Welcome back to our first meeting of the year, I am returning for one more cameo year as your board president…a result of some shaking up at our board level. While we can all agree that 2013 was a great year in many ways for our industry; I would be preparing for some tapering of the great fortune in this the coming year.
The major difference is that rent controlled housing only becomes affordable to those people who become long term entrenched tenants many of which have the means for pay more or closer to market rates. This is a concept that is not perceptible to many on the tenant lobby side and that is no surprise.
Our sources at the City Attorney’s office informed us there are numerous pieces of legislation aimed at housing, development (pro and con).
There is much talk about amendments to the Ellis Act on the state level but this is really more political posturing than anything….the state legislature cannot and will not make “carve outs” for SF or specific cities and they are very highly unlikely to make any sweeping changes to the Ellis law despite the Demo super majority because of the strong moderate Democrat caucus that CAA has aligned itself over the years that is now really coming to fruition.
What will likely happen to resolve the perceived Ellis Crisis that is happening is that SF will enact much stiffer relocation fee schedule and do everything it can to dissuade any speculation of any kind. What they don’t understand is that for every underperforming 8 unit apartment building that is Ellis’d; that building now becomes a huge tax revenue for the city, in addition to ostensibly creating 8 new vacancies where those buyers were once renters.
At a recent meeting with the mayor someone in the audience made the astute observation that the success of the mayors’ pro tech business policies is what is partially to blame for the issues that we have now.
This is true to a certain degree, but the real answers are that the condo conversion legislation hijacking of last year and the city’s historical failure to enact an effective housing policy has led to this boiling point.
The good news is that as long as you plan to stay in the business of being an apartment building owner; you really won’t be affected so much by the all the dust up in the press. What is happening legislatively is for the most part aimed at owners’ rights to go out of the apt business or develop their existing properties.
The big story lines this year will be:
Maybe the biggest problem we have is the lack of factual reporting in the press.
Politicians are given a platform to spew off whatever they want and no one in the press ever calls anyone out on real facts which is really indicative of the sad state of investigative reporting everywhere. If it bleeds, it leads and just the way it goes. Supervisor Mar was quoted in the sfgate.com the other day about the 1000s of displaced tenants from the Ellis Act. This is just factually untrue. The Rent Board keeps records of all Ellis filings and last year there were a total of 276 doors affected, 60 of which occurred in December the busiest month of the year for Ellis filings.