A Mission landlord sued the San Francisco Planning Department last month over the city’s affordable housing program, which requires developers to rent or sell a percentage of units at below the market rate.
Last year the Planning Department found that Winfield Design International, a Mission company that owns a 54-unit building at 3000 23rd St., was not renting seven units at below market rate (BMR), as the city permits required when they were issued in 2003.
The city’s residential inclusionary affordable housing program is intended to help keep low-income and medium-income families in the city.
Winfield Design claims that the city cannot impose the notice of violation because the requirement is illegal under state law.
“[The Planning Department], without compensating petitioner, required a conditional use permit that denied petitioner its right to establish rental rates,” complaint documents state.
The city attorney’s office claims that Winfield Design is misinterpreting the law and asked the judge to dismiss the lawsuit, according to the city attorney’s response. Edward Suman, the attorney representing Winfield, did not respond to a request seeking comment.
In response to the lawsuit, Kristen Jensen of the city attorney’s office wrote, “Petitioner constructed its project and then reaped the benefits of these land use approvals without complying with the conditions of approval.”
Thomas Shuen, the CEO of Winfield Design, erected the building at the site of his former paper company in 2005 after a long and acrimonious permitting process.
When the Board of Supervisors approved the project, Winfield Design agreed to provide seven BMR units to satisfy the city’s 12 percent BRM requirement, according to the city attorney’s office. The Planning Department subsequently learned that rents for the units exceeded the required BMR. The building manager occupied one of the designated BMR units, and a BMR unit tenant had been evicted, according to the city attorney’s office.
The Planning Department issued a notice of violation on May 9, 2011, which carries a $250-a-day fine until the violation is abated.
Winfield claims that the city cannot impose a notice of violation because the conditions set by the affordable housing requirement are illegal under the Costa-Hawkins Rental Housing Act, a state law that allows landlords to establish the initial rental rate for a housing unit.
A recent ruling in Southern California known as the Palmer decision found that a Los Angeles affordable housing mandate violated that act. Winfield’s lawyer believes that the Palmer decision applies to this case.
But San Francisco’s city attorney has said that the city is not forcing developers to provide BMR units, as was the case in Los Angeles; rather, the developer chooses to develop the condominiums and agrees with the city to also include affordable housing units.
Moreover, the city attorney’s office argues that Winfield has already benefited from the program for nine years, and that claiming it was unaware of the Costa-Hawkins Act is not a legal defense.
To read more of the city attorney’s response, click here.