to enforce existing laws that are being openly trespassed and treat tenants who violate the rent ordinance with the same vigor that violating land lords are treated. We submitted a 4 point action plan for the city to undertake.
3. condo conversion reform land use sub-committee Today:
- legislation introduced by Supes Scott Weiner and Mark Farrell.
- would allow for one time exemption from lottery for buildings that have previously participated in tiered step down cost basis. 1 year =$20K, 2 years $15K, 3 years $10K, 4 yrs $5K
- the net effects are positive in that this will compel sales inventory that results in revenue to the city through transfer taxes and new tax assessments on sales transactions.
- Plan C people are really excited for this as it would create more homeowners and clear out the lottery pool for the immediate future.
- I personally am in favor of the legislation as it from my perspective has only benefits to those individuals and to the community.
- The net effect here to some of you who own 2-6 unit buildings is that this may re- ignite market interest in TIC formation. This will drive up valuations for this property class as the factual time to condo convert will be reset to 2002 levels. Many of you may remember the premiums paid for 2-6 bwtn. the years of 2002-2007 when TIC formation in SF exploded with the advent of fractional financing allowing co tenants within the same building to have separate loans.
- In closing I think the variable here is how the vote will come out in D-10 Malia Cohen and D-4 which is currently Carmen Chu to be replaced by an as yet unknown mayor appointee.