A small group of San Franciscans gathered on the fourth floor of City Hall Wednesday morning to watch a spinning plastic container filled with lottery tickets. The chosen few walked away with apartments worth at least 20 percent more than they were a few hours earlier.
“If you are middle-class and live in San Francisco,” said Mission District resident Duncan Carling, 38, “There are two lotteries that determine what your life will be like. Those lotteries are the school lottery, and the condo lottery.” This was the condo lottery.
Every year, 200 of the city’s TIC (short for Tenancy in Common) units are transmuted by the city of San Francisco into condominiums. If you have a TIC, you almost certainly share a mortgage on the building your apartment is in with several other people – people who you probably never met before you performed the remarkably intimate act of buying a home together.
If one member of the TIC loses their job, is sued for malpractice, develops a drug habit, has a messy divorce, decides to sell all of their possessions and move to Tibet, etc., the entire mortgage has to be re-negotiated. The credit of everyone involved is affected.
Carling has never had any problems with the members of his TIC. He and his wife bought into theirs in 2006 because they had rented in the city for years, and wanted to raise their children (now actual, then hypothetical) in the Mission. As a research attorney for the city married to a product manager for a software company, a TIC was all the Carlings could afford.
“I regret the purchase sometimes,” he says. “As a condo, it’s worth more than what we paid for it. As a TIC, it’s probably worth less. But I wanted to grow up. I wanted to actually be able to change my apartment.”
The mood in the room is tense. This year there are a record number of applications – 2,100 apartments in all. The first 96 slots are granted automatically to those buildings that have been applying for condominium status for the past 7 years. Then a bundle of white tickets are dumped into a plastic lottery tumbler by Javier Rivera, assistant engineer for the Department of Public Works. They are liberally blasted with a can of disinfectant and set into motion.
What follows is an extremely long list of numbers, read in a monotone that would put most to sleep. Instead, the room is on edge. Already the hopefuls have been through the morning’s small protest by a group calling itself “Plan C” that seeks to increase the number of condominiums in the city. The group, accompanied by an ABC News camera crew, marched on the office of David Chiu, President of the Board of Supervisors, only to find that Chiu was not in (“Someone check the bathroom,” a man in the crowd muttered.)
Not everyone agrees with Plan C’s agenda. “If you can afford a TIC,” says Ted Gulickson, president of the San Francisco Tenants Union, “You are not the rank and file of San Francisco. You are an elite.”
The limits on condominiums, Gulickson says, were put in place because of rampant property speculation in the 1980s – people buying buildings, evicting the tenants, turning them into condos (a process which, in most cases, renders them not subject to rent control), and then immediately reselling them.
The current system is far from perfect, he says – he’d rather have an easier condo conversion process, with stronger protections from eviction for the two-thirds of San Francisco’s population that rents. Gulickson isn’t a fan of TICs either – and sees their increase over the last decade as an attempt by realtors to contravene the laws passed in the 80’s. (Carling himself was nearly evicted by a TIC years ago.)
“But we have,” Gulickson says, “the laws as they are passed.”
At the end of list of numbers, Carling is still a part owner of a TIC. He is unsurprised. “It was my first year. The odds were about 2 percent.” Every year, the odds will get slightly better.
Meanwhile, his oldest daughter is 2 ½, but his mind is already on the other great lottery hovering in the distance. “Some of the schools are quite good,” he says. “I hear you get to pick seven choices. But you may not get one of those seven. My kids may not even get to go to school in the Mission. It’s all very confusing. There’s a lot to learn.”