Last week was a full one in the legislative debate about fixing San Francisco’s housing crisis. Here at Mission Local HQ we could barely keep up with all the various proposals, amendments and votes. To help you sort through the administrative mess, here’s a (hopefully) useful guide to the latest in housing legislation:
What’s Happening in Sacto
Ellis Act Reform Bill
This state bill (SB1439) would attempt to reduce the number of Ellis Act evictions by requiring a landlord to own a building for five years before being able to evict tenants under the Ellis Act. If passed, the bill would only apply to San Francisco.
- Who’s behind it: California Senator Mark Leno, with support of Mayor Lee, a coalition of tech companies, and housing activists.
- What detractors say: The California Apartment Association says Leno’s bill impinges on the rights of small-time property owners who may lose money in those five years of renting out a property they intend to take off the market.
- What supporters say: The Ellis Act was meant to allow long-term owners to retire from the rental business. It was not meant to allow new owners to retire so soon—and by “retire,” we mean flip a rental property with existing tenants.
- Status: After getting just enough votes in the Senate, Leno took an amended version of the bill to the Assembly but failed to get enough votes there this week.
- Legislative Future: Leno could request a second vote to try to pass it again, but his office has not yet stated whether they will do so. So far, prospects look grim.
Mayor and Supervisors Battle over November Ballot
Last Tuesday was the deadline for the Board of Supervisors and Mayor to get local initiatives on the November ballot. So last week was packed with Supervisors hashing it out and the Mayor throwing in a last-minute measure to get his 7-point housing agenda into voters’ hands come November.
— David Campos (@DavidCamposSF) June 18, 2014
The “Flipper” Tax
This proposed ballot initiative aims to penalize speculators, or house-flippers. It would levy a hefty tax on building owners who sell an apartment building within five years of purchasing it. Applying only to smaller rent-controlled buildings, the tax is a graduated one, starting at 24 percent of the sale price if the building is sold within a year of buying it.
- Who’s behind it: Supervisor Eric Mar, with the support of Supervisors Jane Kim, David Campos, and John Avalos, the San Francisco Anti-Displacement Coalition, and the ghost of Harvey Milk who proposed a similar tax when he was a supervisor.
- What detractors say: Realtors argue that this tax could mean building owners would keep apartments off the market, which would ultimately drive up costs.
- What supporters say: This measure could be kryptonite to speculators who need to evict tenants from a building in order to sell that building at high price.
- Status: On the ballot for November. Full text here.
- Legislative Future: If voters approve it, it’s law.
30 Percent Affordable Housing Balance
This ballot initiative will require that all large, new housing projects (currently defined as more than 25 units) must consist of 30 percent below-market housing.
- Who’s behind it: Supervisor Jane Kim, supported by Avalos, Campos, Mar and Yee in conjunction with housing rights groups.
- What detractors say: Developers are saying that this proposal will add significant time and cost to the construction of new housing in San Francisco.
- What supporters say: That this will keep the construction of affordable housing at pace with market-rate units and better meet demand for low-income households. At present, below-market housing projects have been stalled by budget snafus in conjunction with developers opting to pay in-lieu fees.
- Status: Approved for the November ballot. Full text here.
- Legislative Future: Voters can make Kim’s housing balance a law in November. Kim has also introduced a companion ballot measure which can be amended until July, in response to critics of her legislation. The second measure will include provisions to raise more revenue to further subsidize the construction of affordable housing in market-rate developments.
Mayor Lee’s Affordable Housing Reviso
The most complicated of all.
The Mayor’s multifaceted measure would include a provision nullifying Supervisor Kim’s measure in parts of the city with existing land-use plans for more housing (which includes most of the eastern half of the city). So if both measures win, the Mayor’s would ban any measure (Kim’s in this case) that alters the requirements for new development.
Mayor Lee’s measure would also require the city to create a new citywide funding strategy for the construction of 30,000 new and rehabilitated units by 2020 and that 50 percent of those be priced for low and middle-income households.
Lee’s proposal would also get a vote mandate to allocate at least 33 percent of funds from the Housing Trust Fund to restore dilapidated public housing units. Right now some could argue that those funds are supposed to be used for affordable housing and this would cement the Mayor’s ability to use them to renovate and repair the city’s public housing.
Additionally, Lee’s plan would set up a study to find new revenue sources to finance low and middle-income housing, which could possibly include a fee for luxury developments.
- Who’s behind it: Mayor Ed Lee, with support from Supervisor London Breed and others.
- What supporters say: Adding more requirements to market rate developers will be bad for everyone by impeding the construction of more units. Furthermore, the city needs more money to both rehabilitate its public housing stock and construct more below-market units.
- What detractors say: Housing rights activists and nonprofit developers have criticized the bill, saying that it allows market-rate developers to build market-rate projects unchecked. Furthermore, they criticize Lee’s plan for being fuzzy on the details and imprecise about where funding to build affordable housing is actually coming from.
- Status: On the November ballot. Full text here.
- Legislative Future: November will tell.
Other recent legislation
In addition to the debates this week regarding ballot propositions, the Board of Supervisors have been passing all manner of measures related to housing of late. Notably, the Supervisors passed legislation introduced by Supervisor Campos requiring landlords using the Ellis Act eviction to match what evicted tenants would pay for two years of rent under current market rates. Also in April, the Board voted in favor of allowing owners of illegal in-law units to register those units with the city and make them legal, adding tens of thousands of units officially into the housing market.
Legislation surrounding Airbnb and other short-term rental services is also in the works, though it could either be decided by ballot or by the Board of Supervisors.
Supervisor David Chui introduced legislation in April that, if passed by the Board of Supervisors, would legalize short-term rentals but limit the number of days those units could be rented to only 90 days a year.
In conflict with this measure, a group of concerned citizens, which includes former Planning Commissioner Doug Engmann, submitted a ballot initiative that is much more stringent. The proposal, which is in the process of gathering the necessary signatures to get on the ballot, requires that short-term listings get approval from landlords, only be in commercially zoned parts of the city and that Airbnb verify that all listings have proper insurance and registration, among other things.
That’s about it for now—or, at least, all we could keep track of. As always, stay tuned for more.
Update: Reader Andrew pointed out in the comments below that Supervisor Avalos also introduced legislation early this month that would prohibit landlords from raising rent or, in some cases, evicting tenants, if they find out more tenants are living in a unit than previously agreed upon in the lease. Full legislation here.